Keeping Customers in Sight Requires Insight

By Dave Wendland
 

So you’ve set your sights on your target. Whether consumer, retailer, distributor or alliance partner, you’ve identified your “ideal” customer. The reality is that, for many, the process of fully understanding the needs and attitudes of existing and prospective customers stops after “broad brush” identification of the market. That ultimately limits success.

Customer intelligence requires action

There are a variety of high-powered customer intelligence solutions that provide the ability to identify a company’s most valuable customers and empower sales organizations to make smart decisions that result in wonderful customer experiences. However, intelligence without strategic action may be worse than not having the intelligence at all.

To effectively turn insights into action the following steps are generally employed:

1. Decide what you are trying to achieve and with which customers (or customer groups);

2. Develop the data collection approach, including use of existing data;

3. Gather and analyze the data so it can be presented in a clear and concise way that highlights segmented customer requirements, expectations and service usage;

4. Develop priorities for improvement and establish teams to work on them.

Past performance does not guarantee future results

The investment community definitely knows these words. They are the standard caveat in every financial venture, a caution against taking the results of the past — achieved under different circumstances than the present — too seriously when planning future investment strategy. Yet, because historical results are easy to collect and because hindsight is always 20/20, people persist in predicting outcomes based on past events.

Even great marketers make the mistake of using partial data and jumping to conclusions. The fact is that past purchase behavior is useful only when it is fully understood in context. It is important for marketers also to make use of customer profile data. A blend of past purchase data with stated future needs is a much better predictor than the historical record alone.

Past purchase behavior contains some very important data points and should be considered a vital part of the information mix. But placing too much importance on the past can be devastating.

Achieving deep customer insight

To achieve robust customer insight, you have to ask and observe in multiple ways with disciplined processes. Combining face-to-face customer interviews with non-customer interviews and surveys can paint some pretty compelling pictures.

Customer insight is a process that begins with knowing and understanding what your customers want, and ends with proof of their satisfaction with your organization or the product you are delivering. It includes:

1. Identifying customer needs and expectations, not only of your unique offerings, but also of the level of service you provide;

2. Examining your processes to ensure they are customer-centric;

3. Enabling your employees to be able to focus entirely on the customer;

4. Implementing actions to improve the customer experience

5. Measuring performance, customer behavior and customer perception to determine what further action is required.

Leading to better decisions

Good customer insight, from thorough mining of customer data, effective segmentation and analysis and genuine feedback from existing and prospective customers will allow you to make better decisions about where to target scarce resources. It may challenge assumptions and prior decisions based on misleading anecdotal — rather than evidence-based viewpoint — but this will ultimately lead to better-informed decisions and strategies.

Skeptics might say they intuitively know they have different customer segments and have a well-defined understanding of their needs, and therefore additional data gathering and analysis is a costly waste of time. If that’s true, then presumably they also have rising levels of customer satisfaction and a continual customer feedback loop. If not, there is room for improvement.

Dave Wendland, vice president, Hamacher Resource Group, LLC. The experts at Hamacher bring their unique balance of art and science to the retail health and beauty care supply chain to deliver customized marketing services, category management, data analysis and aggregation, and a portfolio of complementary capabilities to the US and UK markets. Contact them at (800) 888-0889, or visit www.hamacher.com for more information.