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Analyzing the New Customer
Customer analytics are emerging as a competitive advantage.
For the rest of the November/December 2010 issue of CRM magazine please click here
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Customers are more complex—and harder to understand—than ever. After years of economic upheaval, their priorities and behaviors have changed drastically—perhaps permanently. They’re more demanding and better informed, and their loyalty is increasingly elusive.

Change breeds uncertainty, but advanced customer analytics—an integrated framework that employs quantitative methods to derive actionable insights from data, and then uses those insights to shape business decisions—can help set and steer an organization’s growth agenda. Powerful analytical tools can help foster customer loyalty, improve the return on marketing investment, and generate new revenue streams.

In short, analytics can deliver a significant payoff. Research confirms that high-performing businesses—those that substantially outperform over the long term and across economic, industry, and leadership cycles—are five times more likely to use analytics strategically than low performers are. [Note: Visit http://bit.ly/1110tp-pdf for a PDF download.] These high-performing businesses know that technology alone will not create an effective analytical competitor, and they understand that analytics is more than the collection and storage of data. In fact, a company that advances its analytics capabilities has the potential to move beyond mere descriptive analytics toward predictive analytics, which can suggest responses to changing scenarios.

Turning data into actionable insight is increasingly essential—and increasingly difficult. The deluge of data—from such sources as social networks, mobile devices, and built-in sensors—presents tremendous opportunities, but major challenges as well. Chief among these is the burden of organizing, analyzing, and identifying the insights provided by so much new information. Analytical leaders adhere to four principles that are effective in launching or extending customer analytics initiatives:

1. Analyze what is useful and actionable, not just what is at hand. All too often, managers use data to justify what they were going to do anyway. In other cases, they review only data that is already assembled, because it is easy to access. Data must be vetted, augmented when necessary, and put to use in addressing new segments with better offerings.

2. But don’t ignore existing databases that can be mined with fresh eyes. Operational data—such as warranty claims, complaint letters and emails, or contact center conversations—can be an important asset, and often deserves a fresh look to help address customer issues. One insurer, for example, analyzed claims to identify older insured customers at risk of diabetes from inactivity, and now works to head off the disease through an exercise program run by a disease-management company.

3. Restructure processes and personnel to take full advantage of the new insights. Inertia can stop a promising analytics initiative before it fulfills its potential, or even gets off the ground. Analytics must be integrated with everyday business decisions and processes, and may require hiring people who have more of a quantitative focus. The field should not be relegated to a few pricing or promotions experts, or limited to a few isolated applications, but should be used routinely to bring rigor and discipline to key issues such as predicting customer care needs.

4. Embrace a rapid “test-and-learn” approach. When a market is evolving, speed may be more important than completeness. An iterative, test-and-learn approach to developing segment profiles makes the most of existing data. This approach allows companies to gauge the attractiveness of potential offers to customer segments before putting them in the market. Marketers can then better define and control the independent variables, proactively trying out different kinds of stimuli on customers rather than observing them as they naturally occur.

Companies that want to keep in step with—or even get a step ahead of—the changing customer landscape must actively embrace analytics and adhere to those four principles. New data and analytical tools become available every day, providing the opportunity for further insight into a wide range of customer issues. Above all, customers value any offering—and, by extension, any provider—that addresses their needs and desires. That makes it increasingly necessary that you understand and address those preferences for the segments you target.


Robert Wollan (robert.e.wollan@accenture.com) is managing director of CRM (http://sn.im/acc-crm) at Accenture, a global company specializing in management consulting (http://sn.im/acc-mgmt), technology services, and outsourcing.


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