This is how data can help you to better understand your clients
What customer-centricity approach is and how customer analytics can help
In this week’s article, we are going to talk about a slightly different topic than what we have been dealing with in the previous weeks. We will stop talking about “data in the cloud” for now to talk about how data can help us to better understand our customers.
You will agree with me on the fact that, regardless of the sector in which you work, customers are essential, since they are the ones who finally buy products or services and allow business to be profitable and grow healthy. However, although we are aware of the importance of the client, you don’t often have them in mind when you propose your competitive strategies in the market. If you want to create a sustainable business over time and create value for your customers, they must be at the center of your strategies and, going further, at the center of your business.
With the arrival of information technology, everything in business has changed dramatically. The amount and variety of data you can count on today to support your decisions are immense. Years ago, you just needed to survey a sample of your customers. Today, you need to know not only the preferences of your customers, but also their behavior or their purchase intentions, and those are just two examples of the level of detail you can reach.
If you look at the list of the largest companies in the world, you will not only see technology companies, but you will also see a large number of companies that, despite not having a technological base, have been able to adapt, better understand their customers and increase the offered value by improving the quality of their products and services. Just have a look to “The just 100” of Forbes for the year 2021.
Relationship vs Transaction. What is the customer-centricity approach?
Customer-centricity is about putting the customers in the center of your business. Customer-centricity is not new, it’s a way to understand a more and more exigent demand and many firms are realising it.
When talking about relationships or transactions, no strategy is better than other, they are simply different ways of understanding a company, a market, or the demand. Unlike product-focused strategies, at customer-centricity, we seek to satisfy the needs of our demand, not only from the sales point of view but from the relationship established with our customers. In a customer-centric approach, a metric like the CLV (Customer Lifetime Value) has more value, which allows you to measure the time of the relationship between a customer and a firm. Because customer-centricity is about that, relationships instead of transactions.
The sales process is also different. In a product-focused strategy, we have a mindset of how many customers I can sell a product to, in some way, we look for quantity over quality. However, in a customer-centric approach, the customer himself has much more value, and we seek to maximize the number of products that we can sell to the same customer to meet their needs.
In the customer-centric strategy, the individuality of the customer stands out, that is, not all customers are the same. There are more loyal or less loyal customers, more profitable or less profitable customers, customers who buy more frequently, or customers who buy less frequently. Each customer is different and provides unique value to your company. This value may vary throughout the customer’s relationship with your company. For this reason, you must develop a set of criteria that allow you to assess and characterise the different types of clients.
Data comes into the scene
At this point, we have talked about the customer-centric strategy and how each client is different and has a unique value for your company. Now, how can we calculate it? As we mentioned, more and more companies are focusing on getting to know their customers better through data. Most of the companies on Forbes’ “The Just 100” list, even excluding strictly technology companies, are precisely the ones with the best customer knowledge.
The way you capture the data, exploit it and extract value that allows you to know your customers better is what is called Customer Analytics. Customer Analytics will allow you to get to know your customers better and improve your customer acquisition strategies, loyalty, sales channels, identify areas for improvement and, in general, take your business to the next level.
But what does it mean to know a customer? In summary, you can categorize the data you have about your customers by answering these two questions:
- How does a customer interact with the channels I have?
- How does a client interact with the products and/or services that I offer?
Answering these two questions implies knowing the customer. How does a customer behave when they enter your store? What sections of your website are visited the most? Do customers open the marketing emails you send? Do you like the offers you receive? What products do they buy the most? Which less? Why? Is the post-sale service good? How do they react to your shop window display? How do you feel when you enter a store?
Having this knowledge, you will be able to offer a greater value to your clients and, consequently, improve your company’s relationship with the client, which will undoubtedly bring a greater return and, consequently, a higher profit.
Finally, I would like to mention that even though we live in the digital age and many channels are now digital, Customer Analytics is not limited to just them. When you can have a 360-degree view including the entire customer’s shopping experience, from when they enter your store for the first time, until they receive a post-sale service, that is when you can obtain the highest benefit.
Physical channels are still there and will always continue because we are real people living in the real world. Digital channels must interact with the real world and the circle must be closed. Being able to make measurements at the points of sale about human behavior, their reactions, their feelings, is also very important. So don’t forget the physical channels, as they are and will continue to be important in the future.
Data is more present than ever in our lives and, specifically, also in the business world. Your business must have a good data culture that implies being able to know what we want to measure, measure it, process it, and extract value from it, all of this in a governed and organized way. If your company is customer-centric, Customer Analytics can help you understand each of the actions carried out by your customers, both in the digital and physical channels.
Thanks to Customer Analytics you will be able to take your company to the next level: improve the relationship with your customers, provide greater value, test new strategies more efficiently, understand what does not work in your product or service, what perception customers have of you, or what things you should change.
Thanks for reading! 🤗
