An interesting trend has emerged lately in my conversations with clients and prospects. The conversations begin and end with data.
We talk about questions such as:
- What is data?
- What data is meaningful?
- Why is there so much data?
- How do I make sense of all the data in my company?
- What is the difference between big data and data?
- How do I use all this data to make a difference in my business?
All of these questions are key to unlocking the future success of these companies. One of the phenomenon causing these questions is the increased use of sensors (data collection devices) in our businesses that collect massive amounts of data on all aspects of our operations. The real question boils down to what data is relevant and how do I use it?
Can we take some guidance from the way that we as humans process sensory data? Research indicates that we process and act on less than 5% of the sensory data that we receive (vision, smell, hearing, taste and touch). Think about a simple dinner with friends where all of the sensors are fully involved. How does your mind decide what is important? Put very simply, our brain uses a complex set of filters to decide what is important and what is not. Is it perfect? Of course not – if it were there would be no need for auto insurance. Perhaps we can begin learning about how we look at our corporate data by looking to how we as individuals interact with data.
As individuals, we are not all the same. Though we may share common interests and attributes, each individual is simply that; an individual. Similarly, customers are not created equal, yet often times; marketing efforts attempt to employ a one size fits all approach to targeting them.
Successful marketing requires that you understand who your customers are; your top performing customers with high persistence and contribution, ones who like to look but drive limited value, and ones who keep coming back but need an incentive to reach full potential. If we understand these customer attributes, we can more effectively market to similar groups.
Enter the new era of analytics and big data. Now, in cloud-based processes that take weeks instead of months or years, no infrastructure or equipment investment and minimal Information Technology (IT) support, enterprises can use analytics that score customers. These scores mimic the FICO score in their detail by presenting a scale of 0 to 999 rather than just a simple “profitable vs. unprofitable” option. They also indicate the current value of the customer to the enterprise.
Hence, the value of scoring your customers helps you approach your business with more intelligence. It is with this PowerVue Score (specific to VueLogic) that allows you to have an intelligent dialogue with your data. This enables you to:
- Understand the value of every customer at the individual level
- Increase revenue through a more targeted marketing approach
- Decrease cost by creating more profitable and effective campaigns
The value of PowerVue Score to your organization is that it can help you build a more effective campaign. At the same time, understanding what to expect from these campaigns can also be understood by leveraging the VueLogic technology. Also with VueLogic, we give you the ability to:
- Predict conversion rates for offers at various discount points
- Predict the expected number of transactions
- Predict gross and net revenues for a campaign
This is intelligent dialogue with your data; a unique approach to CRM analytics to help you understand your business, your customers, their loyalty, and conversion to offers. By understanding what, when, how, and at what price consumers will buy, you can more effectively communicate your offers with greater response rates. And in this market where companies are working harder to do more with less, it just makes sound business sense to use the data you already have at your disposal, to operate more effectively and efficiently, all while increasing your company’s revenue and customer satisfaction.
- Improve marketing ROI to drive increased and incremental revenue at less cost
- Improve and increase customer acquisition, retention, and cross sell opportunities
- Increase overall marketing effectiveness and efficiency with measureable results
As a business professional, you understand the importance of targeting your organization’s message to effectively acquire new customers, and keep the ones you have. Add to the mix social commerce, mobile, web, and e-mail to conventional marketing channels, and managing and understanding your customers behavior and demographics becomes very difficult; measuring nearly impossible.
Today, marketers want and more importantly need a centralized, comprehensive, and effective method to examine cross channel campaigns. All offers and all customers are not created equal. Even the best offer can miss the mark and fail to trigger a response from a traditional buyer. Ultimately, a deep understanding of who the best customers are and why they buy adds granular insight into where they come from and more importantly, what motivates them.
This is the tremendous value to an organization that customer intelligence ignites. Customer Intelligence further helps to deliver a better customer experience, improve customer service, enhance product development, and shape business operations and overall business strategy.
At the end of the day, organizations are working harder and harder to achieve more with less. Thus, those organizations who rely on customer intelligence are the ones poised for further growth, systemically and systematically, regardless of the economy.
What is Analytics?
Wikipedia defines ‘Analytics’ as “the process of obtaining an optimal or realistic decision based on existing data.” (http://en.wikipedia.org/wiki/Analytics)
However, the question remains; what does this really mean to a person looking to make a difference in the performance of their business? In the not-too-distant past, business leaders relied on intellect, intuition and observation to understand and decide issues in their business. As companies grew and information became increasingly abundant, it became impossible to rely on these old methods and demanded a different approach.
The result is an evolving art known today as ‘Analytics’. While data continues to accumulate in corporate data stores, complex mathematical algorithms and statistics look for relationships in the data that for the most part are not obvious. The intent of this analysis is to gain a detailed understanding of, “if you do this then that should happen”. The “that should happen” can be either positive or negative for an organization. Both are valuable, either from knowing what to avoid or what to do more.
Applied Math x Data = Better Decisions = More Money (Analytics Simplified)
VueLogic attended the annual Direct Marketing Association show in San Francisco in October (DMA2010 Conference http://www.dma2010.org/attendees/program.php), and during our travels up and down the aisles, one common theme that I frequently heard was that “everyone is doing analytics” these days. If this is indeed the case, that is good news for the end users and certainly for the analytic services providers.
But – upon further discussion with quite a few people, there was a wide-ranging definition of not only what type of analytics were being done in the market (i.e., custom modeling, or using preexisting analytic frameworks, etc.), but also who was using them, and at what cost.
Certainly, not everyone really needs a custom model. I believe that there is a new breed of “analytics” available today – far more powerful than before, but stopping short of being built for a specific user. Before making a large financial commitment, resellers and end users should consider whether an existing analytic framework will fit their application needs – you may save a significant amount of time, money, and resource!
At the Retail Summit conference this week, we had a chance to listen and talk to leading retail executives. Richard Scott Saban was one of the attendees and offered great insights during the conference.
I really enjoyed his Feb 18, 2010, Retail Touch Points article, “Powering Customer Intelligence with Predictive Analytics”. (http://retailtouchpoints.com/retail-crm/429-powering-customer-intelligence-with-predictive-analytics.html)
Scott talks about the question that these economic times spark for all of us, “If only I had a crystal ball…” Scott comments that predictive analytics put the crystal ball in our hand. He notes that that seeing the future and what our customers want from us is based on leveraging our customer data. Creating a single view of our customer offers us the ability to differentiate their experiences and motivate engagement. With that single view we can determine which customers will respond to a particular promotion – thus giving us a virtual crystal ball.
I had to smile when I read Scott’s reflection on mass messaging as a “weapon of mass destruction”. He shares what we all know about promotion fatigue – “The destruction is a direct result of becoming an annoyance to your customers by bombarding them with offers that have no relevance to them”. Aren’t we all too familiar with those providers that send us messages too often and don’t seem to have any idea about what we are interested in? Let’s commit to eliminating those “weapons of mass destruction” and leverage what we know about our customers to give them what they want and get what we need. (There is another blog idea in that “Rolling Stones” song!!)