Customer identification has always been on the short list of business case justifications for launching a customer loyalty program. For brands in retail and other sectors, the need to link “who” is buying to “what” is being purchased can yield tremendous benefits.
Data Mentors, a Florida based data analytics firm, provides a great analysis of where many brands stand on knowing their customers in today’s guest post. The article cites valuable third party research from Accenture, IBM and others and offers compelling thoughts about how you can become more efficient in managing your customer data.
Do You Really Know Your Customers? 4 out of 5 Consumers Say No!
You may think you know your customers, but according to a new study by IBM, nearly 80% of consumers stated that brands really don’t know them. By now you know that this is the age of the empowered consumer. You need your customers more than they need you, but if you don’t really know them, they will quickly find a competitor who does.
Other findings from the study reveal that:
- Only 22% of consumers say the average retailers understands them as an individual
- Only 37% believe their preferred retailers understands them as an individual
- Only 21% said that communications are “usually relevant”
Not knowing your customers proves to be costly. According to Accenture, a customer’s main reason for switching brands includes poor customer experience, losing trust in the company, customer service representative’s lack of knowledge, and lack of personalized/customized solutions. Each of these scenarios could have been avoided by understanding these customers and their preferences.
If you are ready to really get to know your customers, check out these tips to keep your customers loyal (and spending more!)
WHERE IS YOUR DATA?
Answer One: “It’s in one database. All my data is clean and I can access it at any time.”
Answer Two: “It’s all over the place, in different systems, spreadsheets, and old databases”
Congrats if you have your data in order, but unfortunately for most of us, we have to go with what’s behind door number two (yep – our data is all over the place). Just take a look at the statistics:
- 53% of organizations surveyed consider a single view of the customer a priority. The biggest challenges to developing this 360-degree view are difficulties with keeping track of data among multiple systems, data redundancies and silos. On average, organizations use 36 different data-gathering systems and vendors for marketing efforts. (Forbes Insights)
- Only a quarter (24%) of all respondents feel that customer communications and data gathering systems are fully integrated, while 13% report no level of integration at all. (Forbes Insights)
- A lack of analytics tools and repressive data silos lead companies to ignore 88% of their customer data. (Forrester)
If any of this sounds familiar, it’s time to take the plunge and invest in some data management. A data integration and quality solution will pull all your data sources together into one database, ensure the data is accurate, remove inconsistencies such as duplicate names and old addresses, and will give you the tools you need to improve your customer insights.
DO YOU HAVE ALL THE DATA YOU NEED?
This may sound like a bit of an oxymoron. After all, there is PLENTY of data out there, too much in fact. How can you not have enough data? But even with all the data out there for the taking, you may not have the RIGHT data.
Customer records may be missing phone number or email addresses. Or perhaps you want to know about the type of car they drive, their income, and their hobbies. The good news is that most of this data is out there and can be appended to your customer records.
Choose a vendor that offers multiple types of data append services, such as consumer demographics, business firmographics, online IDs, email addresses, and phone numbers. Several vendors also offer access to real-time data enhancement where you can instantly append your records at any time via a simple API.
The point is, if you are missing information on your customers then you only have half the picture, and data appending is a crucial step to make sure you understand the entire customer picture.
ARE YOU TARGETING YOUR CUSTOMERS WITH THE RIGHT MESSAGES?
With a newly cleaned, integrated, and complete customer view, you can really show your customers that you know who they are and what they are about. Use an analytics solution to analyze customer characteristics, such as:
- Behavioral: characteristics such as: frequency of purchase and which channels do they use. For example, did they respond to an email, direct mail piece, or browse online before visiting your store?
- Demographics: factual characteristics such as: age, gender, occupation, and income. For example, are the majority of your customers female or male? Where do they live? Are they single or married?
- Psychographics: characteristics such as: values, attitudes, and lifestyles. Psychographic information answers questions about what motivates your customers to buy your products and services, their key values, and their hobbies and habits.
- Value-Based: actual or potential revenue of customers and prospects and the costs of maintaining relationships with them. Analyzing these attributes will help you better allocate resources to the most-profitable customer groups.
Based on any combination of these characteristics, you can develop key customer segments and develop highly targeted marketing strategies for your unique customer groups.
ARE YOU PERSONALIZING THE CUSTOMER EXPERIENCE?
As we discussed, customers who feel like they are treated as individuals are more satisfied and in turn, more loyal because they feel like you know them. While people prefer to be greeted by their first name versus “Dear Customer,” personalization goes well beyond this, such as recommendations when shopping on-line based on past purchases, abandoned cart offers, or alerts when something they like is on sale.
Research shows that 45% of consumers are more likely to shop on a site that offers personalized recommendations, and 56% are more likely to return to a site that recommends products.
When deciding which types of personalization to utilize, consider the following statistics from MyBuy’s 2015 Personalization Consumer Survey. Consumers purchase more from brands who:
- 53% – Suggest products based on browsing or buying behavior.
- 49% – Personalize online ads that promote offers and products from website activity.
- 48% – Send personalized emails based on past browsing and buying behavior.
- 48% – Personalize the shopping experience across all channels.
- 33% – Show personalized ads in social media feeds.
While there is obviously huge uplift when personalizing consumer interactions, many marketers are unaware of the negative impacts of sending impersonal messaging. A recent survey by Gigya revealed that 67% of consumers have unsubscribed from an email list when sent irrelevant information. An additional 43% ignored future communications from the company, and 32% stopped visiting the company’s website or mobile app.
Even if you think you may know your customers, chances are you don’t really. Remember, 4 out of 5 consumers say that brands don’t know who they are. It’s certainly worth taking a better look at the data and strategies you have in place and avoid becoming statistic.