Customer intelligence (CI), derived from customer data, helps business’s understand customer motivations better in order to drive future growth. This data typically falls into one of three categories:
- Personal demographics, which include data such as age, income level, educational profile, and marital status. Such data might be analyzed to explore buying patterns of people in specific income brackets, changes in sales as people age, or sales comparisons of homeowners and renters.
- Geographic demographics, which include data aggregated from specific locations. Such data might be analyzed to explore buying patterns in rural areas, for example, or areas where most residents are young professionals.
- Attitudinal data, which includes any information about how a customer – or potential customer – perceives a company. Such data might be gathered from surveys, contact centers or even comments about a product or service on social media.
Three Ways to Drive Growth via Customer Intelligence
Companies of all sizes rely on data to look for new opportunities and new ways to grow their business. Insights into customers open doors which would, otherwise, remain shut.
Customer intelligence is not only useful in helping businesses acquire new customers but also retaining existing ones
Research carried out by leading market research firm Ipsos, indicates that it cost five times more to acquire a new customer than retain an old one. By collecting information about customers’ wants and needs, likes and dislikes, and how they like to be interacted with, a company can drastically improve the way they manage customer relationships. Doing so leads to happier customers, which means the business won’t lose as many to similar brands and businesses.
CI provides insights into customer lifetime value, the total worth of a customer to a business over the entirely of the relationship
CI helps companies predict not only the lifetime value of customers but also churn rate and customer referral value. In this age of customer advocacy, businesses must, in addition, gather CI to predict which customers are more likely to be brand advocates. A primary goal of any business should be to identify and retain loyal customers who are willing to testify on their behalf and recommend their products and services to peers. Research tell us, after all, that 92% of people trust recommendations from friends and family more than all other forms of marketing.
CI provides insights with which to better understand customer drivers and predict future behaviors
Businesses must understand what motivates customers to act the way they do, so understanding drivers is important. But ascertaining what to expect from customers in the future is as important. Who, and how many, are likely to churn? Become brand advocates? Predicting future buying patterns and preferences enable companies to more effectively pitch products, offers, and messages that are more likely to resonate with specific consumers.
Measuring Your Business Competence
Accurate and objective customer data drawn from customer behavior and purchasing habits provides a viable tool to obtain CI. Ultimately, this data provides measurable metrics that can help a business maintain its relevance with target customers whose preferences are constantly changing. Businesses with more CI at their disposal are more likely to meet the demands of their customers, finding answers to such questions as:
- How do customers see us?
- What must we excel at?
- Can we continue to improve and create value?
According to an IBM study, only 34% of businesses in 2013 had an in-depth understanding of their customers. However, the study also indicates that by 2017, 78% of businesses would increase their investment in CI initiatives as more and more came to recognize that the customer is a business’s most important asset.
In fact, we are already seeing evidence that customer intelligence is delivering positive results for many companies. In early 2015, Forbes reported that customer data-driven businesses saw higher levels of customer engagement, loyalty, and sales than businesses which relied less on customer knowledge.
The Forbes report demonstrates that strong focus on customer intelligence is directly linked to business performance, particularly revenue growth and profitability. This is because customer intelligence helps companies develop and/or accelerate the maturity of key competencies within the company. Companies that have effectively used customer intelligence to drive operations experience clear market advantages, making customer intelligence a true cornerstone of success.