Customer Analytics is about analysing customer data to better understand your customer behaviour, needs & wants. But who exactly are your customers. Are customers who last bought 5 years ago, still your customer? Organisations need to firstly define, what are they talking about, when they talk about ‘customer’ so that the whole organisation is using the same definition and there is consistency within the organisation.
It is also very important for organisations to understand who their profitable customers are. As the rule of thumb ‘20% of customers bring in 80% of your revenue’. So the starting point in customer analytics is to identify who are your profitable & valuable customers. It is not just looking at which customers have spent the most with you, as some customers have been with the organisation for a longer period than others. It’s about identifying for each customer, when last did they buy, how often do they buy, how much have they spent with you in a specified period of time? Based on these results, each customer is scored and the top 20% or so will clearly be identified & confirmed as the organisations profitable & valuable customers.
Do you know your organisations definition of a ‘Customer’?
Will all the employees of your organisation, if asked who are your organisations customers, compute the same answer?
Do you know who are your organisations top 10 profitable & valuable customers?
It’s time to know your customers….this is just the start!