By Tim Norman

When the 17th Century philosopher Sir Francis Bacon said “knowledge is power” he couldn’t have possibly imagined the enormous volume of information that businesses in the 21st Century work with day-in, day-out.

Data drives every single decision within a business, or at least it should, and the harder you can make that data work for you, the more effective your decision-making can become. The old-school approach to decision-making was typically extremely reliant on the instinct and experience of the senior management; their gut-feel. Or even, in more extreme cases, the whim of the chief executive. It is far from being a scientific approach, and harks back to an era when phrases such as “my word is my bond” were meant to be all the assurance anyone needed at the London Stock Exchange. While it may be still the case that many smaller owner-managed businesses rely on the contents of the managing director’s head to keep running, growing successful revenue streams needs a more strategic approach.

It is widely recognised that capturing, monitoring and managing customer information correctly can be one of the most effective aids to strategic decision-making. With the widespread adoption of internet-based technologies we have witnessed an explosion in the number of customer channels and touch points. This has in no small measure resulted in a huge growth in the amount of data businesses can collect regarding customers and their behaviour.

On the surface this sounds like it could only be a good thing. But to really take advantage of all this customer data, a business has to be able to analyse it accurately, reliably and – in an ideal world – in real-time. In so doing a business can really make its data work hard.

Almost all businesses engage in tracking and monitoring their customers’ activity to varying degrees and will have customer data in some form or another. But all too frequently, this data sits in silos, relating to separate aspects of customer behaviour and not providing the complete picture.

One of the clearest ways to imagine how all this begins to fit together is to consider the importance of converting online activity into offline sales. Again, this may sound on the surface to be stating the obvious, however getting to this point requires a radical shift in thinking for many businesses.

How offline and online information is interpreted presents another data hurdle for businesses. For example if, in an online environment, a consumer abandons their shopping cart part way through the purchasing process the data will suggest that a lead has been lost. However it is quite possible that the person was simply browsing or making price comparisons online, before visiting a store to handle and interact with the product in person. This is just one challenge amongst many when it comes to the complex business of interpreting and acting on customer data. The key is not only making sense of the information derived from customer interactions across a constantly increasing variety of payment channels; but also ensuring that the on and offline experiences are consistent for consumers.

Many businesses use discount offers to attract new customers and to entice existing ones to keep spending.

In the purely online sphere this is a reasonably straightforward strategy – easy to deploy and to measure. You email a code to your targets and they enter the code at the checkout on your website to redeem it, providing them with a discount and you with the necessary data to see who redeemed the voucher and when.

But what about getting the recipients of your email to visit one of your stores? A mix of on and off-line sales channels is commonplace and there are still some businesses who don’t engage in ecommerce at all. Yet, email marketing remains an extremely cost-efficient way to reach out to high volumes of consumers. Assessing whether they were the right ones to receive a given email is a trickier proposition for those not trying to drive traffic through to an ecommerce platform.

Again, the use of tracking codes, maybe printable barcodes and vouchers is one option for getting around this challenge.

But whatever route is taken, it is vital to be able to asses who your customers really are, which are opening your emails, and which are actually doing business with you. Once you have captured that level of information it is possible to begin more sophisticated profiling and targeting which ought to result in an uplift in marketing results and sales.

It can also help build customer loyalty and reduce churn rates, which can be combated by offering customers a level of service that makes them reluctant to move, coupled with rewards and offers that are relevant to them as individuals.

Analysing all aspects of the customer’s behaviour such as their purchasing patterns – are they generating good revenue, and so on – should inform your decision on how strongly you want to keep any given customer. If they are a profitable customer there may be additional incentives for them to stay, alternatively you might be prepared to let them go.

Looking at historical data like this has its limitations too, though. By definition, all it can ever do is enable you to make decisions based on what happened in the past. Forecasting needs to be more than a series of best-guesses based on historical trends. Customer behaviour changes in real-time so, therefore, must an organisation’s response to that behaviour. During times of economic pressure, retaining customers becomes even more important than ever – brand loyalty is not to be taken for granted when both businesses and consumers are under pressure to reduce their costs and look for the best deal.

So rather than just analyse customer data after the fact, what is needed is the ability to view and interact with customer behaviour while it is happening.

Social networking tools can be useful here – user-generated content, in the form of reviews and recommendations in particular. Brands can facilitate such content by providing the platform for this kind of consumer dialogue to develop, and then being mature enough to step back and let it run its course. These interactions can be monitored and measured, helping to form subsequent marketing strategies.

A unified marketing strategy, running on a platform that enables customer interaction and data to be captured, can help a business interact with customers in real-time. Relevant special offers and promotions can be displayed while customers are on your website searching for specific items, all driven by their online behaviour – products or peer reviews they have viewed, for example.

These offers and promotions could be online or offline vouchers generated in real-time. Customers are more likely to use coupons or vouchers that relate to exactly what they are interested in rather than something other similar people may have bought. And they are more likely to come back to your company if you can deliver relevant incentives.

When a company’s customer data is stored in silos it can never be used effectively to provide a 360-degree view of actual customer behaviour. Pulling together the offline and online will empower an organisation by letting it analyse every aspect of customer data, and most importantly to act upon it decisively.

Change is an unavoidable part of business life. In more challenging economic times the ability to become an agile company is more important than ever; opportunities need to be identified and acted upon quickly and successfully. This involves making effective decisions, which might sound a little like stating the obvious, but the process by which decisions are made within an organisation can have a profound effect on their outcome.

Bringing the on and off line data together in real-time is a major challenge but one that could yield considerable results.

About the author

By Tim Norman is sales director at SDL Tridion (www.sdltridion.com).