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Market and Sector Type:: Media & Marketing
Article Type:: Analysis

Customer intelligence: the facts

Article Date: Apr 25 2008 Pete Swabey

An industry has sprung up that takes the old adage of ‘knowing your customer’ that stage further. Customer analytics software promises to help businesses explore patterns within their data, thereby learning more about their customers and hopefully encouraging them to spend more money.

The Royal Shakespeare Company (RSC) began its customer analytics initiative in 2004. Using analytics technology, seven years’ worth of ticket-buying data was analysed and segmented, and various different categories of customer were identified. Four segments were found to be more likely to attend regularly. ‘Once identified, these segments became our marketing priority,’ says Mary Butlin, head of strategic planning at the RSC.

Thanks to this improved insight into its most valuable customers, the RSC has seen attendance at performances grow by 75 per cent over the past three years.

According to Jack Noonan, CEO of SPSS, a company that sells high-end statistical analysis tools, customer analytics technology is being voraciously adopted in Japan. He says the country is applying ‘data-mining technology the same way it applied statistical modelling to manufacturing in the 1980s’.

Challenges surrounding customer analytics include technological complexity and privacy concerns. Controversy is currently fomenting around a customer-analytics service called Phorm, which tracks individuals’ online behaviour, often without their knowledge.

While customer analytics may be a useful tool in understanding buying patterns and preferences, it’s no substitute for going out and speaking to the people who use your product or service direct. And that’s free.

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