Today’s executives benefit from an unprecedented level of data availability, thanks to the explosion of Big Data and the rise of affordable tools and technologies that make data collection seamless. Companies that make the best use of available data can take advantage of valuable insights that inform decision-making. When used to its fullest advantage, customer intelligence can reveal opportunities to set your business apart from the competition.
But data collection alone isn’t enough to drive business decision-making, thus data alone doesn’t necessarily level the playing field. Ultimately, outcomes depend on how well a company utilizes its data.
To dig a little deeper into the possibilities that exist for leveraging competitive intelligence to gain a competitive edge, we asked a panel of data analysts and customer intelligence pros to answer this question:
“What’s the #1 way companies can leverage customer intelligence to gain a competitive advantage in their market space?”
Find out what our experts had to say below.
Thomas Ngo is the sales manager for Innovative Comfort Systems, which provides HVAC, Mechanical, and Refrigeration services.
“To leverage customer intelligence to gain a competitive advantage…”
I find it fun to work with customers that know what they want and are willing to go back and forth on performance and engineering data. This is one aspect of my job that I spent many years to finally get comfortable with. To command the confidence of these types of buyers, you not only must know your stuff (data, statistic, amperage, decibels, clearance, code…), but you really must know how to satisfy the customer’s demand by answering the real question they’re seeking disguised by the overly-technical/complicated question. This is psychology, not science.
Chris Byrne works with Sensorpro.net, a company that works with leading brands on marketing automation.
“We think companies can leverage intelligence by…”
Listening and then acting quickly:
1 – Implementing Net Promoter Score (NPS) in the business. With NPS you can react right away to customer feedback and ensure the message is appropriate to the feedback. When messaging customers, you can avoid the schoolboy mistake of sending the wrong message to detractors, for example. Companies like Enterprise RAC actively use promoters in their marketing referral programs and they credit NPS with the success of that. Being able to deal with detractors right away is a proven method to improve customer loyalty.
2 – In a recent case of our own, in a progress review of their account, our customer let us know that a number of competitors had reached out looking to displace us. They were prepared to reveal the specific pitch the competitor was making to them. We then developed the function in question, which now gives us an edge over the competition.
Bret Bonnet is president and co-founder of Chicagoland-based Quality Logo Products, a privately held, online promotional products retailer selling more than 26,000 items that can be imprinted with logos and customized messaging.
“Being that our business is entirely web based, our best customer intelligence tool, besides Google Analytics of course, is…”
A customer monitoring solution by Inspectlet (no affiliation). It’s basically a DVR for your website traffic. You can view recordings of how users interact with your website in near real time. You can survey customers all you want, but the best way to REALLY understand your customers is to watch them in action. What people say vs. what they do are often two completely different things. Thanks to this invaluable resource, we’re in the process of retooling our entire customer experience – resulting in the development of several new patented technologies.
Vitaliy Verbenko works in Business Development at Helprace, a cloud-based customer service application for companies looking to build a connection with their customers. With Helprace, companies can start off with basic support, populating their self-service portal and customer community as their brand evolves.
“One way to capitalize on customer intelligence is…”
To have site visitors engaging directly on your website instead of using alternate channels (social media or review sites, for example). It not only gives you ample data to work with, but it also gives your customer base a platform to participate in conversations. If they have questions, they will ask them. If they have gripes about your business, you can address them there, too. There are many benefits to this including greater visibility by Google and understanding what customers really want out of your organization.
Speaker, author, and market researcher Pamela N. Danziger is internationally recognized for her expertise on the world’s most influential consumers: the American Affluent. Her new book , Shops that POP! 7 Steps to Extraordinary Retail Success, reveals the secrets to crafting a retail shopping experience that’s irresistible to high-value shoppers. As founder of Unity Marketing in 1992, Pam leads with research to provide brands with actionable insights into the minds of their most profitable customers.
