Prithvijit Roy, CEO and Co-founder at BRIDGEi2i, and Maruti Peri, VP (Americas region) at BRIDGEi2i, delivered a compelling presentation at the Customer Analytics Summit. They spoke about the use of data analytics for enhancing customer lifetime value. They also explained how analytical algorithms and technology solutions can work together to generate actionable insights pertaining to customer experience management, marketing strategies, and more.
Read the full transcript below.
It’s all about the customer!
Customer-centricity is something that all businesses care about today. It is about providing positive customer experience before and after the sales to drive repeat business, customer loyalty, and profits. But is it only about marketing and customer relationship management? Let’s try to think about it.
Customer-centricity should be a factor across business functions
No doubt marketing has a significant influence on customer-centricity, but it is not only the operation that drives customer-centricity. Sales as a function is also driving customer-centricity. It is now thinking about personalization and customer needs equally.
Similarly, when you go to the operations side of the business, it is all about customer need. The customer support works relentlessly to know how to build better customer support for the customers. They want to ensure the right placement of resources to drive the support required by the business as well as the customers. Even the finance department focuses on giving the best pricing to its customers as they now know that without wearing the customer’s hat, businesses can’t do feature vs. price trade-offs.
When you drill down more into understanding your customers, you will realize that the vastness of social media and customer responses help you design products and embed features that customers are looking at. It is about having a cross-functional view when all the functions come together and build a customer-centric approach rather than product-centric approach.
Data analytics drives customer-centricity
Along the same vein, the metrics are also changing, from product revenue to customer profitability, as businesses are adopting new parameters of measurement to drive customer-centricity. Earlier it was only market research that helped us understand our customers.
But today we see our customers operating on the web and sharing their experiences and feedback. We are now aware of their transaction behavior and also have social information about our competitors’ customers. And that’s where data and analytics play an essential role in driving customer-centricity. Data analytics helps pull together data from various space and platforms and provide a singular view of the customers.
Understanding the customer analytics journey
Every business goes through this journey. The good news is that the majority of companies already have the data they need. It is crucial to build information nuggets and then pull a 360-degree view of the customer journey and touch points. Based on the insights gathered from the customer’s view, it is important to emphasize on personalization and predict customer journeys effectively. With customer analytics, we can understand how to drive revenue for the customers and intervene through targeted marketing.
Personalization through segmentation
With a lot of customer information available already with the firms, businesses have been doing some personalization through customer segmentation. By breaking down the customers into homogenous groups, businesses are creating different strategies for them from the marketing and CRM standpoint.
But today, the whole concept of segmentation is changing owing to the vastness of information coming from customers’ social media channels. Now, there is a need to broaden the customer segments. Businesses should now think about long-term customer value and then design marketing interventions that can build customer profitability and increase the wallet share. All of these can happen in real time. It’s about analyzing customers’ behavior on the web and then deciding what your customers are going to buy.
Let’s talk about three use cases to help you understand the role of customer analytics in the changing business scenario.
What can you do with the help of personalization?
Personalization is taking what you know about a customer and using it to make a unique experience tailored to that customer. It helps build customer knowledge, develop actionable insights, and operationalize impact. Let’s understand what personalization looks like in B2B and B2B2C companies.
How does personalization work?
A global provider of IT services was facing a decline in customer contract revenues. When they were trying to renew the contracts, the premiums and margins were going down. Though the company was spending a lot of money to help customer service do better, the customers didn’t stay long with them. The company wanted to measure the right metrics and improve performance. That’s when they approached us.
BRIDGEi2i started with the survey, customer support, and social data, which was already present with the company. They wanted us to look at the social data and get a perspective of what other industries were doing to improve customer experience. So, we collated the data together and used a sophisticated text mining technique to come up with a review process.
We came up with a 360-degree customer data view and identified the drivers of customer experience from customer interactions. We used text mining to come up with a theme and matched it with other industries. We gained a lot of insights. One of them was, the customers of the client were not happy with the way escalation was handled, which led to attrition. This reason of attrition wasn’t known to our client.
So now, the client has started incorporating different questions that cover escalations during customer surveys. As a result, incidence rate dropped to 10%, the adoption rate of their products and services increased by 10%, and the overall customer satisfaction improved by 14% based on the new parameters of evaluation.
Customer analytics will help you grow your customer base
A global technology B2C e-commerce site was facing the following challenges:
- Repeat purchase rate of customers declination
- Eroding margin of discount-seeking customers
- Acquisition quality was diluting and lowering
The company knew who their customers were but wanted to know who their valuable customers will be 2-3 years later so that they could invest in them and design loyalty programs by moving away from broad discounting. To calculate the lifetime value of the customers, we typically looked at data across demographics, past purchases, typical promotions, marketing costs, frequency of purchases, and transactions.
Customer analytics can help redesign your marketing strategy
We then designed a modeling approach with statistical models to predict high-value segments and non-transactors and capture pathways to provide value to different customers. We did an advanced analysis with statistical models, and we informed them that 50% of the customers might not return.
We segmented the customers and predicted what each customer would buy. Because of these insights, they were able to redesign the whole marketing strategy. The entire marketing team has adopted this model now, and we will see the results very soon.
Customer analytics provides a significant boost to your sales
A CPG giant in Asia was facing the following challenges:
- The company had no information about the end-customers since they have many channels they sell through
- They were witnessing high-end store attrition
The company wanted to increase its store revenue by managing more shelf space and keeping abreast with the market as well as the competitors. To understand the challenges, we analyzed the client’s store-level sales data, store panel data, and the competitors’ selling data.
We segmented the client’s customers and focused on their wallet share and buying patterns. We also looked at the best-performing stores and identified them based on purchase patterns. We built recommendation rules that defined purchase behavior and cross-sells. We had all kinds of information and knew what exactly the CPG industry needs to stock to perform well. Customers never returned without buying. It drove the sales, and there was a revenue uplift of 10%. Brand loyalty also started building up.
Analytics creates wins for both the customer and the business
While every business is different, there are some common benefits of customer-centricity, which apply to almost every organization. Businesses that respond to customer-centricity will be able to minimize the cost of customer acquisition and provide better and personalized experience for the customers.
When your business is consistently customer-centric and engaging customers, there’s a higher chance that they’ll stay and become loyal.