Analytics "over-indexed" on meeting the needs of the organisation versus the customer

Analytics "over-indexed" on meeting the needs of the organisation versus the customer

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."

Comments

Having worked on the supply side of the business & consumer insights world for some years I can do nothing but agree with Accenture's findings.

In the UK, whilst no sector completely escapes censure, it seems particularly true of the consumer banking industry where institutions, some still owned or part owned by the taxpayer, continue to plough ahead with a totally product driven approach. The prevalent attitude seems to be "we have got these products now target some likely consumers to sell them to"

At no point in my recent discussions within this industry has anyone suggested they were interested in the importance of using analytics as part of a tool set to rebuild relationships and trust with their consumer customers. Worse still, at a personal level, it is very clear that my bank, with whom I have had a twenty year relationship, have not the foggiest idea what makes me tick, to the point where I now regard the with irritation and only use them as a convenient conduit for my salary cheque and nothing more!

On the positive side, it is becoming clear that some organisations have become early adopters of a new wave of activity around building meaningful and brand supporting relationships with consumers, rather than relying on retailers to act as sole intermediaries. They at least, have made the connection between trying to understand and build a sense of trust with the end users of their products and the overall impact on their brand value.

Alas these are all too few and there is little evidence to suggest a widespread change of heart.  

 This article highlights a major problem for many firms that use database marketing – a point that our own research makes emphatically: too many companies fail to make use of the customer data they have to hand and, as a consequence, are sending out irrelevant communications that not only annoy and alienate consumers, but lead many to take their business elsewhere.

  Transactis’ 2010 Data Wastage report showed that many firms are simply not using the consumer data they hold to properly target and tailor their communications. Nearly two-thirds of the consumers surveyed said companies had sent them offers for products they would never buy even though they had previously given personal details and preferences to these firms.  This year’s report, Data Wastage: the Real Impact, looked at how this failure to use customer data to guide marketing approaches to consumers was really affecting firms. Nearly 80% of the 2,000 UK consumers surveyed said they would likely shift their business to a competitor if a company they had already given personal information to kept sending them irrelevant offers and communications.   Our research clearly demonstrates that consumers now don’t just want, but expect, the companies they deal with to provide offers and communications that are relevant to them. This means that consumers require firms to know their preferences in terms of the products and services they want, anticipate their real needs, take note of the channels they want communications to come through, and identify the right time to send messages sent to them. Those organisations that do not act on the data they already have do so at their peril.   To ensure that they are taking appropriate action, firms need to hold and action a ‘single customer view’ – where all the information on a client is pulled together, so that it can then be analysed to gain insight into that consumer’s habits, behaviour and preferences. This is an essential step towards ensuring that customer communications are better targeted, properly personalised and well-received by the recipients.  A copy of the 2011 Data Wastage report can be downloaded from www.transactis.co.uk/blog/category/white-papers-research/

 

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