“Marketing starts with understanding the consumer and that requires three distinct perspectives on the customers you aim to target…”
1) Who has the MEANS to buy or demographics – Understanding the demographics of your target market is the first step to understanding the consumer. Demographics gives us the facts and figures that allow marketers to zero in on their best prospects. Age, gender and increasingly income demographics help us zoom in of who is most important for our success and gives us a roadmap to target them precisely.
2) Who has the OPPORTUNITY to buy – Understanding the buyers opportunity to buy involves studying their past purchase behavior and leveraging those insights to provide a path to purchase that will produce results. Past purchase behavior is often the best predictor of future purchase behavior so studying your customers behavior, along with those target consumers who may not be part of your established customer base is key.
3) Who has the MOTIVE to buy – This is the psychographics or psychology of your customers and target customers. It helps you understand why people buy so that you can make sure all marketing communications messages make clear through positioning that your offering meets their specific needs.
Consumer intelligence is critical for marketing success, but then it must be used to guide the entire marketing effort. Too often, research findings about the customer and their needs may be overlooked, even ignored, if it doesn’t conform to the preconceived notions of the marketers or the direction they want to take. Marketing success must start with understanding the consumer, then from that perspective lead with strategies and tactics that your research due diligence directs.
As Founder and CEO of The Kini Group, Dev Tandon leads development of KiniMetrix, a cloud-based business analytics SaaS helping companies better identify drivers of margin variation and find sustainable margin improvement opportunities. Customers can identify critical issues and opportunities related to sales performance, price/volume/mix, customer churn, price realization, and more.
“20% of customers cost more to serve than the revenue they generate. Customer intelligence helps companies quickly determine…”
Which of their customer accounts are unprofitable and helps them determine why. These companies can then use these actionable insights to improve pricing and sales strategies and put struggling accounts back on a path to
Mandy Yoh is the Head of Communications for ReviewTrackers, software that elevates the voice of the customer and enables brands to innovate based on customer feedback. The platform tracks reviews from 80+ review sites, helping busy professionals save time and focus on what matters most: their customers. The easy-to-use dashboard helps brands manage their online reviews, uncover hidden customer insights and improve brand reputation.
“Did you know that 90% of consumers seek out information from online reviews before making a purchase decision? Of those, 88% trust reviews just as much as…”
Personal recommendations from family and friends.
Online reviews are the means by which consumers are talking/engaging and deciding whether or not to interact with brands. These reviews hold a plethora of rich customer data that is not readily available by any other means.
Review data holds star ratings as well as sentiment which is the key to finding out what your customers really need/want and ways to anticipate those needs/wants in a predictive way for the future.
Pauline Tran is the founder of UKYS, an innovative approach to the world of custom suits for professionals. The company’s tailors have more than 15 years of experience as outsource tailors for bespoke craftsmen in United Kingdom.
“Customers always love to talk to owners about their thoughts. In addition, they are also keen on knowing more about you besides business…”
As a founder, I experienced listening to my customers many times and discussing my thoughts with them in business. The more customer-friendships are established, the more solutions (in various types) they give you to enhance your competitive edge in their view because they know them best. My recent UKYS App was born thanks to this. As an online tailoring business, the hassle for customers to get measured is my obstacle in business growth. Many of my customers are Japanese expatriates, and they told me how mobile technology is growing in their country and worldwide. Hence, based on the old practice of getting three photos during the measuring process, I developed built-in measuring technology in the app to help them get measured via photos taken from their phone’s camera to shorten this step. It works, and my customers love it.
Dean Wang is the Data Intelligence Manager at Influitive, a technology company that helps B2B companies including Intuit, Box, and Salesforce mobilize their community of customer advocates for more rapid and profitable revenue growth. He is an economics graduate of Princeton University.
“Better intelligence about customers can be used to…”
Build better engagement with them, making customers more receptive to renewals, up-sells, and cross-sells. Better customer intelligence also removes much of the uncertainty from a company’s relationships with its customers. The company will then know which customers will respond to requests for support; this can include marketing support, improving social proof during the selling process to other potential clients.
Intelligence about customers can also help with building a community around a product; the company will better know which product users to connect. Customer intelligence about what needs/problems exist among the customer base can help to further improve a company’s product above that of its peers.
