Using data in marketing and profit are intrinsically linked. A study by McKinsey and Company shows how businesses that have used big data and analytics have five to six per cent high productivity and profitability.
This is probably because data and the analysis of it can provide a more personalised customer experience – and research shows that customers will be more loyal to businesses that provide personalised experiences while rejecting those that do not.
To complete the equation linking data and profit, a better customer experience equals retention, and retention leads to greater revenue. A Harvard Business Review study once showed that retaining just five per cent more customers could boost profits by 100 per cent – a huge reward for getting it right consistently.
Repeat customers develop a relationship with the business, and are happy to share more of themselves, which gives the business more data.
The Importance of customer experience
The concept of customer experience involves looking beyond just service and staff to every point of interaction between customer and brand. For example, websites and landing pages, emails and SMS – even the social media advertising that is seen before customers buy anything. External sources like friends’ opinions, online reviews or a company’s public relations efforts can even affect customer experience.
Today’s customers have more information than ever at their fingertips and are better equipped to do their research before committing to a purchase. There will be signs of this research – for example, on a website or on social media – so it is critical that small and medium businesses (SMEs) are able to gather this data.
The amount of research customers do before making a purchase may mean businesses need to collect data from a wide range of touchpoints. The earlier businesses want to provide a personalised interaction with customers, the more touchpoints they will have to monitor and the more data they will need to collect.
The importance of data
Data provides businesses with knowledge about their customers. It shows where customers sit in the sales cycle, how loyal they are and even their mood toward a brand. This data can be analysed to produce insights about either a group of customers or individual customers, or the business itself. By analysing the data, businesses can see why some products are not so popular, which sales representatives are most effective or where potential prospects are leaking from the sales funnel.
Technology is essential for using data to its potential. Customer Relationship Management (CRM) tools can gather vast amounts of real-time data, store it, then conduct analysis cleanly with complex metrics much faster than a person can. Market leading CRMs like Salesforce can also use the data to make predictions that can produce better outcomes for a business.
These predictions can drive marketing efforts to improve customer experience. For example, they can tailor email content to prospective customers based on knowledge of pain points, direct a customer to an expert on a topic of interest or enable a business to recommend new products to existing customers based on purchase history.
How a data-driven strategy can be successful
- Choose the required data. Businesses developing a data strategy should first determine the information that is necessary to collect and analyse in order to drive better business decisions. There’s no point collecting terabytes of data in the hope that it can all be used. Thinking this way at the beginning helps later on when the data is used for CRM predictions and action. Having unnecessary data and insights that cannot be used can get in the way of relevant data and insights. McKinsey and Company believes that a model should start with the opportunity a business has identified, and then the business can see how the model can improve performance toward the goal.
- Work together.McKinsey and Company point out that legacy IT structures may act as silos and prevent proper data storage and analysis. If it is to be properly utilised, a CRM requires the IT systems to support it. When all parts of a business are using a Salesforce CRM, for example, the data within the system is current and complete, meaning that the insights garnered from it and the predictions developed will be most accurate. In the same way, insights generated from Salesforce should also inform all aspects of the business: sales, marketing, communications, and even finance.
- Make predictions and take action. In a report by the CMO Council this year, 43 per cent of marketers said they had no problem with the amount of data they had, but they didn’t have the ability to transform it into real time action. An intelligent CRM like Salesforce crunches raw data to develop meaningful insights that can be acted upon and is equipped with an artificial intelligence (AI) system called Einstein AI that enables businesses to take intelligent action. For example, it can automatically generate help topics online for consumers or enable businesses to create bots that can handle simple customer queries. However, it is crucial that the system is used across the organisation so the customer experience is consistent. The same CMO Council report found that 41 per cent of marketers believe that fragmented platforms and systems were getting in the way of successful customer experience strategy.
- Ensure the business can capably execute. The capability of data systems are constantly improving and changing, and businesses that get the most from data will embrace change and learn. In talking with businesses, McKinsey and Company also found that managerial distrust for big data systems is a reason they’re not used. While managers using the tools sometimes need re-education, it’s important for statisticians and IT staff to keep in mind what frontline managers require when acting on insights daily.
A current picture of marketing suggests that businesses are focusing on customer experience, but there is still some way to go. In the CMO Council study mentioned above, 47 per cent of marketers admitted that the personalisation their organisation offers is selective and only five per cent believed they were able to deliver hyper-personalised experiences across all touchpoints. A successful data strategy could prove the difference.
What Blirt Offers
Blirt shows you how you can make your business a more successful, data-driven SME by using the world’s leading CRM platform, Salesforce.
Blirt is a Salesforce Cloud Alliance Partner, so it knows how businesses can use the system to improve customer experience.
If you would like to develop your own data strategy that will improve experience for your customers, we can book a discovery call and help get you started.