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Analytics solutions and CRM: typical situation?

Just wanted to share some thoughts. While I am used to work for larger CPG/Insurance / Telco/ Banking/ Entertainment/ etc clients providing customer centric solutions, I recently hadrather an interesting client. What this business was going through, from the marketing and overall CRM strategies point of view, I found rather bizarre. However on a second thought, it might be a typical situation for many medium and small businesses whose profits strictly depends on customers' involvement and customers' loyalty.

I'll be brief, but let me know what you think.

No names. The company is a small 'start up' company, and it's global, and it's online.I don't call it start up, because the business has been around for more than 15 years quite successfully. The business has a positive revenue growth every year, quite stable. However the company strugglesto invitenew customers, especially customers who is willing to be profitable customers.The company also have some competitors who literally eat their lunch.

I was invited to help with analytics. Primarily, customer centric analytics. I started with my usual routine investigation: do they have the right data, do they use it in the right way, what is it they already know about their customer, about their customers' value and their needs.

What I fund was really puzzling. The company hadmassive amount of data stored and refreshed using multiple servers, and some of this data was even stored in the sufficient, from analytics stand point, way. The company invested in Google Analytics and some additional trendy software. But the company didn't know what is themonthly customer churn rate. No clue. I asked "Do you know what's the average tenure of the customer", and the answer was, 'We never thought about it". Huge investments in analytics tools, but those investments couldn'tanswer simple questions: who are the most and least valuable customers, what's their potential, what kind of products they are looking for, who are most likely to get on board and bring revenue, and who are whose customers who bring the highest revenue today but will leave tomorrow. And this is only a starting point.

And not only those questions were not answered, they were never actually asked. When I started my work, the company was already on their way of purchasing from yet another analyticsvendor, hopingthat maybe it's finally the right one.

I will not go into details on what kind of solutions I created to get at least initial understanding of what's going on. I want to know your opinion:

How often do you see something like this happening?

4 Replies

Cody Watson
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Cody Watson Entrepreneur
Strategy & Analytics Leader, Project Manager, Entrepreneur
I have been in the exact same discussion, although working in an internal consulting role. At the end of the day it all comes down to culture. I am guessing this company has a lot of technical people - the discussions in the business are driven from a technical perspective and not a business perspective. The new analytics tools are shiny and fun, but the business doesn't have a grasp of what it's business requirements are for such a solution. I have implemented a number of very simple analytical systems and teams and have found that these end up having the biggest impact because they FORCE the business to ask the right questions rather than getting distracted by the technology. It has come down to free tools being faster, more stable, and less expensive than some of the leaders in Gartner's magic quadrant. In sum, this is a people and culture problem. It can change, but the executives leading the company need to hear the cold, hard truth that they need to invest in the right people that will ask the right questions with the technology that they have today, and make a real (planned) commitment to change the culture of the company to one that makes decisions with data rather than gut instinct with data when it is convenient. Cody
Curtis Guilbot
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Curtis Guilbot Advisor
Executive Agile Coach
>>How often do you see something like this happening?<<
Surprisingly often, Natalie.

Leadership, especially line-level and mid-management, is often very precise in answering the wrong questions, or, as in your client's case, simply not asking the right questions at all. It's understandable, but inexcusable. There are many reasons why companies become per blind to the most basic business drivers, but our job is to get them back on track. Fortunately,enlightened leaders are willing to pay good money for us consultants to help them do so (as they should). One benefit of using consultants is that we'll come in with fresh eyes, ask the (seemingly) routine questions, and often be surprised to find, along with our client, that the organization has been remiss in doing the same, and needs to go back to basics. It's aninvaluable service to your clients, even if it feels rudimentary to you, Natalie. Good job on your part to recognize that for your customer.
Mark Neild
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Mark Neild Advisor
Empowering quietly creative people to prosper through innovative yet authentic and engaging business models
One of the biggest challenges for SMEs is "not knowing what good looks like". They are blind to the art of the possible finding it incredible that doing a few things a bit differently can yield startlingly better outcomes.
Many SMEs are moderately successful so no burning platform to force them to look at things differently.

Your story is scarily familiar all around the world.
George Parrish
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George Parrish Entrepreneur
Founder/President
Do people solve business problems or does technology solve business problems? Do people use technology tools to solve business problems? Does any company have a ghost of a chance of scaling without ever knowing how to scale? Its inherent. No amount of tools can save anyone from the above scenario in my opinion. Resources can be better spent finding someone who can show this company the way clear of their problems.
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