Today, in this digital era of analytics with the ability to measure anything and everything, companies who track customer behaviors and analyze them to discover actionable insights have an edge over their competitors. Everyone knows the saying, “the customer is always right” and one thing that we can be sure of is that customers are always right when it comes to what they know better than anyone else — themselves. People want to feel heard and understood. Now, more than ever, customers have an opinion and they not only want to share it, they want their opinions to be acknowledged and acted upon. Cue customer intelligence software for its entry to the stage.
There is no better way to do so than collecting the information that they are providing, both directly and indirectly via their own behaviors, analyzing it to find patterns across the majority and then using that data to detect what is unique about the behaviors of each individual. Next, playing it back to them, either in the form of Tweets, reports and newsletters or incorporating it into a highly personalized, tailored shopping response to whichever relevant metrics have been collected and analyzed. Such metrics can be as simple as favorite color, birthday, most played song on their playlist to complex demographic, psychographic and geographic information. Of course, amassing all of this data and making sense of it wouldn’t be possible without the aid of software platforms specifically designed to harness all of the input collected and translate it into actionable insights like issuing automatic birthday greetings and coupons, informing product development with next version features or new concepts and guiding the customer experience to ensure that the brand is meeting the expectations of its buyers. There are two main reasons why your business needs customer intelligence software: to make money and to save money.
What is Customer Intelligence Software?
First, a short primer on what it is, then some details on why your business needs customer intelligence software. In a nutshell, customer intelligence platforms consist of the following.
- A database. A giant warehouse which neatly stores, labels and manages the inventory for;
- A statistics package. Advanced mathematical modeling designed to aggregate, annotate and manipulate data to detect patterns and outliers;
- A sophisticated calculator. This software will calculate the necessary numbers associated with the collected data.
And, like all software solutions, customer intelligence software runs on a computer: how much computational power is required is directly related to the volume of data collected within the database and the number of high-order calculations (how much data, in combination) being analyzed.
Types of data collected are nearly infinite. Active input includes providing all your personal information, including contact coordinates, gender, marriage status, financial information and the like. Some brands request that you answer specific questions regarding your preferences for certain things (for example, your favorite colors, bands, songs, sports teams, clothing sizes, style choices, etc.) so that they can build a profile for you. That profile is the equivalent of a customer persona in market research “speak”. Similar profiles are then bucketed and managed in a similar way. Outliers are flagged and addressed separately, typically with a different course of action. In this way, customer intelligence software enables companies to understand how certain behaviors, preferences and demographics work in concert to drive the activities of the consumer. Knowing this, companies can tailor their product offering and customer engagement experience to meet those expectations.
For some customers, having companies track every single one of your transactions, engagements and personal preferences clearly crosses over into the “big brother” territory with an extra high creep-out factor. For those customers, there are “alternative” solutions available on the dark web but what goes on in there is well beyond the scope of this article. For the rest of us, we have come to accept the passive and active collection of our data as the new normal, the standard way of doing business today. And, the information that we provide, willingly or begrudgingly, is now simply part of the contract requirements to get whatever it is that we want.
On the contrary, companies that we entrust with this precious and highly sensitive data are obligated to protect it – doing so ensures their continued permission to operate. Violate that trust and there will be consequences. Case in point, Facebook, losing $149 billion in value on one day of trading alone, being grilled before Congress for its illegal data scrape fiasco with Cambridge Analytics and the growing tech-lash that has plagued the giants of Silicon Valley all year.
Why Your Business Needs Customer Intelligence Software
Last year, the firm, Aberdeen conducted an analysis of various success metrics comparing retailers who used customer intelligence software versus those that did not. The results make it strikingly obvious why your business needs customer intelligence software. Three times greater retention, 20x greater account growth year over year and double the total revenue is the resulting upside for companies who use customer intelligence software compared to those who did not.
Those statistics clearly substantiate the first of two reasons why your business needs customer intelligence software:
- Make Money – when you use customer intelligence software, you are leveraging what you know about your customers to serve them better. Specifically, to serve them as individuals with custom engagements versus treating them en masse. When customers feel their unique needs are being met, their sense of loyalty deepens and that sentiment translates into customer continuity and recurring revenue.
- Save Money – when you truly know your customers, their preferences and their expectations, you are in a better position to target them more efficiently and more effectively. Because of the insights that you have on your customers, you have a priori knowledge of what is going to work versus not work with them and for them. As a result, you can get things right the first time. This leads to conservation of resource as well as an added bonus of heightened customer satisfaction, which, in turn, fuels the number one reason why your business needs customer intelligence software – to make money.
Applying customer intelligence software effectively can be readily measured. Are you generating more or less revenue than when you first implemented it? Are your customer satisfaction, retention and repeat purchase scores increasing? Are you collecting actionable insights that are being translated into personalized outreach to your customers and into new product development opportunities? If you answered “yes” to even one of those questions, we have made our case. The reasons why your business needs customer intelligence software are clear.
As customer-centric processes become the norm and customers place more importance on being part of the process, companies need to take advantage of everything they know about their customers to succeed and to leapfrog their competitors. The choice is obvious. If making money and saving money sound appealing, think about these two reasons why your business needs customer intelligence software.