Any meaningful business improvement starts with understanding your customers and markets, especially your ideal ones. Since profitable customers are the lifeblood of any business, the changes or improvements a business needs to make are the ones which will do the best job of attracting and keeping the most profitable ones.
While this is a complex process, it starts with understanding your customers and markets better than anyone else. Some people call this business intelligence, analytics, or big data; I prefer to describe it as the process of acquiring and retaining ideal, profitable customers. Why?
Business intelligence, analytics, big data, and other common buzzwords really don’t do a good job describing the desired end business result of acquiring profitable customers, and they fail to address the many issues a business must navigate to make business intelligence profitable. People using these terms typically approach gaining profitable customers as a technical and quantitative exercise rather than making business intelligence the fuel uniting the myriad parts of the organization, such as such as leadership, strategy, culture, people, process, systems; around creating an awesome brand and delivering a great customer experience.
In other words, while business intelligence can be very helpful, its value is never maximized unless leadership ensures it is ingrained into the culture, strategy, decision-making, and every day operations of the business.
Unfortunately, many companies view analytics as a very tactical, technical, and quantitative function. It is true that strong analytical and technical expertise are needed to make it work, and tactical execution must occur for money to be made.
However, effective business intelligence that creates a competitive advantage is far beyond a tactical function driven by technical and quantitative people.
Ideally a strong business intelligence initiative is led by a creative, entrepreneurially minded strategist who can quickly understand the businesses of his clients and provide sound advice, taking into consideration the customer and market analytics within the current context of the organization. That type of approach leads to building your strategies, tactics, marketing, and innovation around the relevant intelligence.
Why don’t we see more of this? Why is it that many C-suite leaders view business intelligence as only a marketing function? Simple. It’s because they don’t see how understanding their customers and markets fits into their strategic planning, IT strategy, financial operations, sales, product development, etc.
They understand they have to sell more products to achieve and exceed their budget numbers, but many fail to appreciate that a deep understanding of their customers should drive their strategy, budget, planning, sales, etc. in the first place. Many have lost sight of the customer and are focusing on the metrics instead of first understanding the customers, planning around their needs, and letting those needs drive the strategy, planning, and financial forecasts.
Why is this? I think it is because the higher someone goes in an organization, the farther they are from customers. They see financial, sales, and operational metrics all the time, so they focus on those numbers instead of the actual customers behind the numbers.
In addition, it seems there are very few people in the world who can make customer and market intelligence tell meaningful, strategic stories about real human beings and the best ways to serve them. I don’t understand why this is so hard, but I guess it is, and it explains why customer metrics aren’t as well represented in Executive Committee and Board level meetings as they should be.
As a business intelligence leader and strategist I have always gone by the rule of thumb that 1/3 of the people I speak with will dismiss customer and market intelligence immediately. They already know everything they need to know! Another 1/3 get excited when I speak with them about the benefits of knowing their customers and markets better, but the crush of daily business prohibits them from moving forward. The final 1/3 embrace it, make time for it, and use it to gain a profitable competitive advantage.
Which 1/3 are you?
Scott McClymonds is a world-class expert on business intelligence, and a thought leader in using it to acquire and retain ideal and profitable customers. He has helped hundreds of clients increase sales volume, market share, and profitability; and is a sought after speaker on the topic. Contact Scott at 479.263.0774, or [email protected] to discover how to make your business grow faster.