Understanding customer behavior gives you insight to the processes people follow when making a buying decision. Ideally, the information you gain from data diving guides good marketing and management decisions. But, what if the data integrity is compromised by usability, processes, and policy? Does the information gained help or hurt the company?
Target’s now famous analysis that unwittingly outed a pregnant teen to her father has undoubtedly contributed to the company’s growth. Statisticians used product purchase history to assign a “pregnancy prediction” score. Marketers then used the score to target customers with advertisements and coupons.
Amazon uses the website review system to capture information about products consumers have purchased from competitors. That information is combined with customer behavior to create targeted email marketing to attract more sales:
The introductory line reads, “Amazon.com has new recommendations for you based on items you purchased or told us that you owned.”
Behemoth companies like Target and Amazon have the resources to invest in deep data diving to find better ways to market. Smaller companies seeking growth and better margins are following the big boys’ lead. “Big data” has become the buzzword of the moment and marketing trend to watch.
Prior to searching for new ways to target marketing messages, Target and Amazon focused on the shopping experience. Usability and preference studies were conducted to find out how people interacted with different channels. Systems, processes, and policies were reviewed and revised as needed to provide better experiences. The companies built a customer care foundation first. This serves as a launch pad for improvements. Without it, growth is almost impossible.
The rush to participate in the big boys’ game hurts companies that don’t have a solid customer care foundation. No amount of analysis and marketing can make websites more usable, employees care more, or customers happy with bad service. The best return on investment comes from improving the customer experience. Data can help with the process but it doesn’t replace the need.
Most people want to be recognized as the best but only a few are willing to do the heavy lifting required to make it to the top. Customer behavior analysis is an escalator to growth and profitability for companies with a solid service and experience foundation. Without the right infrastructure, it is a money pit. Before considering a big data dive, invest resources in optimizing your website, training your team members, and improving your service. The process is hard work. The returns are excellent. And, you may find that the data you would have used to make business decisions is flawed.
A recent review of a company’s customer behavior suggested that customers preferred telephone ordering over online. The marketing manager explained that they had an older customer base that liked talking to customer service representatives. The explanation was reasonable until I visited the website. Navigation was virtually impossible. The search box only worked when the exact item number was entered. Several of the top selling items didn’t list prices or have an option to buy. A banner reading, “Call 1-800-XXX-XXXX to place an order” was posted instead of “Add to Cart.” Do customers prefer to order via telephone or do they have no other choice?
Data integrity is always an issue. Even in controlled tests, information can be corrupted by external sources. Customer behavior analysis is a good tool for gaining insight into opportunities and challenges. Just be careful about letting the numbers drive decisions. They may be wrong. Before jumping into the big data pool, test the water by starting small, testing well, and continuously watching for external factors that affect the results.
If you want to discuss how this applies to your business, please email me at firstname.lastname@example.org.