Thom Fox serves as a Solutionist to business and nonprofit entities eager to sustain, or scale, operations. He is also Host of The Engine airing on NewsRadio 560 WHYN.
“In building a startup or exploring additional revenue streams within an existing business, it’s critically important to understand the motivating factors compelling your customer to act…”
You gain these insights by forming hypothesis, and then validating (or invalidating) your assumptions. Throughout this process you gain a better command of what your customers want, what they don’t, and what they’re willing to pay for. You gain this information by posing open-ended question to your customers, and then listening to their answers. The true key is peeling back the layers by taking one additional step – questioning customers why they answered the way they did. This adds a stronger dynamic than surveys. The magic happens in the follow-up questions. Understanding why someone feels a certain way is far more powerful than understanding they feel that way at all. You get to crawl around inside their logic and ask additional probing questions. This information yields applicable tactics (be it branding or sales) to drive results and the efficiencies to improve profitability. Employing Customer Intelligence activities into your development processes isn’t just good business, it’s the one proven method yielding strong competitive advantages.
Jay is the Founder and CEO/ President of RAPID, started in 2001. RAPID developed from Jay’s prior career of selling and delivering prototypes to Mechanical Engineers and Product Developers throughout New England. Jay holds a Mechanical Engineering degree from Rensselaer Polytechnic Institute.
“Customers are the reason you provide a product or service and businesses with customer intelligence have three advantages in the marketplace…”
The first advantage is you fully understand their goals, timeline, and processes. This allows you to know when to market, how to reach a specific vertical, and best communication methods. The second advantage is a company’s ability to better understand market segments and penetrate them deeper. Being in tune with customers from a variety of verticals are able to notice trends with customers. The customer intelligence on these industries can help businesses further expand their reach and build new customer relations in these verticals. The final, and one of the most important, is the ability to build lasting relations that help grow your business. By building these strong relationships businesses are able to understand new products to offer and have reliable customers for feedback.
“The number one way companies can leverage customer intelligence to gain a competitive advantage in their market space is to…”
Ensure that their customer data isn’t stuck in data silos. A lot of companies have one platform for sales, another for marketing and another or customer success. The problem with this is that the sales, marketing, and customer success teams don’t have one single view of the customer. Instead, customers have to start from zero as they move through the funnel.
What companies need to be investigating and investing in, is integrating these platforms so that a single transparent data tunnel is created. This means each team can see what the other team has been doing with the customer; for example, sales can see what promotions marketing has been sending,and customer service can see what sales have been saying to a customer. This is important because customer service is the new marketing. A ZenDesk survey found that 42% of the people surveyed said that their definition of bad customer service is having to speak to multiple agents and starting over every time. It even trumps rude representatives, which only got 13% of the vote!
Aras Koktas is the Chief Technology Officer at Yandy.
“Most companies aim for utmost customer satisfaction as their priority goal in business. Customer intelligence is…”
One of the most effective ways to reach this goal. If you can translate what your customers are looking for, where are they from, from what sources and mediums they got referred to you, if they are having problems on your web site, what their perceptions for your brand are, with the help of technology. You can massively scale this information from what would be a single old school face-to-face customer relationship to understanding patterns of thousands of customers. This means sending the right marketing promotion, lending a hand for help at the right time, increasing personalization, and delivering consistent messaging across all your channels.
We try to reach this in e-commerce by segmenting every visitor into groups depending on what pages they visited, duration, entry and exit, frequency of visits and dozens of more metrics. It is a 3-step process. Collect, analyze and fix. Big data is a buzz word and most of us just stop at step one. Data is only effective proportional to your ability to chunk it up to smaller pieces to see patterns and make customized solutions to improve your metrics. Customer intelligence is just one part of it.
Beth Carter is the Chief Strategist at Clariant Creative Agency, an inbound marketing firm that specializes in creating content that customers can’t live without.
