It’s an adage as old as capitalism: to know the customer, one must become the customer. It’s imperative that companies keep up with customer sentiment in order to remain one step ahead of any complaints or concerns that might arise. Business analytics, however, enable organizations to collect customer feedback in an effort to provide structure amongst the unstructured data that pours in continuously. But when there’s so much chatter to weed through and decipher, it’s not always easy to decide what your brand’s next steps should be.
That’s why customer data plays an important role.
Business Analytics (BA), of course, refers to the data-driven practices, skills, tools, and techniques for continually analyzing business performance and exploring new ways of gaining a competitive advantage. BA provides actionable insight relative to decision makers, recommenders, and influencers according to loyalty and satisfaction scores. BA also makes it possible to combine satisfaction and operational data to gain further insight into purchase behavior by nature of the job or role within a customer organization.
Yet, despite countless years of data talk, many organizations have yet to master the analytics walk.
In an article that preceded his groundbreaking 2007 book, “Competing on Analytics: The New Science of Winning,” Tom Davenport explored the importance of analytics when describing the future of business. More than a decade has passed since its publication, but Davenport’s wise words still ring true.
“Organizations are competing on analytics not just because they can—business today is awash in data and data crunchers—but also because they should,” the Babson College professor of Information Technology and Management, and independent senior advisor for Deloitte Analytics, wrote for Harvard Business Review. “At a time when firms in many industries offer similar products and use comparable technologies, business processes are among the last remaining points of differentiation. Aand analytics competitors wring every last drop of value from those processes. So, like other companies, they know what products their customers want, but they also know what prices those customers will pay, how many items each will buy in a lifetime, and what triggers will make people buy more.”
Modern companies now recognize, without a doubt, that business analytics can differentiate them from the competition, but many are still behind when it comes to bringing the data to action. They’ve instituted the technology necessary to collect customer information, but they have yet to establish processes for parsing the data and using it to fine-tune operations. Instead of sitting on this data and allowing it to go to waste, they must develop a team that can transform said information into actionable insight.
Davenport also noted that the companywide embrace of analytics requires changes in culture, processes, behaviors, and skills for many employees. Thus, as with any major transition, this requires leadership from executives at the top who “have a passion for the quantitative approach.” Ideally, this advocate will be the CEO, as top-down buy-in provides the entire organization with a solid foundation on which to build its evolving analytics initiatives.
“Culture is a soft concept; analytics is a hard discipline,” Davenport explained, noting how the two aspects might clash upon introduction. “Nonetheless, analytics competitors must instill a companywide respect for measuring, testing, and evaluating quantitative evidence. Employees are urged to base decisions on hard facts. And they know that their performance is gauged the same way. Human resource organizations within analytics competitors are rigorous about applying metrics to compensation and rewards.”
Teams that effectively learn how to bring the mounting data to action will ultimately be able to predict how customers might react to impending updates or upcoming campaigns. Such insight will allow these employees to curb any issues before they arise, resulting in peak performance and peak results. Predictive analytics also serves as an important differentiator in today’s competitive landscape, as employees can detect what consumers want from their customer experience and make these dreams into reality before other companies can target weaknesses within the industry and lure the consumer to their rival brand.
However, as Davenport emphasized, not all decisions should be grounded in analytics. When it comes to building an effective team, it’s often best to let your conscience be your guide.
“Personnel matters, in particular, are often well and appropriately informed by instinct and anecdote,” he added. “More organizations are subjecting recruiting and hiring decisions to statistical analysis. But research shows that human beings can make quick, surprisingly accurate assessments of personality and character based on simple observations. For analytics-minded leaders, then, the challenge boils down to knowing when to run with the numbers and when to run with their guts.”
Successful leaders understand that success requires both instinct and intuition. While it’s essential for all employees to have the technical skills necessary to execute the company’s mission, it’s also important to create a team of people who can make the connection between facts and feelings. Customer relationship soft skills training for your frontline is a key ingredient to enable this balance. These are the people who will advance your business analytics strategy to the next level and develop an indomitable customer experience that excels far beyond anything the competition has to offer.