• June 24, 2011
  • By Leonard Klie, Editor, CRM magazine and SmartCustomerService.com

Just the Facts? Not Really

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Asked to evaluate how well they use analytics to drive decisions and enhance the customer experience, most organizations respond with perceptions that are very different from reality, according to research from Accenture.

Accenture’s Customer Analytics Survey of 800 directors and senior managers at blue-chip companies in Brazil, Canada, China, Germany, Ireland, Italy, Japan, Spain, the United Kingdom, and the United States found that 55 percent of respondents believe their methods for segmenting customers and providing relevant experiences either are “ideal” or “very good.” But, in reality, more than half of the organizations surveyed do not take advantage of analytics to help them target, service, or interact with customers, suggesting that many organizations might not know what is really important to customers and cannot measure their performance in engaging with them.

In fact, organizations are just as likely to rely on personal, on-the-job experiences (which 23 percent of respondents described as “very important”) as they are on hard data and facts provided by analytics solutions (which 22 percent called “very important”).

But relying on personal experiences alone or eschewing hard data in favor of those experiences is shortsighted, according to Julio Hernandez, global lead for customer analytics at Accenture. Nevertheless, Hernandez is careful not to pit experience against hard data, saying that companies need to rely on both. “Experience, while good and valuable, when coupled with facts will make for better decisions,” he says.

“Because the environment has changed so much, some of what you’ve done in the past will not help today with all the new technologies, like social media and Web channels for interaction,” he continues.

Even among organizations actively using analytics in marketing, sales, and service, most are not applying it broadly across the full spectrum of marketing and customer activities. That would include critical areas, such as pricing (86 percent of respondents not using), product/service delivery (77 percent not using), and product development (59 percent not using).

The reasons for not fully exploiting analytics included: the data often is not accessible or takes too long to get, decision-makers are not getting the information they need, corporate leadership does not believe the data provided, and not everyone has access to the same data, Accenture found. Corporate culture also poses a challenge.

Accenture’s research found that companies less experienced with analytics are more likely to cite overall corporate culture as a major barrier (42 percent of respondents versus 33 percent of more analytically mature firms). The more analytically mature firms cite budget limitations (47 percent versus 29 percent), departmental culture (40 percent versus 29 percent of less analytically mature firms), and senior management support (45 percent versus 31 percent) as obstacles to better segmentation.

Furthermore, less analytically mature companies are much more likely to perceive their data sources as accurate and reliable than organizations with more developed analytics capabilities. This might be because larger companies are conducting more regular and complex data manipulation and, as a result, are more aware of the shortcomings of their data and analytical capabilities, the report says.

Accenture’s research also suggests that most organizations analyze and segment customers according to their value to the organization, rather than according to their unique needs and preferences. The most commonly used metrics to segment customers tend to be company-focused, such as profit per customer (cited by 41 percent), lifetime value (27 percent), and how much of a customer’s total spending occurs with the company (24 percent). By contrast, indicators of customer requirements, such as customer needs and behaviors, service levels received, and psychographics, are frequently used the least.

“Leadership creates the environment,” Hernandez says. “When you have a strong leader asking the tough questions, that drives people to get the right answers. That can’t be overstated.”

And, for Hernandez, one of the most important questions is this seven-word query: “Do you know or do you think?”

News Editor Leonard Klie can be reached at lklie@infotoday.com.

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