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Archive for the ‘Retention & CRM’ Category
What is the most valuable asset a business has?
Thursday, November 25th, 2010There are a number of potential answers such as its staff, location, technology etc… but for most businesses, one of them is ‘data’.
Most businesses, no matter what industry they’re in passively collect data that, when analysed can provide deep insight. More and more businesses are getting smarter about how they collect and manage their data, and quite rightly are giving analyses a prominent place in their decision-making processes.
But becoming a data-driven or even efficient business isn’t easy. There are plenty of pitfalls that can turn data into a liability and even result in decisions being made without the facts being known.
Here are five rules for data-driven businesses looking to avoid those pitfalls.
1) Too much data is harmful
More and more businesses have recognised the importance of collecting data and analysing it to drive important decisions. That’s a good thing. But many can make the mistake of collecting every bit of data they can find. This is not only distracting; it can reduce the quality of data-driven decisions because those decisions are only as sound as the analysis they’re based on. When too much data is collected, there’s a greater likelihood that the wrong analysis will be performed.
2) KPI metrics derived from data should be tied to goals
Sure, knowing, for instance, what your company spends, on average, acquiring each new customer is a good thing to know. But how much should you be spending acquiring each new customer? Chances are that’s a lot more important, which is why, in many if not most cases, metrics should be associated with goals.
3) Context helps
Context is your friend, so use it when setting goals. Using the customer acquisition example: what is the average cost of customer acquisition in your market? Are you above or below that? Are you getting what you want from your activity? What reduction in customer acquisition costs would boost income by 10%?
By adding context to your equation, you can make sure that the goals you’ve tied to KPI metrics are meaningful to your business.
4) What happened then, will not necessarily happen now
Data is inherently limited to yesterday and today – therefore applying predictive analytics which applied yesterday to today’s data – does not necessarily mean the future will follow the same historical performance. No matter how sophisticated your data is or how you have performed previously, predictions are simply educated guess work.
Data-driven business that use data to make educated decisions; should not naively believe that data is a crystal ball.
5) Don’t dismiss the qualitative
Hard data is wonderful, but if you’re only paying attention to the hard data, you’re missing out on a huge part of the big picture. How do your customers relate to your products and services? What is most important to your stakeholders? These are questions that can help guide a business down the right path, but the most important aspects of the answers to these kinds of questions won’t always be provided by numbers that can be crunched.
Retention….. the hidden key to broker growth?
Thursday, March 4th, 2010Insurance brokers are indeed fortunate. Why? Well there aren’t many sectors where a company sells something to a customer, only for that same customer to return time and time again, around 80% of the time. Not in consumer goods, retail, telecoms, automotive, or a whole host of other sectors does this happen. So do brokers really appreciate the opportunity that renewal dates present to other brokers?
The reality is that competitive intensity within the commercial insurance sector is increasing within an uncertain economic landscape. Many brokers are considering some sort of lead generation activity as a solution to the problem of customer churn, often as a result of a price sensitive market. So how do you fend off the dogs and look after your own?
Brokers do have options. You could accept that you will lose some customers to rival broker lead generation whilst employing the same tactic to do the same to others… growing to stand still. You could rely on traditional methods of business development and wait for the ‘referral’ phone to ring. Welcome but unpredictable. Or you could hone and develop the customers you already have, by locking them in and giving them no reason to look elsewhere. It’s your choice but its vital to get it right.
Proper, planned, targeted and relevant Customer Relationship Management is one way to protect your customers from walking away to the next price driven offer. There is more to it though than simply relying on good customer service, it’s about working closer, becoming tighter and adding more value to their businesses through your expertise, to ultimately become their broker, rather than just a broker. Would you move your business to another supplier if they demonstrated value to your business?
True CRM is about effective communication with customers, learning along the way and building loyalty over a period of time. Knowing what they like, don’t like, need and want, all at the right time. It’s no more complicated than that. To facilitate true CRM, a broker needs to be able to interpret data intelligently and communicate with customers in a regular and relevant way, demonstrating usefulness and value to a customer (it’s not just about a newsletter!). Advice is available on how to create a simple plan and putting it into action, utilising the right tools. Get it right and you can not only protect your hard earned, happy and loyal customers from attack, but also enhance your profit and reap organic growth at very low cost.
If you do want to operate growth on all fronts by adding to the external pipeline, I know a few chaps who do a mean line in lead generation too…