“Customer intelligence lets businesses make smarter decisions about their marketing priorities…”
For example, we’re working with a small business that is constantly hounded by local publications to run advertisements. Because we have great customer intelligence, we know which publications will be a good fit. We know that buyer persona X might read one type of publication, while buyer persona Y might actually prefer social media. We can even take that a step further and create a print ad with messaging that specifically targets buyer persona X and a social media ad that specifically targets buyer persona Y. Meanwhile, the competition is simply using a spray and pray approach that is burning through their budget without generating much in return.
Jim Abbott is the Sales & Marketing Manager at Ashton Technology Solutions.
“My initial foray into competitive intelligence was from a pricing perspective. In many ways, our industry offers a commodity, and buyers don’t understand…”
Why one company may charge more for their services. While my initial goal was to understand my competition’s pricing and service offering, I came away from the exercise with a much more important piece of information – positioning and branding. I realized that in a very crowded marketplace (there are well over 50 competitors in the Greater Cleveland market), everybody is selling/saying the same things. The question then is, how do we differentiate ourselves from the rest of the market? They offer (at least, on the surface) the same things we do, and they say (from a branding perspective) the same things we do.
This competitive intelligence allowed me to understand the need to reposition ourselves, while focusing more on the ‘why’ and the ‘how’, than on the ‘what’.
Jeffrey Yefsky, CEO for 5x Technology & an award winning leader in BI and Data Services industry, is also a decorated Lt. Commander in the US Navy.
“The number one way companies can leverage customer intelligence to gain a competitive advantage in their market space is by…”
First ensuring that they are implementing a business intelligence type of software that focuses on generating and consolidating customer data, and then using that company-generated customer data to make decisions based on accurately reported results.
To address your summary question regarding the competitive advantage of customer intelligence, my answer is this: Customer intelligence tells you everything about your customer, that includes their behaviors, tendencies, buying habits and risks. It is the most accurate view of a company’s health.
Without customer intelligence, organizations are left with huge holes in understanding current and targeted customers, which could result in an organizational decision that could be detrimental to the organization pursuing a relationship with its customer(s). Which leads back to my response to the way a company can leverage customer intelligence to gain competitive advantage in their market space.
Jarratt is the CTO at HelpDocs. When he’s not working on product, he’s out flying his drone or watching the F1.
“The competitive advantage of customer intelligence is…”
Making interactions with each and every customer personal.
Customers appreciate if the person they’re contacting understands their business and what it involves, and having the information handy makes it easy to do just that.
The customer may need a tailored response or help. Having that extra insight into where they work, what the business does, and how to best serve them can make a massive difference and can win you a customer over a competitor. It can make your customer service worth remembering.
Scott Eisenberg is the Founder and CEO of Swap The Biz. He originally got involved in hosting events when he was in law school in 1996 as a nightlife promoter in NYC and the Hamptons. He had gone to a lot of events but he always thought he could do better….and so he did. Since then he has hosted hundreds of successful events over the years.
“The #1 way companies can leverage customer intelligence to gain a competitive advantage in their market space is…”
That they can personalize their outreach to each client. When you know things about someone you can market to them from an angle that they will be receptive to and more importantly you can avoid marketing to people that wouldn’t be a great fit for your product or service and thus save you precious time wasted on continually following up with people that were never going to buy from you to begin with. Personalized outreach will make the customer feel more connected to your brand and is an easy way to break down barriers which will effectively get them to drop their guard as you are talking to them about things that they care about and that make sense to them.
Edward Sturm is an SEO, content marketer, and digital video and image producer. His creations have earned him tens of millions of views and have gotten him on television shows such as 20/20, Good Morning America, and The Today Show as well as in publications such as The Huffington Post, Forbes, and The Daily Mail.
“One of the most powerful things a company can do to leverage customer intelligence is…”
Implementing SEO outreach practices. One of the cornerstones of SEO is learning who is linking to competitors. By doing this a company can find out exactly who is writing about, and more importantly, linking to similar products, services, or pieces of content. Most of these links will be coming from potential customers and influencers interested in your specific niche. This informed way of outreach is massively effective for doing both SEO and obtaining press with people who will send extremely qualified traffic. Use Moz, SEMrush, or Ahrefs for something like this and you’ll see a great return.
