If you don’t understand your customers, then it will be very unlikely that you will be able to anticipate or predict their needs.
Companies who want to deploy the latest data science methodologies to accelerate their growth and outpace their competition typically find that they can not make the output of any machine learning or artificial intelligence model actionable.
The main reason for this has been that they don’t have an accurate understanding of what their customers currently do. From what products they purchase, which is very different to understanding the most popular products, to when they come, how they behave and what you can infer is their intention.
When you start the journey to understand your customers, there is so much you can do with that analysis that you don’t need to spend an inordinate amount of time and resources in deploying the latest machine learning algorithms or AI applications, but rather focus on the value that can be derived from those insights.
At Be Data Solutions, we help our clients on this journey and we find that once we help them understand their customers better they can achieve so much. This includes,
Tailored Solutions
When you deeply understand your customers, you can tailor your products or services to meet their specific needs and desires. This ensures that what you offer is not just functional but also resonates with them on a personal level, increasing the likelihood of satisfaction and loyalty. For one of our clients we helped them understand that there was a segment of customers who only came to their department store for cosmetics. This then enabled the merchandising team to curate cosmetic product offerings which resonated with that segment.
Effective Communication
Knowing your customers enables you to communicate with them effectively. You can use language, tone, and channels that resonate with them, making your messages more compelling and persuasive. This can lead to better engagement and conversion rates. We experimented with a formal and informal tone when addressing different customers for one of our clients and found a significant uplift in click through rates when using the term “Dear” instead of “Hi”.
Customer Satisfaction
By understanding your customers’ pain points, preferences, and expectations, you can provide better customer service. This includes addressing their concerns promptly, offering relevant solutions, and providing a seamless experience throughout their interaction with your brand. Working with a customer services team, we empowered them with customer insights, so when a customer called, they knew what product the customer had previously purchased and the likelihood of the call being a complaint or query, This led to customers services team being informed if there was a high likelihood that the customers complaint was valid and acted accordingly.
Innovation
Customer insights can spark innovation within your organisation. By understanding their evolving needs and challenges, you can identify opportunities for new products, features, or services that address unmet needs or improve upon existing solutions. Working with a department store, we found that a very small number of customers purchased items in bulk when they were discounted. This allowed the store managers to identify this group as resellers and worked with them to maximise profitability on discounted and discontinued product lines.
Competitive Advantage
In today’s competitive landscape, understanding your customers can be a significant differentiator. It allows you to stay ahead of competitors by offering unique value propositions, building stronger relationships, and anticipating market trends. Identifying early adopters and how their purchasing and transacting behaviours change over time, allowed our client to determine if their products and services were still relevant to their target customers base.
Customer Retention
Satisfied customers are more likely to remain loyal to your brand and make repeat purchases. By understanding their preferences and providing exceptional experiences, you can increase customer retention rates and reduce churn. By building a churn model, we were able to reduce attrition by over 30% for a customer loyalty programme for one of our clients, increasing sales and reducing the cost of re-acquisition.
Brand Advocacy
Happy customers are also more likely to become advocates for your brand, recommending your products or services to others. This word-of-mouth marketing can be incredibly powerful in driving new business and expanding your customer base. Analysing social media posts, we found that highly engaged fans of a CPG brand rarely consumed the product, but were advocates. Using these insights our client worked with those fans to amplify their social media activities, understanding they were not high frequency consumers of the product..
In essence, understanding your customers is the foundation upon which successful businesses are built. It enables you to create meaningful connections, deliver value, and ultimately drive sustainable growth.
To know more about how you can understand your customers better, contact us at hello@bedatasolutions.com, and start your data journey with us.
