Successful executives know that happy customers have a significant positive impact on a business' bottom line, yet many fail to effectively nurture, cultivate and service their clients. As a consequence, a significant number of firms fail to build the long-term, loyal relationships that drive profitability.
A recent survey by the Chief Marketing Officer (CMO) Council reveals the hard numbers on customer retention and its impact on profit. The survey found that a 2% increase in customer retention is equivalent to a 10% cut to business costs in terms of its impact on profit. It also revealed that loyal customers are 15 times more likely to increase spend with an organisation than casual customers.
These figures make it resoundingly clear that businesses cannot ignore the need to identify their key customers and ensure they have the processes in place to keep them coming back. However the CMO survey also reveals that the vast majority of executives don't have a solid understanding of their client base.
Just 6% of senior marketing executives have excellent knowledge of their customers' demographic, behavioural, psychographic and transactional data - less than half have formal programs to integrate and organise their information.
For many firms the challenge of understanding their customers requires a solid focus on effectively organising and understanding client data. This means bringing the information together in a usable way so that you have a single, current view of your customers that can be converted into actionable insight. Only once you understand this data and have it in an actionable format can you to achieve solid marketing results for your business.
You can reach this goal by following these steps:
1. Cleanse your customer and prospect information to ensure it is actionable. There are three critical elements to consider:
- Accuracy: Is your information correct? Are you capturing the same data consistently on your customers across multiple systems?
- Relevance: Can your data be used in a way that helps you better understand your customers?
- Completeness: Do you have the necessary data elements for all your customers?
2. Enrich your information with additional third-party data. Think carefully about the elements you need and be creative. Corporate family structures for example, provide valuable insights into up-sell and cross-sell opportunities that would not be identified without a clear understanding of company structure and relationships.
Business information that can enrich your existing records includes Standard Industrial Classification (SIC) codes, sales volumes, number of employees, net worth, executive names, and predictive scores, among hundreds of other variables.
3. Manage your insight by synchronising it throughout your enterprise and keeping it current.
The critical elements for effective management are:
- A single repository to house the cleansed and enriched data
- An integration software system or middleware to synchronise data between that repository and the original source systems (plus other databases and applications around the enterprise)
- A continuous data governance process that will ensure the information is maintained to the highest standard. This information is valuable commercial insight and it needs to be managed appropriately to ensure its ongoing business benefit
Comprehensive, current and actionable data is the key to success in any environment. By investing in customer relationship management and business intelligence you will give your executives the insight they need to establish and retain the customers that are critical to your profitability and ongoing success.
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