Seena Sharp is a pioneer in competitive intelligence, establishing the first firm in the U.S., Sharp Market Intelligence, in 1979. John Wiley publishers commissioned her to write Competitive Intelligence Advantage, which has received more 5-star reviews than any other CI book. They’ve investigated more than 200 industries for Fortune 500 and small firms.
“The best way for companies to continue to satisfy existing customers and attract new ones is to…”
Pay attention. Pay attention to what customers and prospects say, don’t say, imply, and their throw-away comments. That’s customer intelligence.
Far too many companies believe they know their customers’ wants and needs better than do the customers. Really? That’s arrogance. And it usually manifests itself by the company offering what the company wants, which the customer may be view as outdated or insufficient.
Customer intelligence educates the company. It can confirm that the company is on target. But it’s more likely to reveal what the customer wants changed, and/or if there are things that the customer isn’t getting. That’s openness. It identifies gaps which is a synonym for opportunity.
Most companies seek customer feedback with market research (surveys, focus groups, questionnaires.) Far better results are delivered from customer intelligence (a subset of market/competitive intelligence) which more accurately captures the voice of the customer. This is particularly true when the research is conducted via conversations and open-ended discussions that encourage discovery and nuances.
In short – ASK. Talk to your customer; listen to your customer; probe your customer. You’ll not only find out what they’re thinking, but an interested company produces a loyal customer. There’s nothing more flattering than a seller who’s interested in the buyer. The customer wants you to succeed because they’re already buying your offering, they want to continue buying it, and they want to continue their relationship with your company.
Yes, this all takes time. But it’s far less time and effort than getting a new customer. Further, a satisfied and loyal customer will share their experience with others, encouraging them to become buyers.
This applies to B2B as well as B2C. Customers want what they want and appreciate companies who want to satisfy them.
Still not convinced? How often has a competitor offered a new feature or new offering that increases their revenues; yet, your company never even thought about it? How often have you, as a customer, been frustrated when a product or service isn’t quite what you need, but the company doesn’t listen?
It’s easier and less risky to grow a company by making improvements rather than innovations. Happy customers are a direct line to those improvements and increased revenues.
Nicholas J. Webb is the author of What Customers Crave – How to Invent Relevant and Exceptional Experiences at Each Touch Point. he also serves as a senior partner at Cravve a management consulting firm that works with top brands to help them meet their market through customer experience design.
“The number one way to leverage insights to gain a competitive advantage is…”
There is a great deal of enthusiasm about leveraging social analytics and a wide range of new analytical tools to learn more about a customer and the customer’s journey. The problem is the overwhelming majority of organizations rarely leverage the power of these insights to create experience innovations across the customer journey throughout a range of customer types.
The best way to leverage customer insights is to quickly turn those insights into products, technologies and human experiences by combining insights with innovation best practice. The best organizations are gaining insights that are specific to a customer’s touch point and then they are turning those insights into a thoughtful human experience at a specific touch point.
For example, the hospitality industry is widely using social and data analytics to gain insights about the passion of travelers so they can leverage those insights to completely re-examine each touch point of their guest experience. Those insights have created new innovations such as digital check ends that allows guests to skip long lines in order to go right to the room after a busy day of traveling. There is no question that the best way to lead your market is to gain the best insights specific to a range of customer types and customer journey touch points so you can leverage those insights to reinvent human experiences.
Daisy Jing, 27 years old, founded and bootstrapped a now multi-million beauty product line called Banish. Five years ago, she started her business from just her laptop! She had bad acne and tried everything to help clear it up. She tried hundreds of different beauty products and decided to review beauty products to help others suffering with the same problem. In turn, she developed a following of over 50M views in YouTube and became a trusted source of information in the realm of skin problems. During that time, she launched her natural skin care line focused on combating skin blemishes. Now, the company is a team of 14+ women, inspiring confidence in others.
