Join Eddie Davila for an in-depth discussion in this video Managing customer data, part of Business Foundations.
- Perhaps you like Starbucks coffee, maybe you love to buy things from Amazon.com. Do you have a Netflix account? Where do you buy your groceries? Which cell phone provider do you use? The companies that sell you the things you need, they appreciate the purchases you've made from them but they want to keep you as a customer. So they are probably more interested not in what happened yesterday, but what you need today and what you'll need in the future. Now more then ever, companies are relying on customer data to discover the mistakes they've made in the past and to help them form the business decisions they face today.
The first hurdle in using data to make better decisions is gathering data. Some companies have an advantage in that they require that you create an account and then via digital devices they can track all of your behavior when you use your account. Because of the digital account they have your personal data and they also have your transaction data. For companies like Amazon, Netflix and your cell phone provider, gathering data can be rather easy. Grocery stores and Starbucks rely on frequent buyer programs but they can also track all your transactions tied to your credit or debit card.
Suppose the company wants new customers. They could use Demographic data associated with current customers or they can gather Public and sometimes Private data from companies like Google, data consultings and sometimes from the government. Data is special because it can be so personal. If you went and asked a data mining company what they knew about you, you'd probably be shocked, angry, frightened and perhaps a little embarassed. This is why companies that collect and purchase data about individuals must be extremely vigilant about keeping that data safe.
The data your company collected could be used to defraud, embarrass or harass your customers. It may reveal information about your suppliers that their competitors could use against them. And it could inform your competition about how they could steal away your customers. Poor data security is a threat to your customers, business partners and your very own company. Now provided you can keep the data secure, the data collected may show changes in buying patterns of your grocery store customers.
Perhaps the aging of your customer base is impacting the sales of calcium supplements. Data can show where most of Verizon cell phone customers are located. It can illustrate shopping patterns at Amazon that result in sales made and transactions that the customer never completed. It might even reveal how cloudy days impact the amount of coffee customers drink. The question is is any of this important and if so what should a company do about it.
The best companies, they don't blindly look through data. They pose interesting and important questions that relate to a specific decision. Then they look through the available data for answers. For example, should Amazon consider a lunch delivery service in metropolitan cities? Or should Netflix invest in programming targeted at Spanish speakers? These are directed questions that direct data analysts as to what to look for in the data.
Understanding your customer, who they are, what they like, when they want it, how they are changing, it's the most important thing in developing a company. So next time Amazon, Netflix, Starbucks or anyone of your favorite companies announces a major change, ask yourself how the data they collected drove them to make this change. And next time your company faces a difficult decision, consider the challenges your company faces in gathering the data needed to find the solution to your problem.
If your company doesn't already have a data specialist make it a priority. Your company's future is counting on it.
He also reviews the basics of the people side of business: managing employees and developing customer relationships. Last, he covers the financial and information management aspects of business and provides a basic explanation of economics, so that you can understand the relationship of your business to the bigger picture.
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- Understanding business goals, stakeholders, and resources
- Developing a product or service
- Selling a product or service
- Raising capital
- Managing employees
- Managing customer data
- Understanding finances
- Managing resources
- Understanding economics