Posted by Indusa Admin on February 16, 2016 8:34 am
According to the Harvard Business Review, “Big Data threatens to create a deep divide between the have-datas and the have-no-datas, with big corporations gaining advantage by crunching the numbers and small firms left to stumble in the dark.” Collecting and having access to customer data is oftentimes seen as a costly expenditure that small to medium sized businesses forego in favor of cutting costs; new research, however, has begun to demonstrate just how powerful customer analytics can be – especially for SMBs.
The Benefits of Data
A study by the McKinsey Global Institute indicated that Big Data has the potential to increase net retailer margins by 60%. While investing in big data firms and services may be out of reach for some SMBs, there is a simpler solution: customer relationship management (CRM) software. Many contemporary CRM systems have integrated analytical and business intelligence capabilities to allow retailers access to their customer data. If retailers take advantage of implementing a loyalty program as well, their data and analytical capabilities will also be increased.
According to TechnologyAdvice, “CRM data and basic analytics can distinguish between VIP and casual customers, helping you make important decisions about discounts, pricing levels, and rewards.” Subsequently, this increase in decision making capabilities can help your organization to make smarter choices, ultimately leading to improved efficiency and increased revenue. Effectively using analytics can also increase the efficiency of managing several areas in retail, including:
- Customer Segmentation
- Customer Acquisition
- Product Recommendations and Remarketing
- Customer Retention and Loyalty Programs
- Pricing Strategy
- Supply Chain and Inventory Management
The Next Steps
If you already have a CRM implemented at your organization, you’re on the right track towards gaining insight into your customers. If you don’t have an existing CRM implementation already in place, then that’s the first step you’ll need to accomplish. Most contemporary CRM systems will have some sort of customer tracking or analytical capabilities; however, make sure the individual specifications of whichever software you choose will allow you to meet your business goals.
You’ll also need to evaluate the state of current personnel. Is your IT team properly equipped to handle a CRM implementation? Are you planning on implementing, or do you already have a loyalty program? Do you have a dedicated staff member to handle analyzing customer data? These are questions you need to consider while undertaking a project such as this.
Leadership will also have to carefully evaluate their goals for customer analytics. Do you want to increase customer retention? Increase average spending? Or use data to bolster your marketing efforts? These are all realistic goals that retailers might consider when choosing to start seriously analyzing their customer data. Having specific, achievable goals in mind will help you realize your success and shortcomings after implementation. This can provide valuable insights into how to improve your business and strategies.
While the benefits of data and analytics have been lauded often and loudly, the means of achieving these successes have oftentimes seemed out of reach for SMBs. While it is a significant investment, undertaking the analysis of your customer data is an extremely beneficial pursuit – especially for retailers. By gaining insight into your customer base, retailers like you will be able to improve operational competitiveness, enhance marketing and sales efforts, and bolster overall profits.
About the Author – Sarah Van Wambeke
Sarah is an avid writer and digital media enthusiast. Here at Indusa, she primarily focuses on content creation and social media management.