A new survey by Accenture has found that customer experience may be suffering due to a lack of business analytics penetration in many enterprises. The study reported that 70 percent of organizations are only using reporting and analytics in two or fewer business areas.
The study asked 800 IT directors and senor managers from major corporations in the UK, US, Brazil, Germany, China, Spain, Italy, Japan, Canada and Ireland about their use of analytics to help target, segment, service and engage with customers.
Business analytics under utilized
Whilst 55 percent of respondents reported their methods for segmenting and analyzing customers as “very good” or “ideal”, more than half do not use analytics as part of the processes, with most admitting that their company could benefit from a more thorough use of customer analytics.
More alarmingly, the report found that many organizations are just as likely to use personal experience, as they are data analysis, when making customer-oriented decisions.
“Ten years ago, organizations could get away with relying on intuition to make decisions about how to engage with customers but today’s world is wired and interconnected in such a way that customer expectations and influence are greater than ever before,” said Accenture’s Global Lead for Customer Analytics, Julio Hernandez. “Analytics enable organizations to draw fact-based conclusions about what customers are actually doing and what they are most likely to do and need. Whether in product features, delivery or price, organizations are leaving money on the table by not applying the power of analytics to these decisions,” added Hernandez.
Improper use of customer analytics: Company, not customer focused
Even amongst organizations actively using analytics in marketing, sales and service, most are not applying it broadly across the full spectrum of marketing and customer activities. This includes critical areas such as pricing (86 percent of respondents not using), product/service delivery (77 percent of respondents not using), sales (61 percent of respondents not using), product and service development (59 percent of respondents not using), and customer service (56 percent of respondents not using). The study found that customer analytics are most commonly applied to marketing, with 65 percent of respondents reporting the use of data analysis to help underpin marketing initiatives.
The report suggests that most organizations utilizing customer analytics segment customers according to their potential value to the organization, rather than by customer needs. The metrics most commonly used to segment customers are company, not customer oriented, and include:
- Profit per customer (used by 41 percent of respondents)
- Lifetime value (used by 27 percent of respondents)
- Share of wallet (how much of a customer’s total spending occurs with the company was recorded by 24 percent of respondents).
“Regardless of how analytically mature they are, most firms largely focus on using analytics to better understand the customer’s value to the organization and much less on the organization’s value to the customer,” said Hernandez. “This leads to a customer experience that is over-indexed on meeting the needs of the organization versus the customer. Organizations will benefit from a more balanced approach to using analytics, one that takes into account what’s sustainable for the business as well as what’s relevant to the customer.”
Business analytics lacking pervasiveness
Only about 15 percent of respondents said their customer/prospect data is easily accessible, suggesting highly departmentalized and siloed use of data analysis, as well as data quality limitations and a lack of staff skills regarding data analysis and report writing.
The report listed budget limitations, lack of managerial support and corporate culture as the major obstacles to widespread use of customer analytics.
Conclusion: Ignorance is bliss
The study found that enterprises with underdeveloped analytics programs are far more likely to believe that the data sources they do collect and analyze are accurate than those that utilize reporting and analytics more deeply and broadly.