Right now, the buzz surrounding customer analytics is unmistakable. But are companies going about customer analytics the right way? Here, the evidence is more nuanced. And as a result, one very plausible conclusion is that despite the very evident interest in customer analytics, significant opportunities are being missed.
Listen to the excitement around customer analytics, and the word ‘social’ crops up a lot. As in ‘social media’, ‘social channels’, and ‘social listening’, for instance.
And to be sure, there’s nothing inherently difficult about—say—using open source analytics languages such as R to access and analyse social media such as Twitter. (Type ‘access Twitter API’ into Google, if you’re curious.)
We’d go further, and add that here at Matillion we use R, and have nothing whatsoever against it, or against the idea of using it to mine social channels for insights into customer behaviour.
But our point is this: mine social media after first of all making sure that you’ve picked all the low hanging fruit in customer analytics.
Which generally aren’t to be found in social listening.
Customer analytics: get the basics right.
For most businesses, their existing customer data represent a real gold mine. And it’s often one that’s far from fully exploited.
Buried in your ERP system’s database, in short, is a wealth of data regarding real customer behaviour. And it’s behaviour that’s a great deal more concrete than what customers might be typing into social media, not least because it involves real-life transactions.
Which products customers bought, for instance. Which products customers didn’t buy. Which products customers enquired about, but subsequently didn’t buy. The prices that customers paid. The products that they bought in combination with other products. And so on, and so on.
And, we’d stress, this is hard, concrete data that you already possess. No social channels to interrogate and interpret: this is data that is already in your ERP system.
Customer analytics: pointed questions, hard facts.
What can you do with this data? Ask questions, in short. Questions that can have some very interesting—not to say profit-enhancing—answers.
Who are your most profitable customers? Who are your least profitable customers? And in both cases, it’s not necessarily those customers who you think are the most—or least—profitable.
And why are particular customers less profitable? Pricing structures are one obvious answer, but customer analytics can also quickly highlight instances due to concessions made on packaging or shipping charges, or special deals in terms of delivery frequency, or minimum order size. Taking firm action here can quickly boost profitability.
And your most profitable customers? Often, they’re those loyal ordinary unregarded repeat purchasers who don’t get offered special terms, or don’t stand out due to their volume of business. But what are you doing to retain them?
Customer analytics: emulate Amazon.
And what about customer analytics’ real gold mine? Namely, Amazon-style ‘Customers who bought this are likely to want to buy that’ analyses.
Time and again, sales analytics has been shown to enable businesses to sell more products to existing customers, increase transaction sizes in respect of new customers, and improve the targeting of sales promotion activity.
For proof, just think about your own behaviour on consumer websites such as Amazon. But the Affinity Analysis and Basket Analysis customer analytics tools that deliver these insights are applicable to all types of trading activity—business to business as well as business to consumer.
Customer analytics: more than social listening.
In short, while social listening has its place in customer analytics, it’s something to explore after all the basics have been covered.
And covering those bases has never been more straightforward, with Cloud BI solutions delivering customer analytics on an ‘as a service’ basis in a matter of eight to ten weeks.
Moreover, Cloud BI-based customer analytics has never been more affordable, requiring only a minimal fixed-cost upfront investment. Thereafter, the cost is a monthly subscription—and a subscription, what’s more, than can be paid for out of the additional revenues and profits that result from the insights that customer analytics is delivering.
The bottom line? Customer analytics is gaining traction fast, and social listening is a valuable part of that. But don’t forget the basics—and tackling these with Cloud BI-based customer analytics has never been easier.
To discover even more benefits of customer analytics, check out our free guide to implementing effective Business Intelligence solutions