“The best way companies can leverage customer intelligence to gain a competitive advantage in their market space is by…”
Listening well. It is just easy to say that we hear our customers, but listening well is different because we didn’t just hear, we listened, and we’ll do something about what you said. Whenever they ask for help (anytime, anywhere), we do our best to immediately assist them. We share that same values to our influencers and always remind them to answer customers’ queries. Through my YouTube channel, I find ways to see what they want to learn more about and discuss it on my videos. With a team full of women, our listening skills are advanced.
Bryan Clayton is the CEO of GreenPal, which is best described as Uber for Lawn Care.
“Our platform is one continuous experiment to find out the answer to one question…”
What is it that makes our customer say yes? We get closer and closer to finding out the answer to this question every day because we talk to over 100 customers of ours per day in our live chat. This allows us to close the gap between company logic and customer logic.
The closer we get to customer logic, the more we are able to match the internal thought sequences that are going on inside of their head when they are signing up for our product. We use this intelligence on our emails , landing pages, and inside of our app to communicate seamlessly with what our customers needs are. Since we implemented this strategy a year ago we are seeing compounding lifts at every step through our conversion path.
Haley Gong discovered her passion for digital marketing and online communication when she studied at the Johns Hopkins University in U.S. Now, Haley together with her team at Webpower Asia in Shanghai, strive to provide marketing automation solution to international companies wishing to reach and engage their audiences in China.
“The best thing about customer intelligence is…”
Data mining. This is like a relationship. The customer is the girl everyone is chasing after, including you and your competitors. A smart strategy is to know as much as possible about this girl, so as to offer her exactly what she wants. Customer intelligence makes it possible. Say you are an online fashion retailer, by tracking and analyzing the customer’s previous online behavior, you are able to find out that: she loves blue heels; her size is 37; her favorite brand is XYZ; she normally shops online or read promotion letter at 8 pm; and she always pays with her Mastercard.
With all this information, you are able to personalize your message: ‘Hey! Check out the new blue collection from XYZ. They are so popular that we are running out of size 37 in stock. Buy now and enjoy 5% off if you pay with Mastercard.’ This customer will wow at this message and immediately feel the bond. Repeat it for several times, and this girl will fall in love with you, instead of you competitors.
Branislav Kohl is co-founder and CEO of DataConcept, a Slovak-based agency that uses marketing data analytics to build digital marketing campaigns with the focus on efficiency and customer experience.
“Rather than chasing untrusted, general data from various sources form outside, companies should…”
Start to get insights about their customers from inside. The most valuable insights come from your own website. If you can track the digital journey of your existing customers and prospects and understand their digital behavior, then you are able to segment it by needs or buying stage in their lifecycle. Another option is to analyze the unstructured data you have about your customers and understand the pattern. After that, you are able to combine both sources and get insight into their history and present, and thus predict the future – and that’s your competitive advantage: you can adjust your business to tomorrow’s market demand.
Swapnil Bhagwat is creative design and digital marketing professional with over 10+ years global experience. A Senior Manager – Design & Digital Media at Amvensys Capital Group, LLC (ACG), Bhagwat leads the design, development, digital marketing, and content writing teams.
“Customer Intelligence can be leveraged by companies by…”
Linking customer behavior in measuring different metrics of business and corporate performance. If data is available, a retail company can measure profits and sales from different angles like product line, store, demographic, season, and other customer segments. Customer intelligence data can measure the effectiveness of marketing and advertising efforts from click-throughs, impressions, customer sentiments on social media, etc.
This helps companies target their marketing budgets. Customer attrition analysis or churn can be analyzed more accurately, which can effectively save on the cost of customer acquisition. It can improve all the touch points of the customers with the company. Customer intelligence from each touch point can be integrated into business intelligence, helping the organization to become more customer-centric. It lowers costs and optimizes services, improving productivity. Most importantly, each individual customer can be served better as per their preferences which definitely adds value in gaining competitive advantage.
Michael Mehlberg, co-founder of Modern da Vinci, helps small businesses owners achieve their goals and live their passion. His approach to technology, business strategy, product development, marketing, and sales is both practical and highly effective, and has helped multiple small businesses grow into the company their owners envisioned.
