11 Oct Why Businesses Should Use Data to Understand Their Customers
A well built business plan has long been a hallmark for many an entrepreneur starting a new venture or growing an existing one. Even if you were not looking for financing or investors, a business plan helped you to collate your vision into a coherent strategy. One segment of a good business plan would hone in on identifying your target market, and NO, selling to everyone is not an acceptable statement when identifying your customers! Knowing who you would be catering towards in your marketing, branding, positioning and so on was, and is, critically important to the success of your business.
In our modern, technological, marketing-saturated, hyper-connected, everything-at-the-flick-of-a-finger, data-rich world it is more important that ever for businesses to know and understand their customers. Using data and analytics to dive into the world of your consumer will offer insights to help you stay relevant and grow.
Understanding Your Customers Breeds Loyalty
Consumers today expect that businesses collect and store information about them. In exchange, they are looking for businesses that deeply understand their personal priorities, motivations, and are genuine in their caring approach. Businesses that deliver here will gain the loyalty of the market. The numbers show that 56% of customers are loyal to brand described above.
An Increase in Loyalty Can Lead to an Increase in Profits
Sometimes the answer in growing your business is not in getting more customers, but in selling more to the customers you have. Increasing the retention rate of your clients can have a dramatic effect on your profits! According to Semarchy, a 5% increase in customer retention equates to a 25% increase in profit! That is a significant number and should cause you to go running to make sure you are keeping more of your customers coming back!
Loyal Customers Refer More Business
“Everyone refers business”, you say? That could be true, but remember your business plan, you can’t sell to everyone! The truth is that a one-time buyer may refer a person or two your way IF they’re REALLY HAPPY. A repeat customer on the other hand, someone who keeps coming back and buys everything you’re selling, they will refer 4-5 times as many people as your one off client. As a bonus, 92% of consumers trust referrals from people they know! It’s like having extra salespeople, for free. Again, this is a huge source of potential revenue for your organization that many businesses are simply not capitalizing on. Repeat customers lead to more repeat customers.
As you can see, there are several benefits to knowing your customers along with many others we have not covered.
Using data to dive in, understand, know and deliver the experience your customers are looking for is important for businesses to stay competitive today.
Talk to us today about how we can help you leverage data to understand your customers and grow your business.