While businesses may believe their use of analytics, in the form of data and statistical analysis, is working to enhance their customers’ experiences, new research suggests otherwise.
Conducted by Accenture, the research concludes that 55 percent of businesses believe their methods for targeting customers and providing relevant experiences are either “ideal” or “very good,” but only 21 percent of consumers believe the companies with which they do business are good at providing a tailored experience.
The study looked at businesses in a wide variety of sectors, including financial services, communications, consumer goods and retail, as well as energy and utility companies. Businesses use their analytics for a number of purposes, including how to market to customers through targeted campaigns , how to determine the effectiveness of their customer-service practices and to see if sales are matching up with price points.
However, many businesses are not using their analytics properly. The research showed that more than 50 percent of businesses don’t use analytics to help them target, service or interact with customers, while 23 percent say they don’t use data at all and instead base their decisions on personal experiences.
Julio Hernandez, global lead for customer analytics at Accenture, said businesses can use analytics to build a deeper understanding of what products and services customers really value and what they are willing to pay for them.
“Our research findings indicate an enormous opportunity for (businesses ) to extend this capability to create stronger and more relevant value propositions,” Hernandez told BusinessNewsDaily. “Those that succeed will be able to limit churn, drive future growth and make a rapid and meaningful impact on the bottom line.”
In order to be successful, Hernandez believes businesses need to find the right balance, relying on both data and assumptions based on gut feelings to make key decisions.
“You should not just run your business on intuition,” Hernandez said. “You should also base it on facts.”
Small businesses, he said, have a better opportunity than large corporations to strike that balance, because they should, in theory, be closer to their customers.
“You can get that voice of the customer firsthand,” Hernandez said.
Based on the research, Hernandez believes there are several areas in which businesses could be using analytics to give them a competitive advantage , including pricing, product development and delivery.
The research shows that 86 percent of respondents are not using analytics for pricing help, and another 77 percent report not using it to assist with product and service delivery.
In addition, the research findings, Hernandez said, suggest that most businesses analyze their customers according to their value to the company, rather than according to their customers’ unique needs.
According to the survey, the most commonly used measurement to segment customers tends to be company-focused, such as profit per customer, lifetime value and how much of a customer's total spending occurs with the company.
Meanwhile, indicators of customer requirements, such as customer needs and behaviors, service levels received and psychographics, often are used least.
The research, based on 800 telephone interviews with directors and senior managers at blue chip organizations, was conducted in March across the United States, Canada, Brazil, China, Germany, Italy, Japan, Spain, United Kingdom and Ireland.
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