Why Data About Your Customers is so Valuable
Having spent a good portion of my professional career working directly with clients, I have learned a lot about what their expectations are when they engage a consultant. Simply put, business clients purchase software and services with the expectation that their company will benefit in ways that outweigh the costs. From a sales and marketing perspective, service providers need to assure prospective customers that their offering will provide more return and better value than the offerings of their competitors.
The vast majority of money spent in public-sector businesses ultimately leads back to consumer purchases. In many cases there is a complex hierarchy of solutions and services that support that buying activity, but in the end the trail leads back to a consumer purchase. Whatever part a particular company may play in this process, to be successful they must understand what motivates their customers (businesses or consumers) and leverage that information in a meaningful way.
Many people have written about creating loyalty among customers and how much value that can create over time. A common practice of late is for service providers to create organizations focused on Customer Success whose primary purpose is to ensure that customers are happy and ultimately remain customers. These organizations need data to understand the effectiveness of the methods they employ. Simply looking at the retention rate does not tell the complete story and won’t give a business the information that it really needs to make necessary adjustments quickly enough to gain an advantage over their competitors.
Businesses that target consumers rather than businesses face a more traditional challenge when trying to understand what motivates their customers. While the challenge to develop a loyal customer base for consumer products has been around since man first began to barter, it has changed in fundamental ways. Social media and the increased capacity for direct communication are definitely game-changing technologies that must be taken into account. Consumers have more choice than they have ever had, as the Internet has created a worldwide market for even everyday purchases. In a world where consumers have virtually unlimited options, brands need to create loyalty through extraordinary customer service.
Mobile technology means that consumers are no longer tied to their PCs when shopping online. A few years back I realized the potential impact of mobile when I began doing online price checks while shopping. This allowed me to better understand the actual value of items that I saw in stores. On top of that there are the customer reviews that seemingly go hand-in-hand with e-commerce today. Wondering about a TV on sale in a local store? Jump online and check reviews to make sure your aren’t buying a lemon. While online you can check to see if you can get a better price somewhere else.
Now, I can buy practically anything from anywhere via my mobile phone and its connection to the Internet. The current consumer environment requires that companies create and maintain loyalty in order to maximize profits. Prices are only part of the equation, as service and convenience can often override a slightly lower price. The vast majority of consumers are motivated only by self-interest, wanting the best value for their money. As a result, effective businesses will need to understand how to make their customers feel that shopping with them is in their best interests. The best way to do that is by gathering information about their key customers and using that information to develop a customer experience that maximizes the number of loyal customers.
Post originally published at: http://beauchenebi.blogspot.com/2013/02/why-data-about-your-customers-is-so.html