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DATA DETECTIVES

Get Closer to Your Customers in Three Easy Steps

A little data goes a long way toward serving customers better, and can actually amplify the personal touch both you and your customers value so much.
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You hardly need to be told that customers are the lifeblood of your business. And you probably believe you're doing all you can to both attract and serve them well. But here's something you may not know: An explosion of new technologies, rapidly evolving customer expectations, and increasing competition combine to put all your efforts at risk.

To make sure that doesn't happen, put "customer analytics" on your to-do list. At its simplest, customer analytics refers to using data not only to track sales or analyze new markets, but to gain insight into what customers want, how they tend to behave, and what practices help you forge and strengthen ties to them. A customer-analytics effort doesn't have to be costly or complex, but it does require you to think about customer needs and habits in new ways.

Verengo Solar, for example, a Phoenix-based installer of solar-energy products, has grown from $16 million in sales in 2009 to over $100 million last year by embracing customer analytics. Verengo reaches out to prospective customers via many channels, from advertising to door-to-door canvassing. By studying the success rates of each method, Verengo found that door-to-door sales work particularly well in neighborhoods where a current installation is underway, regardless of income level. That insight runs counter to the industry norm of targeting affluent zip codes. "We realized that when people see an installation in their neighborhood they want to find out more about what we offer," says Verengo CEO Randy Bishop. "It's a great example of how data can help us tailor the right kind of outreach and communication with prospective customers."

Tom Davenport, a fellow of the MIT Center for Digital Business and cofounder of the International Institute for Analytics, has worked with companies of all sizes to apply analytics to a range of customer issues. He says that companies don't necessarily have to pursue an ambitious "360-degree view" of the customer with the goal of presenting "one face" to them (a common mantra at large companies), but can achieve a lot simply by following a three-step plan:

1. Focus on one or two channels

"You can't do it all," Davenport says. "Bite off a piece. If you don't currently segment your customer base, start there. You have to know who's buying what and how often." Beyond that, he says, assess what information you get via direct sales, phone sales, retail sales, web sales, etc., and see whether you can do more with it. For example, do you know enough about a product or segment to develop personalized offers? Do you know which forms of upselling are most successful within a given segment?

2. Make structural changes

"Help the people who deal with customers most often capture more information about them," Davenport says. That means equipping them with better tools (see below) and making sure they use them. This is not just limited to the sales side; customer support is a goldmine of information but often it's not properly shared across the company. The solution is not just about technology, however--often it makes sense to rethink how your company is organized. That's what CPO Commerce, a California-based online retailer of power tools, found when it opened an Atlanta distribution facility to better serve customers along the East Coast. The customer service team remained in California, relaying order fulfillment complaints and other customer issues to the fast-growing Georgia location. "We finally decided that we had to unite customer service and order fulfillment under one roof," says CPO VP of Operations Alan Lenertz. "Each group had lots of information and customer insights that the other group could benefit from. Once those departments were united our customer satisfaction rates really improved."

3. Assess your technology arsenal

Customer-relationship management (CRM) software is hardly new, but thanks to the cloud prices have dropped dramatically and usability has greatly improved. The key is to get everyone on the same system, and get them to use it. Nothing gets in the way of achieving a total view of the customer like having different departments use different products, or having some employees capture a lot of data while others never touch the system. One way some companies solve those problems is to modify their incentive programs to reward employees not only for selling or otherwise serving customers, but also for gathering information about them.

The ultimate goal is to use data for more than the usual who-is-buying-what? or which-sector is-underperforming? way. Instead, use it as a way to understand the full scope of a customer's problem, which can create opportunities to sell them a broader, more integrated set of products or services. Or to simply be more confident that you know what their issues are, and you're as relevant to them as ever.

 

 

Last updated: May 29, 2014

SCOTT LEIBS

Scott Leibs is executive editor of Inc. magazine, where he oversees the Lead and Build sections while also handling a range of other writing and editing duties for the magazine, website, and custom publishing projects. He is a former editor in chief of CFO magazine and a former senior editor for InformationWeek, and has written for many other publications, including The Economist and the San Diego Union-Tribune. He is a graduate of Emerson College, Boston University, and the University of Massachusetts.




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