Understanding the evolving customer & mapping them to products or services
We all know that customer is the king. But which customer is the king? Without right customer segmentation and differentiation this king customer may turn out to be an liability.
Segmentation is not only a job of marketing and sales or finance or SCM but also dependent on IT. End of the day these departments are consumers of the databank provided by the IT. As a CIO you can prevent your enterprise from losing the customers with making the right customer stand out. The selection of right software for business users becomes really important. The sooner you can start building up the customer data bank with right customer profiling, the reports related to customers will deliver benefits.
This statistics may be right or wrong but all of us do believe that our enterprise is losing customers due to lack of right customer understanding.
Relationship were a prime importance with the customers previously only in B2B companies hence they tracked customer. Now even we have service, retail, banks and airline tracking customers giving them differentiating benefits by segmenting customer with related royalty programs or privilege accounts.
Blurred to focus can happen only with segmentation and differentiation of customers. Getting focused segmentation reports related to customer is getting virtually impossible in current business scenario where in product lines are continuously increasing, geography is ever expanding, transaction data exponentially increasing. With BI software it can empower with powerful Arjun’s eyesight for making the right customer segment stand out with differentiation.
Why blurred to focused?
Reduce cost of marketing, better matching of product/ services to customers, focus on best customers, selling more of your current products in existing markets, selling new products in existing markets, selling new-existing products in new markets
Companies spend 19% - 21% of revenue on average for sales cost in B2B segment and 6%-8% on marketing. In 2000-2006, 54% reduced their marketing budgets; by 2007, marketing budget increase continues its comeback.
Demand creation dominates for marketing, distribution of programs and personnel. Enterprise sales cycles have increased by an average of 22%. Greater investment will continue to be made to increase direct and indirect channel productivity.
The reports needed for your customer segmentation and differentiation is highly dependent on the business pain points, challenges, hurdles, and issues you are trying to address. The following are a few examples of what may be driving your need to implement BI solutions for customer profiling:
Your customers are unhappy with the way the products/services are delivered or they feel they are overcharged when billed by your sales agent, field sales or service representatives. Your customer facing people are not aware of the profile and personalized needs of the customer.
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Your customer facing activities are not based on customer data or customer-centric and therefore are ineffective in achieving your company objectives
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Your partners feel that they don’t have the information they need to truly act as an extension of your organization
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Your call-center operations cost 200% more than the industry average
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Your revenue per sales representative is 50% lower than the industry average
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Your marketing, sales, and service functions don’t share a common view of the customer
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Your market share is being eroded by entry of new and more nimble competitors
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New legalization has opened new markets to your business
1KEY BI Simple Solutions Solving Large Issues of your company. With all this graphical representations business users can understand the directions in which the business is moving. We have four reports one with Transport wise customer Order bifurcations in pie chart, the second is column chart industry wise segmentation of customer sale value, sales qty and freight cost related to same. The third one country wise an stack column chart with sales value, qty and freight. The fourth one is doughnut chart with country wise order split. All these reports are segmentation based on the customer databank.
Far too often, the lack of reliable, readily available, current information on customer opens the door to chaos, confusion or sometime even may lead to fraud. It’s much easier for the unscrupulous persons for opinion based spread of false information and to manipulate with wrong customer with a hand in a glove when accurate profile of information about the customer is scarce. Customer profiling with 1KEY BI can help in risk mitigations and can track patterns.
Segmentation with 1KEY BI software helps in giving business
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Sustainable competitive advantage: rival businesses might easily match your prices or products, but will find it harder to infuse the business with an outstanding Customer understanding due to segmentation
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To be profitable: good customer understanding frees the company from the downward spiral of competing on price because people will pay more for great understanding and knowledge
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A productive, stress-free work environment: great customer understanding results in great service means happier customers, happier team members and less conflict at work
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Cost-efficiency: satisfying customers first time means less money is wasted taking complaints and correcting mistakes – particularly important in public sector organizations where there is no obvious profit to track, but there can be a lot of hidden wastage
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A good reputation: important for attracting future customers and investors, and essential for the credibility of business.
Posted on March 12th, 2008 by Sanjay Mehta
Filed under: View Points & Perspective
Good post.