“Customer intelligence can provide deep insights into the type of person to whom you are selling…”
Personal demographics, location, problems, needs, sensitivities, etc. These insights help you understand what products and services your business should offer. More importantly, however, customer intelligence gives you ideas on how to build a mutually beneficial relationship with your buyers… and all good relationships start with communication. Using the intelligence you’ve gathered, start a dialogue with you customers. Discuss their problems. Use their language. This will not only show that you understand their needs; it will help form a connection with them to eventually offer solutions for which they are willing to pay.
Dr. Sy Islam is an Assistant Professor of Industrial Organizational Psychology from Farmingdale State College and a Principal Consultant with Talent Metrics, LLC, a human capital consulting firm that does business intelligence work.
“There are two things that are important to note in leveraging customer intelligence…”
First, is that companies have to collect data from customer interactions. Whether that’s a web-based (i.e., how long do customers spend when they open promotional emails) or even in collecting paper survey data. Once you have a data collection strategy in place make sure that your organization has the capability in place to analyze that data. There are many organizations that still make decisions based on assumptions of what they think happens in their organizations. Be ready to analyze the data and use predictive analytics or trend analysis to identify how you interact with your customers and what the true drivers of your business are.
Matthew Turner, CMO for epaCUBE, has worked in distribution and supply-chain technology for almost 20 years with companies including NxTrend, Infor, Mercury Payments, Accellos and as a partner of Microsoft, NetSuite, Sage, SAP and more. As epaCUBE’s chief marketing officer, he writes and speaks on many topics in distribution and profit optimization.
“If you’re not comparing the right customers to each other, the data can lead to…”
Incorrect conclusions. For example, you may think you are comparing a set of small customers together, but one of them might be a very large customer but is only putting in small orders with you. If you have them grouped incorrectly, you may be missing out on the fact that behaviorally they are placing large orders with other companies, just not with you.
That’s why segmentation is so critical in analyzing customer data.
There are a surprising number of companies that don’t have a segmentation strategy to start with. They use their sales peoples’ best hunches. I’ve seen the inside of the customer data of hundreds of companies and at best most of them rely on very simple segmentation. But segmentation is really the key to unlocking profit and growth in your customer and prospect pools. Segmentation allows you to price your products better, meet market demand, fine tune your interactions with different groups and analyze place you might be losing profit. For example, there might be a new market trend that you didn’t recognize because in a certain geographical territory you have an inexperienced sales rep. But by comparing the right sets of data in all of your geographies with like customers and like products, you are comparing apples to apples and you can uncover all kinds of new opportunities. There are subtle customer issues that disappear in the waves of data in your company, but they come to the surface quickly if you now what the right data sets are, the right customer and product groupings.
In analyzing the business of hundreds of distribution companies, we’ve found that most rely on very simple segmentation. Some companies even operate without any segmentation, flying blind hoping to come out at a reasonable price based solely on their own instincts and their ability to muscle the purchasing agents at client companies. This rarely leads to satisfactory profit margins. Properly implemented segmentation strategies affect more than how you price products to your customers, it also influences how you interact with them on a broader scale.
With properly established segments, you can collect far more valuable data on how you interact with client companies, where you might be losing profit, and where you stand to gain. For example, with a reliable data set based on tighter customer segmentation, you might spot a place where sales agents are under-performing. Maybe you have a new sales rep in a strategic account who is pitted against a master negotiator in the client’s purchasing department. Maybe you have a market trend that needs addressed in a particular territory but were unaware of it because you were not comparing apples to apples in your current segments. Subtle issues that would otherwise disappear into the noise can rise to the surface very quickly when you compare the right set of data in the right customer and product groupings.
NGDATA helps data-rich companies in financial services, media/publishing and telecom to drive connected experiences. Our next generation customer data platform, Lily Enterprise™, puts people at the center of every business via Lily’s Customer DNA, which continuously learns from behavior to deliver compelling experiences.Learn More...