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By Paul Alexander, Chief Executive Officer, Beyond Analysis

In today’s tough economic environment customers are becoming more unwilling to spend. A merchant who does not seek to understand their customers via their transaction and customer data is like a financier who lacks the competency to monitor cash flow and credit performance.

Without question, the financial services community had – has – access to the information they require to make informed decisions on risk. That said, the overriding sense we get from our current economic situation is that calculated risk was compromised in favour of speed in order to make a fast buck. When there’s a deal on the table and a number of people pitching for the business it is a natural human reaction to want to do the deal first – and ‘win’. And it’s a hard lesson that just like eBay, you don’t ‘win’ anything, you get what you pay for.

To win custom in these tough economic times merchants are responding fast with price-driven initiatives to get customers through the door. These initiatives are mainly designed to stop the customers from shopping with the competition and to drive customer traffic. Similar to the financial services community, it’s about doing the deal first. But are they the right customers? Is it the right custom?

In 2008 we worked with a client who had a two million-customer base. They measured success by the number of people coming through the door. When we analysed their data we discovered that 91% of their total revenue was coming from 400 customers. That is, there were 1,999,600 customers who were either costing the business more money than they were making, or had not been offered something of relevance to either get them back through the door one more time or buy at least one more thing.

It is naïve to suggest that price will be the only determinant of customer behaviour. When people have less money to spend, yes, price is important, but it is every bit as important that they are buying something which will last the distance, so that the money they have worked harder to earn hasn’t been wasted. Woolworths in the UK haven’t collapsed because their prices were not good, they were. One of the main reasons they have collapsed is because they couldn’t find a balance between price and quality of either the product or the customer experience. Conversely, M&S usually fare well in times of economic hardship because quality has previously been delivered at a price that is fair. As M&S have recently rushed headlong into discounting to drive store traffic, we have to hope that this is because they want customers to see that they have quality products at the right price for people facing economic hardship.

Like Financiers, Merchants are sitting on a wealth of data to help them make more informed decisions. Merchants who choose to ignore the information at their fingertips are the same as the Financiers who lacked the competency to monitor their Collateralised Debt Obligations (CDO's).

Often we are told that there isn’t enough time to do the analysis. Sadly it is often the case that so-called competitors of Beyond Analysis are anything other than nimble:

A recent client had been sold a ‘Segmentation Suite’ – actually five segmentations rolled into one - to better understand their customers. Work started in August last year and is due to deliver in February / March. The economic world and the buying behaviour of the client’s customers has now changed, and indeed by the time the segmentation is delivered it will require a refresh. What is worse is that one of the five segmentations would have given them all that was needed to begin to respond to customer needs. This could have been delivered in a matter of weeks.

For Insight to truly be of use it has to be connected to the immediate short-term needs of the business and to the ability of the Merchant to affect change as a result of the new knowledge. Adding transaction data to customer research connects the short term with the foresight required for long-range planning and strategy development by the Board and the CEO. Insight will help inform the objective setting, but most importantly the Insight must be delivered in a way which allows the business to respond ‘at pace’. Previously it took too long to extract the data from an Enterprise Data Warehouse (EDW) if one existed, or too long to analyse the data. However, we are now in an age of technologies that can enable Insight at breakneck speed, and we have people who know how to enable the technology to do the job brilliantly.

The Merchants who learn to adapt themselves based on delivery of fast Insight will be the most successful. Analysis of Customer Data has typically been the domain of Marketing as it can adapt relatively quickly to changing market dynamics, however it is not where the most substantial impact can be seen in the business. The biggest impact will be experienced by those businesses that ensure customers see:

• The right range of products;
• At a price which fairly reflects the quality;
• In the right locations in appropriately sized and laid-out stores.

All of the above in balance is the stretch goal. Some of them are not easily changed. Culture, infrastructure, etcetera, all prevent them from happening.

If there is one lesson we can all learn from our current economic situation, it is that we must reassess who we listen to. It is not the analysts in Financial Services organisations who can tell you what you need to know about your business to succeed, it is your customers. The transaction and customer data you now hold allows you to listen to them en masse and deliver their every need.

We must not miss the opportunity.

-ENDS-

About Beyond Analysis

Beyond Analysis is a leading customer insight and strategy provider that has developed a pragmatic and flexible approach to deploying data to drive competitive advantage through more informed decision making across business operations.

Bringing hands-on experience of developing world class customer insight capabilities for some of the world’s largest consumer brands we can quickly and effectively identify the levers that will harness the power of data.

We are based in London and Sydney.
Web: www.beyondanalysis.net

About the Author:

Paul Alexander, Chief Executive Officer

Paul has extensive experience in media and advertising and is a passionate exponent of the power of data to transform a business. He takes a holistic view of business to provide our clients with the tools they need to achieve their strategic goals.

Paul’s most recent role was Global Head of Consumer Markets for dunnhumby, but he has also held senior roles at TBWA\ and Tequila, M&C Saatchi and Walker Media.

For further information, please contact:

Melanie Harries
press@beyondanalysis.net
t. +44 (0)208 3928252/+44 (0)7976 304437

This press release was distributed by ResponseSource Press Release Wire on behalf of Beyond Analysis Ltd in the following categories: Consumer Technology, Business & Finance, Media & Marketing, Retail & Fashion, Computing & Telecoms, for more information visit https://pressreleasewire.responsesource.com/about.