Customer Analytics
Identifying and understanding the best sales opportunities within your current customer base

While market analytics looks at the whole external market and the opportunities and threats, customer analytics only looks at your customer base and asks questions related to retention and what more you can sell them.  Our market analytics insures the customer analytic process isn’t flying blind and is pursuing the best opportunities…providing input as data, context and direction.  Customer analytics are fully integrated as a drill-down from our market analytics for deeper “nano” customer behavior insight and more targeted growth strategies.  Additionally our customer analytics provides options for integrating customer relationship management (CRM) individual customer interaction information.  This is key to building a complete customer profile and ensures client actions and preferences are used to support sales forecasting, potential modeling and marketing campaign development.  It also closes the learning loop by using the CRM information to help measure results on an on-going bases.

1.Customer Profiling
Profiling your customers is foundational to understanding your customer base.  Knowing that you can’t be everything to everybody and understanding which customers are most attracted to your value proposition is the secret to an effective sales growth strategy.  This is ultimately an important component of CRM. Our access to external data providers allows us to profile your customers by household spend, demography, income, ethnicity, lifestyle and attitudes.  Customer profiling forms the data foundation for customer segmentation.

2. Customer Segmentation
Choosing a customer segmentation strategy is one of the most important decisions in market research.  It is both the art and science of clustering your customers based on customer profile data into actionable subgroups.  Subgroups that are similar in terms of purchase behavior so that they can specifically be targeted.  The process starts from the premise that it’s impossible to pursue all opportunities so you need to first measure and rank your opportunities.  Customer segmentation begins the process by making sense of your customer profile information so that you can prioritize your resources to the greatest opportunities.  It helps you discover who your best customers are, understand them better, and then ultimately find more of them.  In addition, its also important that customer segmentation strategies meet requirements for branding, capital expenditure decisions, CRM and more.

Customer segmentation strategies should start with a firm’s actual customer base as opposed to surveying the population to find the types of customers you think you want…research shows that segmentation strategies based on what you know consistently increase profits above strategies based on what you think.  The challenge, however, is to develop a segmentation system that is actionable…that allows you to not only to accurately tag your own customer base, but also tag the population to identify the best prospects at an actionable level, and that you can use for targeting.  Furthermore, you also need to align these customer segments with market spend segments so that you can size them to evaluate your performance and market potential.  As a result, defining the right segmentation schema can be challenging but it has far reaching implications to your organization.

  • Lifestyle segments are typically geo-demographic clusters that profile your customers based on actual household purchase patterns, activities and interests.  These segments are essentially the practical response to customer needs, attitudes and core values.  In Canada, these lifestyle segmented databases originate with the Statistics Canada Survey of Household Spending as well a linkage to other proprietary databases.  The major advantage of lifestyle segments is that these databases cover the entire population, unlike other segmentation systems.  This allows these segments to be used to effectively measure a firm’s performance and market potential at a detailed actionable geographic or trade area level.  This makes these segments best suited for identifying hidden market potential most often hidden when aggregating across geography.  And most appropriate when looking for new customers like your most profitable and site related capital expenditures. We can help segment your customers using appropriate lifestyle cluster segments from external market size providers.  Then we tag your customer database with these lifestyle segments and build performance and market potential metrics that will help you locate and quantify your best prospects.  The downside of using only lifestyle segments is that they only give you information on customer purchase behavior, they do not provide insight into why customers purchase what they do and therefore are not as useful for broad based marketing campaigns.
  • Attitudinal or needs-based segments are survey based research clusters based on core values or attitudes and needs. They get into the mindset of your customer and try to identify what  the key drivers of customer purchase behavior.  Attitudinal segments have really increased in popularity because of the idea that it’s easier to increase sales to your existing customer base than to find new ones.  Because of their broad, but limited overall coverage of the marketplace, attitudinal segments are most appropriate for broad marketing campaigns…and to build strategies to increase sales to your current customers.  The downside of attitudinal surveys is that they are difficult to measure at a detailed actionable level for the following reasons:  First, they define people’s values as opposed to their actions…which can be quite different in some cases.  As a result, these segments still need to be calibrated against reality.  Second, they are based on a survey sample and therefore it’s difficult to tag your customer database and the population with attitudinal segments making on-going measurement of these segments very difficult.  Third, survey results are not typically detailed enough to measure performance and market potential at a detailed level of geography to make them actionable at the site level…and therefore more difficult to use when looking for new customers like your best customers and/or when making site related capital expenditure decisions.  As a result, attitudinal segments most often need to be linked to lifestyle segments in order to fully leverage them.  We can align and link attitudinal segments with lifestyle segments and customer profile data to populate these segments with a new rich source of lifestyle attribute variables. These data can add real insight into your segments for improved targeting and capital expenditure decisions.  Furthermore, using lifestyle segments within a lifestyle/attitudinal linkage cross-walk as a proxy for attitudinal segments is a cost effective approach to sizing your attitudinal segments over time without losing accuracy.
  • Value segments (customer portfolio) are based on the value of the customer to you.  Also called   Customers are typically segmented into deciles based on total sales.  They map out the value and potential loss of each customer for the primary purpose of evaluating and developing customer retention strategies.  Portfolio analysis can also help you align your internal resources (i.e. sales force) with your highest value customers and develop marketing campaigns and customer strategies to increase the value of other customer clusters.  They also create significant additional value to your customer relationship management by combining portfolio segments with lifestyle and/or attitudinal segments (see graphic below).
  • Behavior segments are based on product consumption behavior.  Segments are derived from transactional data and include frequency, recency and volume (i.e. frequent versus bulk shoppers).  These segments are typically used for customer retention strategies and to increase the value of customers (i.e. moving non active customers to active customers).  The downside of using behavior segments is that they only look internally at your customer base.  Further, these segments can be unstable with customers frequently shifting between segments.
  • Custom segments.  There are many ways to segment your customers into meaningful groups.  Often the best approach is a combination of different techniques.  For example, we can link your customer database with relevant geo-demographic, lifestyle and household spending data to statistically build custom clusters for your customers.  The graphic below shows a combination of lifestyle and value based segments.

Customer Portfolio Value and Lifestyle Segment Analysis

3. Customer Mapping
Customer mapping provides a visual means of identifying and analyzing where your best customers live. Our customer mapping is integrated into our customer analytics and displayed in easy to use interactive dashboard that provides a powerful geographic analysis of your customer base.Customer Analytics Dashboard

4. Customer Potential
Estimating untapped sales potential down to the individual customer level is the “holy grail” of marketing and customer relationship management. Our data and modeling ability allows us to do just that. We can effectively estimate untapped market potential down to the individual customer level helping to dramatically increase the effectiveness of your marketing campaigns and sales efforts.  Our mapping and dashboard delivery allows the user to interactively drill-down to each individual customer and have all the relevant sales and untapped potential information available as a tool-tip that pops up as you roll over the individual customer on the map.

Our Advantage

Our Business – building granular understanding to find the best business growth opportunity stories
Our Delivery – discovering and sharing the best growth stories
Our Pricing Customized, flexible and staged to support client analytical needs

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