Turning Data Into Actionable Information
Unless you are still handwriting orders and invoices, your company probably has a ton of data on your customers just waiting for someone to uncover. Since the cost of storage (hard drives, NAS devices, etc.) has plummeted to all-time lows, we all seem to be storing more and more stuff. If you have a blog, Twitter account, LinkedIn company page or a Facebook page you are or should be collecting data from people that interact with you through those social media venues.
If you are NOT deciphering all of this data and making some sense of it, you are missing out on some of the most robust information available about your customers. If you were to get a behind the scenes look at what Grainger and soon, AmazonSupply are doing with all of the data they are collecting, it would make your head spin. Most of you are probably thinking, “Those guys are huge and have unlimited budget for this kind of analysis, we can’t do what they are doing”. You would be right on all counts, except the most important one…YOU CAN do something meaningful with the data that you collect. It will take some effort, but the rewards will be well worth it.
Some of you may have heard of a relatively new term called, “Big Data”. It refers to the massive amounts of data collected and the data collected on the data. Sounds crazy, but true. To give you an idea of what we are talking about, Walmart captures over 1 million transactions an hour, an average of 294 billion e-mails are sent every day, and Facebook users create an average of 90 new pieces of content every month. There are about 750 million Facebook users. It is not just the volume of new data that is create, but also the incredible speed at which it is created. Rest assured, the amount and speed of collecting data will not slow in the foreseeable future. But what can a business your size do? You don’t have a department of data analysts. You don’t have sophisticated software algorithms to help you figure out this ever-increasing mountain of data. You have enough on your plate to just keep the doors open everyday. Harvard Business Review states that “…the most important question regarding Big Data at almost any company is: How much are your customers really worth?” Don’t disregard this advice, because if your competitors are figuring this out, it won’t be long before they are calling your customers their customers.
We have some ideas that we think will help you leverage the data that you have and make some great tasting lemonade out of it. There are three things that you should do.
1) Develop a meaningful short and long-term goal or goals regarding what you would like to do with your data
2) Develop a Customer Lifetime Value (CLV) metric to help measure the customer’s value beyond their own sales and profits to your company
3) Develop additional value that you can provide your customers, especially your VIP customers
Let’s take a look at some potential goals that you may want to consider. First, your goals should be focused on the customer and the value that they bring to you and the value you provide to them. With that said, one goal to consider would be to improve your anticipating (forecasting) their needs. While we all know that customers can surprise us with new requirements, using the 80/20 rule, most of the time we should be prepared for what they need before they need it. Another goal to think about is how you can get connected with other people that they may know that can also use your products. This used to be called asking for referral, but in today’s connected world, you should be able to suggest who they should introduce you to based on key criteria. Some of the big guys out there are creating goals around expanding the depth and breadth of products that a single customer can buy from you. The Big Data out there can help you better understand your customer’s buying habits. This is not just what they buy from you, but what they buy from you and all of your competitors combined.
Another metric…really? Yes and a very important one at that. As the Harvard Business Review author, Bill Lee said, “The most forward thinking companies are adopting some form of Customer Lifetime Value (CLV) to assess the value of customers to their bottom lines.” But there is more that you need to know about your customers. Are they blogging about you? Are they tweeting about you? Are they influencing others to buy from you? By properly analyzing Big Data and talking with your top customers, you should be able to uncover this hidden gem of information. Imagine what you could do with the knowledge of which customers are promoting your company to others the most. The data is out there and there are business intelligence (BI) tools that can help you find it. Check out www.qlikview.com as one technology that can bring you knowledge from outside your four walls of data.
Additional value: connecting them to people that can help their business. Treating them special at events that you can host. Know what direction they are headed and help them get there. Here is an example that comes from the software industry. Salesforce.com knows who their best customers are by name. these are the people that are evangelizing their company. They measure what these “MVP customers” are doing and reward them with front row reserved seats at their annual conference, Dreamforce. They keep them updated with valuable industry information that their MVPs can use as they see fit.
What special value can you provide your MVPs? How can you excite them about becoming evangelists for your business?
Organizations of all shapes and sizes need to turn data into actionable information to remain relevant in this information rich world. Set clear goals, determine each of your customer’s CLV, and gain value from and add value to your key customers. You are not too small to take your data and turn it into actionable information that will grow your customer’s loyalty and increase your profits.