Understanding customer behaviour

What all our clients have in common is their use of data to market more effectively. Their investment in translating data into information supports their marketing strategy and delivers actionable information to generate profitable marketing campaigns.

Turning data silos into a marketing asset

A client had many views of customer activity, one for each business division. Each view was managed by a separate business system. None of these systems talked to each other!

As a consequence, the organisation didn't know how many customers it had. They could report customers from each silo, but they couldn't quantify the overlap. Without a clear understanding of customer needs there was:

• A danger of miss-judging customer situations
• Missed cross-sell opportunities

We delivered a data warehouse to integrate their customer silos. The results:

• Management had a 360° view of customers
• Concise information about which services and products a customer purchased
• Valuable cross-sales opportunities

Do you need a complete view of your customers? click here

Using sales data to drive customer segmentation

Customer segmentation is key to ensuring you market successfully to your customers.

Sometimes organisations think they need to buy in external lifestyle or business demographics in order to better understand their customers. Whilst there may be benefits from these data resources, the value of in-house data should not be overlooked.

We find that many organisations focus segmentation on locations. When dealing with businesses, they may use establishment type, Thompson's or standard industry coded (SIC).

In isolation, they don't provide much insight into what makes a customer different when compared to another.

When combined with a measure of customer performance they become far more revealing.

The classic method for measuring customer performance is to score each customer based on recency, frequency and value (RFV). This is sometimes called RFM, where 'M' is for monetary value.

• How recent was the last order placed by this customer - Recency
• How many times has a customer ordered on average within the last ‘n’ months - Frequency
• What is their average order margin for the period - Value

Interested in customer segmentation? You can find out more here.

Understanding customer purchasing trends and habits

Market basket analysis identifies customers purchasing habits. It provides insight into the combination of products within a customers 'basket'.

The term 'basket' normally applies to a single order. However, the analysis can be applied to other variations. We often compare all orders associated with a single customer.

Ultimately, the purchasing insights provide the potential to create cross sell propositions:

• Which product combinations are bought
• When they are purchased; and in
• What sequence

Developing this understanding enables businesses to promote their most profitable products. It can also encourage customers to buy items that might have otherwise been overlooked or missed.

Market basket analysis delivers the "Amazon effect" to your business. When you place an order on Amazon, a list of potentially interesting products (based on a profile of what other "similar" customers have ordered) is presented. They are seeking to encourage purchase of additional items and thereby increase average basket value.

Would you like to increase sales with cross-sell or up-sell propositions? click here