Part 2: The Key to Business Growth and Profitability: Leveraging Data and Analytics
Customers are the core of any business and to exceed customer expectations companies must utilize tools that allow management teams to make data-driven, insight-based decisions that improve the customer experience. Understanding how to leverage internal and external data sources is a key component of a successful customer-focused data strategy that drives business growth and profitability.
The Power of Sentiment and Geo-Targeting
Third party data, including demographics, social media and geo-location can help “connect the dots” about a customer and generate new insights. A combination of demographic and sales location data provide information on what demographic profiles your sales and marketing strategy should be targeting.
should be a critical element of your customer engagement channel. Importantly, social media now provides unsolicited consumer feedback and product sentiment insights at extremely low costs and can replace many traditional consumer surveys that were performed on small samples of consumers that often took months to complete.
Geo-tagging data is another rich data source for better understanding customers and positioning product offerings to win their loyalty. With 77 percent of Americans now owning a smart phone, likely with built-in GPS capabilities, companies can assess the location of consumers every minute of the day, leading to highly impactful location and time-based marketing strategies.
This wealth of data across multiple sources creates the potential to leverage real time, closed loop insights for actionable sales and marketing strategies. Companies such as China’s Tencent are leading the way. The “ecosystem of connected businesses enables Tencent to learn more completely about consumer beliefs, behavior and preferences, enabling them to connect consumer behavior across channels.” Tencent is able to “label individual behavior with over 5,000 discreet tags..[and]..these tags then enable a more detailed understanding of a consumer’s entire life. Unlike survey-based data which is based on what consumers say, this first-party data enables companies to understand actual behavior.”
Studies have shown that “customers who had the best past experiences spend 140 percent more compared to those who had the poorest experience.” Given the necessary omni-channel sales strategy today, providing a cohesive and personalized customer experience is a key driver for customer retention and growth.
Gaining a Holistic View of Your Customer
Leading companies make data and analytics a key competitive advantage. Research shows that “Consumer products and retail marketing leaders understand the value of integrating systems and data from across the organization to create a single view of the customer. Sixty-two percent of high
performers agree they’ve integrated systems to create a single view of the customer compared to only 1 percent of underperformers.”
Many companies utilize advanced data analytics techniques such as data science and machine learning algorithms due to the large volumes and complex varieties of data which make up “big data” sets. Machine learning algorithms such as customer clustering algorithms and natural language processing enables companies to efficiently parse through and contextualize seemingly disparate data sets by analyzing correlations and key sales drivers. A comprehensive strategy to capture, analyze and execute on customer behavioral data will put your company on the path to profitable growth.
The importance of data in understanding customers, operating the company effectively and driving sales and profitability is undeniable. Yet, many companies are still struggling to implement a robust data strategy and realize the value of their own data. Some companies recognize the need for
more advanced data analytics, but do not have the resources or management buy-in to implement the necessary data strategy and analytics. Knowing, understanding and leveraging the behavior of your customers is core to driving growth and profitability of businesses and data is at the core of understanding your customers. To compete in the modern age of digitalization, companies must leverage data effectively to make decisions based on operational insights. More insights mean better decisions.