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CRM Analytics: Shifting the Balance
What's relevant to customers and sustainable for businesses?
For the rest of the August 2011 issue of CRM magazine please click here
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In a market transformed by globalization, technology advances, and economic volatility, companies must better differentiate their customer value propositions.

The priority is to build an understanding of which products and services customers value—and what they are willing to pay for them. But, with up to 95 percent of products failing at launch, most companies struggle.

Recognizing the Perception Gap
At the heart of the problem is a disconnect between how well companies think they serve the market and how highly customers rate their experiences. Accenture puts this disparity into context. Across blue-chip organizations surveyed in our 2011 Customer Analytics Survey, 55 percent of executive respondents believe their methods for segmenting customers and delivering relevant experiences are either “ideal” or “very good.”

Those findings contradict consumer research. Just 21 percent of respondents in Accenture’s Global Consumer Survey believe they receive tailored, relevant experiences from service providers; indeed, two out of every three consumers changed providers in the past year.

Rebalancing Required
Many organizations perform statistical and quantitative analysis to segment customers. A huge opportunity exists to extend these capabilities ultimately to heighten customer experiences. Those that capitalize will be able to improve their bottom lines.

The tools to make this happen are available, but a wider emphasis is needed. Research shows that instead of using analytics to hone customer value propositions, the most commonly used metrics for analyzing customers remain internally driven. The emphasis is on understanding profit per customer, lifetime value, and share of wallet—all relevant, but they address only half the equation.

Indicators of customer requirements, such as consumer preferences, are often the least used. Just 14 percent of respondents use analytics to customize pricing. Seventy-seven percent are overlooking the potential for data-driven insights in product delivery. And 59 percent fail to apply analytics to their product development.

Leaving Money on the Table
Bombarded with marketing messages, consumers are now selective. They trust peer reviews on products and brands more than they do ads. When their value expectations are not met, they switch providers and share their customer experiences via social media.

The opportunity for companies to seize a competitive edge is enormous. More than half of those surveyed are not taking advantage of analytics to help them target, service, or interact with customers.

What is Holding Companies Back?
Less analytically mature organizations are more likely to perceive their data sources as accurate than organizations with more developed analytics capabilities.
Corporate culture also poses challenges.

Though almost 70 percent of respondents said their senior management was highly committed to analytics and fact-based decision-making, less mature organizations struggle with a lack of ownership for this vital capability. Even among more mature analytical organizations, budget limitations, departmental culture, and a lack of senior management support were cited as obstacles.

Looking Ahead
Sales and marketing teams have better data, and more of it, at their disposal than ever. But how should they integrate analytics? For one thing, these teams can attract analytics experts through stimulating work environments. They can focus their analytics capabilities for maximum business impact, creating centralized analytics “engine rooms” that can underpin fact-based decision-making.

Quality of data is key; key information on customer needs, pricing, and product performance is critical. Accountability and education also are vital. Leaders must shepherd the application of analytical insights.

It’s critical that organizations remain persistent and accept that changes in decision-making, processes, systems, and cultures cannot happen overnight.


Tzeh Chyi Chan is a senior executive at Accenture Customer Relationship Management and Julio Hernandez is a senior executive at Accenture Analytics.


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To contact the editors, please email editor@destinationCRM.com
Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationCRM.com/subscribe/.
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