Data: Its What you’ve NOT got

Posted: March 10, 2008 in Business Advice, customers, Marketing, Technology
Tags: ,

You go out for a meal, something about the place you choose is not to your liking. Its one of your regular haunts! Maybe the new menu doesn’t excite you or the service was slow, or a new waitress just doesn’t cut it.. No matter what the reason – the next time you are deciding where to go, you more often choose somewhere else. You go to this favorite place less and less regularly.

OK – so you vote with your feet, and they eventually loose a customer.

Your customers are no different. If you wait until they stop buying, then its too late, (churn – yuck – I hate that word, its so un-personal).

Most sales reporting focuses on just that, and customers who are buying less-frequently are buried in a maze of other factors until its too late.

This is just one of the more obvious scenarios – and there are many – where you should be looking for what data you DONT have as much as the data you do have. Becuase the don’t-have data is full of potential, while the do-have is just history.

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Comments
  1. Mark Tewart says:

    Most businesses don’t measure anything let alone the important data you are talking about. I wonder how many businesses could tell you how many inactive customers they have? These are the customers that aren’t frequenting anymore. Every business should have campaigns around reactivating their lost customers. I wonder how many businesses have data to identify incoming calls and what happened or did not happen? The don’t have data you mentioned is what drives most busineses out of business. You must quantify to qualify.

  2. Richard says:

    You are right on the money with this.

    I spent all day Saturday with some respected colleagues looking at my business strategy, and along with a load of other ideas, had decided to go back over the past 18 months data, and look at who hasn’t repaid my business a repeat visit.

    In my line of work, some people may only need us occasionally, while others will use us almost monthly. It’s really hard to know if they have gone to a competitor, or simply not needed our products and services.

  3. Chris Draper says:

    Richard – the trick is to look at the frequency of each customer rather than an average. (Email me off list if you would like to know more).

    I did some work a few years ago for a major bank and we were able to spot trends in the most irregular of ‘purchasers’ by taking a couple of other pertinent factors into account.

  4. Chris Draper says:

    Mark – check out the customer value calculator on my website (and discussed in an earlier post). If you and I were able to get more businesses using something like this they would pretty quickly start collecting the data you speak of.

    My post was largely referring to the fact that of those that do know they loose a customer, they mostly aren’t tracking the downturn sufficient to pick up the problem earlier.

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