The final part of our mini-series
We’re serving you up three easily-digestible features to help you get to grips with business’ hottest tech trend. By the end, you’ll understand what everyone means when they say “big data” and “data analytics”, and how to take advantage of new technologies to do dramatically better business and gain serious competitive advantage. Warning: this content is for ambitious managers, not tech-heads. This is a jargon-free zone.
Let’s imagine a shopping list for your business activity over the next few months and years – what would you most like to achieve to help your business grow? I’ll bet that in an ideal world your virtual trolley of business growth ingredients would include all of the following: a packet of improved customer loyalty; a generous sprinkling of higher transaction rates; a large jar of insights into customer behaviour; and one almighty feast of a customer experience that knocks the socks off your competitors’ offerings.
Now, we don’t want to overcook your expectations. But the title of this feature is probably a bit of a giveaway, because, as the most astute among you will have guessed, we’re going to explain how business analytics can help you achieve all those rather tasty ends.
If you’ve followed this series throughout part one (our introduction to big data and business analytics) and part two (which explained how to use business analytics to gain competitive advantage), you should hopefully be pretty up to speed on what big data is and how you can crunch it using analytics to get ahead in business.
This – the third and final in our mini-series – aims to explain how you can use analytics to make customer experience unprecedentedly personalised and relevant. Ultimately, the greater your understanding of and use of analytics, the better your business performance is likely to be. As an MIT Sloan and IBM Institute of Business Value study found: “Organisations that excel in analytics often outperform those who are just beginning to adopt analytics by a factor of three to one.”
The risk posed by today’s ultra-demanding customers – and the opportunity therein
Customers and clients – they don’t mean to be such a pain. But in today’s digital-everything world, they leave you with a messy, discombobulated trail of data that is a nightmare to draw anything coherent from, and their activity across multiple channels can be beyond a pain to manage.
Buyers and browsers have gone multi-channel. They expect to receive a seamless experience as they flit across your mobile site and app, your website, into your premises, on your customer services helpline, your social media channels and your email and online marketing campaigns – all without a second thought about what a fiendishly complex task it is for you to keep track of them, let alone provide a meaningful, personalised and coherent offering just for them across all those different channels.
The tragic thing is that this means many businesses – particularly small and medium-sized businesses – are falling behind in how they handle customers in this seemingly endless multiverse of digital channels and interactions. Larger or more tech-savvy rivals are simply offering better, more joined-up customer experiences, and so sucking custom away.
The companies missing out are those that fail to track the route a customer takes across different digital channels. They cannot draw meaningful insights from data collected on them at each. That renders them unable to understand customer behaviour, or broader buying trends, or where marketing resource is most efficiently allocated. This is, in part, why we have witnessed the downfall of so many former high street stalwarts in this country – those that were unable to keep pace with the new dawn of digital.
The risk the new digital and data landscape poses is acute.
But as every true entrepreneur and manager knows, where there is serious risk, there is lucrative opportunity. If companies are struggling to navigate the new data and digital landscape effectively, then you can gain competitive advantage by pushing ahead and offering a better service to customers.
Customers are becoming increasingly multi-channel – i.e. interacting with you across various online and offline channels of communication and transaction, and across different devices. Multi-channel customers may seem messier to manage, but they are significantly more revenue-generating. It is widely estimated that multi-channel shoppers spend 30%-50% more than single-channel shoppers, while Deloitte has estimated that multi-channel customers can spend as much as 80% more per transaction.
So how do you ensure you’re serving the new generation of buyers in a way that maximises revenues, eliminates waste and gives you significant competitive edge?
Using analytics to offer the ultimate customer experience
The most sophisticated business analytics packages allow you to track a customer’s journey across multiple points of interaction with your business, collate data on them, and offer an unprecedentedly personalised customer experience as a result.
With the right technology, you can even come to predict customer behaviour, anticipating their needs and making sure you’re always offering what they want, exactly when they want it. You can tailor offerings and communications to individual customers based on their digital and buying interactions with your business. You can also pull out broader trends in group buying behaviour to identify lucrative new customer segments and re-allocate resource according to which channels and campaigns prove most effective for certain customer groups. And because so many of these processes are automated by sophisticated analytics packages, you save time and resource while you’re at it.
How? Analytics software makes sense of the seemingly infinite amount of data you can collect on customers and pulls out useful, actionable patterns and insights. IBM’s smarter Commerce, for example, manages customer interactions across multiple channels, analyses which channels are most effective at communicating with a customer, and so allows you to interact with them in a personalised, targeted way (among a range of other tasks). It’s so effective, in fact, that IBM reports that businesses using Smarter Commerce have seen up to 300% productivity and campaign volume growth, 10-20% increase in response rates and 20-40% lower campaign and marketing costs.
The best analytics packages available are all about connecting the dots between interactions with customers – whether in person, digitally or through marketing campaigns – and making sense of that data. You can resultantly create much more targeted marketed campaigns that truly appeal to customers, and better understand their individual needs and those of the segment to which they belong. You might make special offers to your most loyal customers; or track social media sentiment to refine offerings and better appeal to customers; or understand which marketing channels are most effective at converting to transactions, for certain types of customer, and so fine-tune your marketing strategies and cut down on spend.
Let’s come back to the case study we looked at in the second feature in this mini-series, Cincinatti Zoo. The zoo was able to save $40,000 in marketing expenditure in the first year of using IBM analytics technologies, and cut its advertising spend by 43% by eliminating ineffective campaigns and segmenting customers for more targeted marketing.
This video explains how that was achieved, and how analytics helped the zoo realise other major savings and opportunities:
The expectation of personalisation
Analytics is also about making every customer feel valued on an individual level. Which comes back to customers expecting more from businesses – they expect personalised recommendations and experiences. Think of when you buy something online, and the website recommends products to go with it, or suggests items that other buyers who are like you also bought. That’s exactly the level of tailored service customers have come to expect. Fortunately for you, that cross-selling boosts revenue too.
You need a sophisticated system at the back-end to make sense of all purchasing decisions to automate those recommendations. Which, again, is where the most sophisticated analytics packages come in. You need to pull together as much information as you can on them, from across all those different channels a customer uses, to ensure you are always providing them with relevant offerings that feel very customised.
All sounds pretty good, doesn’t it? If you want to find out more about how your business too can increase revenue and improve customer experience and retention, you can…
- Visit IBM’s Analytics section, which is full of useful articles, videos and whitepapers to explain more
- Read our e-guide: Citrix to launch workspace for Google cloud
- Tweet LondonlovesBusiness.com: @londonlovesbiz
- Tweet IBM: @cloudstuff + @vickygillies + @LauraColvine
- If you are interested in attending an event to discuss these converging trends, please send your contact details to [email protected]