- Why use data analytics in my company?
- What is market segmentation?
- What is the largest advantage to segmentation?
- Why should my company do a churn analysis?
- Why profile my customers?
- What is propensity scoring?
- Why does the acronym RFM stand for?
- What will a RFM tell my company?
- What if my data is not clean?
- Why should I survey my customers?
- What are some of the key performance metrics that should be focused on?
- What is the customer intelligence process at Statistics Solutions?
Why use data analytics in my company?
Most companies are not capitalizing on the profit potential that internal customer data can provide. Using data analytics provides insight into your existing customers; you can predict purchase and churn of customers, and you can maintain a competitive advantage. Data analytics provides customer intelligence so companies can make data-driven decisions and remarkably increase their sales and marketing effectiveness.
What is market segmentation?
Segmentation statistically divides the market into multiple clusters of customers that are similar with respect to their product or service needs. Segmentation can help you message appropriately to each customer segment (see our February 2012 Newsletter).
What is the largest advantage to segmentation?
By segmenting customers, companies are more able to uniquely satisfy their needs, and customers may pay a premium for that unique satisfaction.
Why should my company do a churn analysis?
New customers are often five times as expensive to acquire compared to existing customers. If you know customers who are likely to churn, you can develop programs to halt that attrition.
Why profile my customers?
Profiling customers can identify the most and least profitable, where you can then seek new prospects that fit into those highly profitable profiles. Those customers that are most profitable can now be selected to get better service, designated to a more experienced sales person, or given a new offer. Conversely, customers that are the least profitable or make a lot of claims can be identified to force churn.
What is propensity scoring?
Propensity scoring is the ability to use behavioral or demographic variable to predict the likelihood that a set of prospects will purchase your product or service. Historical customer data is used to build the propensity models, and those models are then applied to a new dataset of prospects, thereby directing and making more effective your sales and marketing efforts.
Why does the acronym RFM stand for?
RFM stands for recency, frequency, and monetary value. RFM is an important analysis in that customers who have bought recently, bought frequently, and have spent the most amount of money are the best customers to target.
What will a RFM tell my company?
An RFM analysis will tell you which particular customers to focus your marketing campaigns on.
What if my data is not clean?
Every dataset is messy, different departments keep it in different forms, and almost always needs to be cleaned. Fortunately, data can be aggregated, formatted, cleaned, data quality verified, described and explored. All data analytics depend on clean data.
Why should I survey my customers?
To assess their satisfaction and to find unfulfilled needs they may have with your product or service offering.
What are some of the key performance metrics that should be focused on?
There are at least 8 key performance indicators that are essential to any business:
- New customers acquired and the number of sales per customer.
- The demographics (or profiles) of your repeat customers, of your new customers, and your prospects.
- The propensity of prospects to become customers.
- Conversion rate or percent of prospects that became customers.
- Customer satisfaction and would they recommend your product or service to a friend or colleague (1=never recommend to 10=highly recommend).
- Attrition of customers, who they are, and time since last purchase.
- Net revenue (sale price – your cost), overall and by customer segment, by new or repeat customer.
- Life time value of customer or the net revenue of a customer over the life of being a customer.
What is the customer intelligence process at Statistics Solutions?
There are basically 5 steps: (1) meet with the CEO, CFO or CMO to understand your strategic objectives and marketing initiatives, (2) create a database consisting of your existing customers and conduct different analyses based on your objectives,(3) let the analyses inform us about which existing customers and prospects to target, (4) either your CMO takes the customer intelligence or we can provide a marketing campaign, and (5) tie the results of the marketing campaign to key performance indicators.