Because organisations use analytics tools to understand a customer’s value to them rather than their value to customers, a mere one in five consumers believe they are treated in a personalised or even relevant way.
As a result, a huge two out of three chose to change service providers over the last year, with the average cross-industry defection rate standing at 64%.
Despite this situation, a survey of 800 directors and senior managers in 10 industrialised nations including the UK and US, which was undertaken by management consultancy Accenture, revealed that 55% believed their methods for segmenting customer and providing them with relevant experiences were either ‘ideal’ or ‘very good’.
More than half did not use analytics software to target, service or interact with customer, however, even though 22% considered that analysing data and facts was ‘very important’. About 23% felt that personal experience was just as valuable.
But Julio Hernandez, Accenture’s global lead for customer analytics, warned that, although 10 years ago, organisations could "get away with" relying on intuition when making decisions about how to engage with customers, this was no longer the case in a wired, interconnected world.
"Descriptive and predictive analytics enable organisations to draw fact-based conclusions about what customers are actually doing and what they are most likely to do and need. Whether in product features, delivery or price, organisations are leaving money on the table by not applying the power of analytics to these decisions," he said.
Even among those organisations that were actively employing analytics tools to assess their marketing, sales and service activities, most still only used them selectively, with some 86% not including pricing, product and service delivery (77%) or product development (59%) in the mix.
On the customer segmentation side of the equation, meanwhile, most of the metrics employed were focused on trying to understand the customer’s value to the organisation rather than the other way around. Some 41% of respondents focused on profit per customer, 27% on lifetime value and 24% on share of wallet rather than on measures such as service levels received and psychographics.
But Hernandez said: "This leads to a customer experience that is over-indexed on meeting the needs of the organisation versus the customer. Organisations will benefit from a more balanced approach to using analytics, one that takes into account what’s sustainable for the business as well as what’s relevant to the customer."