There are such things as immutable truths. We know. Hard to believe in a world that’s been shaken, more than a little, by a tiny virus. In a way, that upheaval is proof of one immutable truth. Change.
Look anywhere you care to in the universe. Growth or decline is a result of change. Makes no difference if it’s the lifecycle of a star or the grass in your backyard. They flourish or fail because things changed. With accurate analysis, you can figure out why.
That brings us to another immutable truth. Data and numbers don’t lie. Analysis of change reveals facts. But, what do these two truths have in common for your business?
Where Data and Change Intersect
In business, brand growth or decline is also the result of change. But do you know what’s changed in your business that’s had a positive or negative impact? Organic business growth or decline is generally the result of 3 key factors:
1. Interest: the “why” that drives customers or employees
2. Intensity: the rapidity of implementing behaviors that drive business growth
3. Insights: key ideas that open the flow
No one goes into business lacking interest. Everyone wants to make money. Serving customers is the path to profit. And, business seldom lacks intensity; the desire to be there “firstest, fastest, bestest.”
But businesses, especially those in decline, often lack the insights needed to recover or grow. This is where data and change intersect. Analyzing the data in hand, to create the insights needed to prosper. Change and grow. Stay static and die.
Asking the Right Question
So, let’s define “insight.” Insight is that “aha” moment when analysis of available information adds up to “2+2=4”, and begins to reveal a solution, or a strategy, to address issues or opportunities. Insights, taken to action, become a rising tide that, as Winston Churchill said, “raises all boats.”
But how do you generate these insights? It starts with asking the right questions. Sticking with the wisdom of mid-twentieth century minds, Albert Einstein said. “If I had an hour to solve a problem and my life depended on the solution, I would spend the first 55 minutes determining the proper question to ask. Once I know the proper question, I could solve the problem in less than five minutes.”
Insights into business dilemmas or opportunities are no different. The facts are the facts. It is important to understand what the facts tell you, but perhaps even more important, ask “why are they telling me that?”
In all probability, you have a great deal of data at your disposal. Businesses spend billions on CRM software. Your data will reveal much. Sales are down. Customer satisfaction is down. Customer loyalty is down. But “Why?” That’s the right question.
Using Churn as an Example
For example purposes, let’s apply this thinking to a common business problem, especially in B2B. Customer churn. Churn is a topic that means many different things to different roles in the organization. So, as a best practice companies must first determine how to measure churn consistently within their organization. A common definition for customer churn is cited as the number of customers who stop doing business with you during a given timeframe.
We’ll oversimplify here, but one of the next ways to tackle the business problem is to explore is a timeline comparison. “Where were we when decline started?” “Did we change something?” “Did the competitive landscape change?” Important questions that can lead to insights. But, sometimes, the solution isn’t that simple. Your data can tell you what your problems are, insights can tell you why.
Sadly, churn is often driven by a lack of understanding customer wants and needs. The root cause? Lack of closely monitoring and understanding data. The data around customer behavior is not being used systematically to increase customer loyalty and reduce churn.
That’s why Precision recommends a different, more effective standard and methodology for churn: customers whose sales have dropped by more than 75% vs. prior period. Using this definition, a churned customer is the same as an at-risk customer is the same as a lost customer, heightening the focus on retention of at-risk customers.
Then rather than utilize gut feel to solve for churn, statistically modeling can be applied to look at the customer behavior, demographics, market basket, and more to factually determine the root causes of churn and decrease in customer loyalty.
Implementing the 1-2 Punch:
Let’s face it, one of our most valuable sales and marketing yardsticks is lifetime customer value. Stated differently, it’s a lot more profitable to keep business than to go out and try to replace it. So, what’s the answer? The answer may lie in contracting with pros who can help with Marketing consulting and Data analytics to get to your “2+2=4” threshold.
From a marketing consulting perspective, one of the first steps may well be market research. Remember, knowing the what’s of customer behavior may not be the same as the why’s. You know your situation and have some guesses, but relying on guesswork is a poor business model. Insights from customers will lead to marketing and sales solutions that address customer behavior, perception, and preference. That what marketing consulting firms do.
From a data perspective, you can benefit from professional expertise dedicated to data analytics. Data interpretation is an art of nuance. Like forensic accounting, a solid analytics pro can filter data in ways honed by experience. uncovering kernels of truth, revealing facts to lead to insightful questions to ask your users. Remember, numbers don’t lie. But you need to be able to connect the dots of the story they tell.
Used together, marketing and data intelligence are a powerful 1-2 punch in addressing business challenges. You get both insights and solutions. But remember, in a changing world, asking and answering questions, and reviewing insight and strategy, can’t be a one-time thing. It needs to be an ongoing, integrated process. One designed to keep the lifecycle of your business evergreen.
Precision is a leader in B2B market insights and channel sales analytics. We take great pride in being true partners with our clients, leveraging our rich B2B experience, unique data sources, and proprietary statistical models to help our clients solve complex business problems.
Precision partnered with C3Consulting, a B2B strategic marketing consultant, to author this blog and associated eBook.