In this series, we explore How data- driven customer management through a) customer intelligence and b) customer engagement is the secret sauce for the success of modern business. The two components of effective customer management are first the understanding of customer behaviours and preferences (i’e’ “customer intelligence”) and the implementation of consistently grow customer value (i.e “customer engagement”)
What does every business have in common?
In this series, we explore How data- driven customer management through a) customer intelligence and b) customer engagement is the secret sauce for the success of modern business. The two components of effective customer management are first the understanding of customer behaviours and preferences (i’e’ “customer intelligence”) and the implementation of consistently grow customer value (i.e “customer engagement”) Although businesses come in different types and forms, there are some common principles that cut across every business, and in this article we will explore a few of these examples and the role of data. The success of every business is the extent to which it can consistently perform five key functions in the customer life cycle. Businesses must 1) identify, 2) acquire, 3) serve, 4) retain and 5) upsell profitable customers.
How every business is like a hotel for customers
The business of hotels presents a simple but useful analogy in understanding some of the principles behind data-driven customer management. In a sense, every business is like a hotel for customers because it must acquire, retain and maximize the value from profitable customers, while hoping for high repeat usage, longevity and customer referrals.
Here are 8 ways in which every business is like a hotel:
- Boutique hotel or camp site – Every business must first know its own unique offerings very well and therefore identify the specific kinds of customers who are most likely to find these valuable. A boutique hotel needs to identify hotel aficionados or high income individuals, whilst a campsite needs to identify backpackers.
- Business Traveller or Family Weekend Getaway – Once the ideal customer profile is identified, suitable marketing strategies must be implemented to convert potential customers who fit this profile into actual customers. A hotel targeting business travellers might use in-flight magazines whilst for family getaways coupons might be placed at local restaurants.
- Monthly Business Trips or Annual company conference – Once a customer has been acquired, every business should seek to keep this customer patronizing its services or products on an ongoing basis (daily, weekly, monthly, etc). The hotel must encourage the business traveller to return to the same hotel for every trip or the company to do its annual conference again.
- 1million hotel points- Customers who return to patronize the businesses’ offerings in the future, are more valuable than customers who never return. Loyalty creates stickiness, that is why large hotel chains have elaborate loyalty programs to keep customers coming back and within their ecosystem.
- Spa package or Buffet Lunch – Where suitable, businesses can offer additional or related offerings that keep customers spending more with it. This is often called “upselling” or “cross-selling”. Once the hotel has customers hooked, how can it sell higher value add-on services.
- Upgrade to the deluxe suite – Customers who during each visit or transaction patronize more services are more valuable. The 80/20 rule. 20% of high value customers usually make up 80% of a hotel’s business, your business might be no different.
- Satisfied Customers with Positive Reviews – Customers who find that their specific needs are well-suited to the specific product or service offerings of the business are more likely to be satisfied with their experience. Businesses can implement Net Promoter Scores (NPS) to measure measure customer satisfaction
- Tripadvisor reviews and word of mouth – Customers who are more satisfied with their experience are more likely to recommend the business to others, to drive further growth of new customers. Can the hotel remind and encourage satisfied customers to recommend and leave positive reviews.
How can customer segmentation help?
For each of the above areas, the ability of a business to carefully divide customers into groups based on certain unique characteristics and behaviour qualities that customers share between them is crucial. This process of grouping customers is called customer segmentation, and it can be carried out manually or using suitable software tools.
Customer engagement unlocks the value of customer segmentation
However, of utmost importance is the ability of a business to act on these different groups of customers identified through customer segmentation. Examples of ways in which this can be done include promoting specific initiatives or policies in response to identified customer behaviours, launching reward programs or pricing changes like discounts or coupons where possible or recommending new products to existing customers. Customer engagement therefore is how businesses are able to translate their understanding of customer expectations and preferences into personalized offerings that grow value both for the customer and consequently for the business itself.
Book a Consultation
Superfluid Labs and Beem have partnered to deliver Data-Driven Customer Engagement for Businesses Across Africa. Book a consultation with us to find out how we can help you grow your Data Driven customer engagement initiatives.