Every CEO is on the lookout for new insights that will help keep his or her company viable. In recent years, big data analytics has become critical to the way business leaders make high-level decisions.
According to McKinsey & Company, executive teams that make extensive use of customer big data analytics across all business decisions see a 126 percent profit improvement over companies that don’t. And those that champion customer analytics “broadly and intensively” as a whole company see 6.5 times more customer retention, 7.4 times more outperformance of competitors and almost 19 times more above-average profitability.
When you organize your company by unique customer lifetime value, you can make use of the segments and micro-segments that big data analytics have revealed and defined to maximize profitability, market share and competitive advantage. By targeting customers at the right time, with the right product mix, in the right way, you can gain the most value from every customer.
If you’re ready to maximize your company’s profits, revenue and efficiency, here’s how to make the most of this readily available customer data:
1. Identify the data that matters.
According to IBM, 90 percent of the data in the world today has been created in the last two years alone. And while you may be better equipped to handle the influx of new data from a variety of sources, you may also be buried in meaningless data.
It’s increasingly important to get beyond the “gather everything and sort it out later” approach to big data, and instead track and capture the consumer-generated data that provides a direct value to your company. Look for correlation between customer characteristics and buying behavior to see how your customers interact with your products and services and make a list of the big data analytics that will matter to your bottom line. Then work with your marketing and sales department to make sure that every metric you plan to capture represents accessible and actionable information.
2. Use metrics and segmentation to reorganize your customer’s experience.
A focused understanding of your customer base can drive innovation, product development, segmentation, marketing and operations, but only if you use it to develop a more customer-centric organizational structure.
Analyze your current data on your most valuable customers. Use your analytics to break down which characteristics these customers have in common and which characteristics they do not share. Segment and organize consumers according to their preferences to create clear lifecycle delineations for each segment.
3. Reorganize your departments by customer preference rather than product line.
This is by far the most difficult change to execute on. When the time comes to align your company to these new customer-centric priorities, assign each Product Chief to a different segment. When functioning properly, the customer experience will be guided by the customer’s lifecycle need for each product– not your Product Chief’s need to meet his sales quota.
When you inevitably face a question such as how new products feed into the organizational structure, let these segment owners work together to create value between the customers and the business. As segment owners use big data analytics to track shifts in the needs of the customers in their custody, they will work with other segment owners to define the optimal new product that will capture the most value.
4. Take calculated action.
If you’re part of the Harvard Business Review’s estimated 70 percent of companies that don’t feel they understand their customers’ needs well enough to identify what initiatives will drive growth, then you already know what to do next: act. You must use what you learn to apply these clear, meaningful insights into your customer base and develop targeted and localized offers for your customers.
In ecommerce industries, customer-centric offers can be targeted by online activity and social media analytics. In retail industries, customer-centric offers can be targeted by location and shopping occasions. And that’s just two ways this data can influence your marketing approach– the more time you invest, the more powerful an impact this data can have on your business decisions.
Organizational structure inherently defines a business’ culture and the limits of its operational processes. And since all successful business owners know that they’re in business for their customers, the question becomes this: Does your business organization reflect your business’s values and the future of your industry?
By taking advantage of the latest big data analytics to identify consumer preferences and segment customers based on those preferences, C-level executives in every industry can align their structure and product offerings to create value.