The benefits of having a multidimensional view of the
customer
When we talk about a multi-dimensional view of the customer
we refer to view of the cu-stomer purely from the business perspective in
relation to profitability, risk, responsiveness, loyalty, behavior and
preferences. So, ability to see a single customer along these dimensions would
undoubtedly give any organization incredible competitive advantage of being
able to serve customers better and in return being awarded by customer’s larger
share of his wallet.
And this can certainly be achieved by using predictive
analytics whose main output are probabilities, which in this case would be
probability of being loyal, profitable… etc. So if you know that specific
customer is of low value to you, whose cost of serving is far greater than the
value he brings it to you in terms of profitability – who cares about his
loyalty and preferences? You don’t want to waste a cent of marketing budget on
him, in fact you want to open the door as wide as you can and let him go. On
the contrary - customer in the highest value segment whose loyalty scores are
dwindling deserves to be phoned by your top account managers to see how you can
improve your service to him. And if you know his preferences and buying habits
- you know what to offer him to have him re-think
his intention to leave you. This is what we mean when we say knowing the next
best action toward the customer even if action is – don’t do anything, let him
go!
At this level, analytics are no longer used for decision support –
they are used for decision making. All you need is to look for constellation
of these probabilities and next action toward the specific customer, or customer
segment becomes crystally clear. You just need to act on what these numbers are
telling you and “count the blessings”. This is what I call “holy grail” of
analytics and until an organization can do all the above and more – usage of
analytics is nowhere close to optimal. And for these companies who use
analytics at that level and for those purposes – pay-offs are huge, but you
may never know about it.
Goran Dragosavac
