By Timi Olubiyi, Ph.D
As businesses grow, profit maximization takes centre stage with the introduction of new products or services, as management creates new marketing plans, invest in human capital and technology, all for expansion, better returns, and competitive edge.
However, with all these efforts aimed at maximizing profit, the mechanism to survey and gauge customer feedback is most times missing. This is where customer experience comes in, and it falls within the non-financial business performance indicator.
Customer experience is so important, but yet managers of businesses rarely pay attention to it, which is this reason for this awakening. Understanding customer experience is as important as major efforts businesses consider to maximize profits.
Firstly, what do we mean by a non-financial business performance indicator? These are measures that cannot be expressed in monetary units, but are related to product or service quality, customer relationships, operations, and so on. Customer experience a large body of knowledge seen as a significant determinant of business profitability and income.
Fundamentally, customer experience involves every aspect of business offering or operations— from the quality of customer care to patronage pattern, satisfaction, advertisement, the shopping environment, sales, ease of use, as well as availability of the products or services, among others.
That said, one of the most significant elements in helping a business get to know its customers and have a fair idea of patronage and customer experience is data. Invariably customer data can easily be used to gain different insights and in particular help businesses to align with customer goals.
As important as customer experience measure is, management and owners hardly gather and process such data to improve their business performance, and I dare say without mincing words that when well utilized customer experience data can improve the different aspects of business operations, from sales performance to customer growth and profitability.
From observation, poor customer data management practices are not limited to small businesses, because even large firms in Nigeria and indeed Africa are involved, preferring to guess what they see as customer needs and expections without asking and analyzing what their interests are. As a result, the crucial impact of customer data on businesses is rarely considered.
In recent times we have seen businesses introduce new products and services, even have price changes without reaching out to customers to determine their preferences or what types of changes they would like to see, the level of product or service expectations, and if they would be willing to pay more for them. In a market or environment where substitute demands are readily available, businesses must endeavor to do more and consider evaluating customer experience from time to time
In fact, studies have shown that there is a wide gap between the percentages of businesses that make use of customer experience data and those that do not. Businesses incur billions in cost each year on unnecessary expenses. Such companies even make losses due to their inability to easily access the right information to manage customer expectations, and experience which in turn can improve decision making, profitability, and performance.
Additional findings show that businesses rarely gather and evaluate customer data to improve their operations, which is where customer analytics come into the picture, just like the financial metrics, customer experience can serve as a leading indicator to gauge business performance and data. It can provide valuable insights as to its impact on stakeholders, especially customers, and the society.
Customer experience begins the moment they visit an online business platform or physical location, and ends when they choose to no longer use the services offered by that business. Meanwhile, it is important to stress that a good customer experience leads to repeat purchases, patronage, brand loyalty, and positive word of mouth.
As a reminder, in any form of business, the customer is king, consequently, data from them can offer insights and enhance understanding of how well your business is performance, and even help future trend predictions.
Customer analytics, also called customer data analysis, is the process of collecting and analyzing customer data to gain insights into customer behaviour. This can serve as a key indicator for understanding customer preferences, patronage patterns, and profiles, just as it can help better understanding of customers, making smart and informed business decisions. Simply put, it teaches customer engagements and enhances shopping experience, following which business owners and managers should strive to embrace it.
Customer valuableshopping behaviour insights such as buying and demand patterns, shopping trend, spending pattern, request data, time of shopping, time gaps between visits, repurchase pattern, preferences, peak shopping hours, and so on can be analyzed. For business operators, particularly young entrepreneurs and solopreneurs, it is not sufficient to post an update on social media or WhatsApp status about your services or products, data gathering and simple analysis of feedbacks can help grow the small business.
For large firms, it can help the process of making key business decisions, increase customer retention, predict customer behaviours, help understand customer choices per time, product choices, and loyal customer tracking. In fact smarter decisions can be made by any form of business, either large or small by adopting a data-driven approach to operations and customer experience.
As such, it is important to have a system that gathers data on customers to improve business performance.
So, to succeed in an unpredictable environment like ours, businesses must seek opportunities to understand customer experiences and get feedbacks from time to time for a smooth competitive advantage. More so, businesses need to have a process to continually analyze trends concerning actions, reactions, and transactions in their businesses for ease of forecasting and predictions.
A few leading companies, including as big as Google and Facebook Inc, with billions of users, they adopt customer analytics for improved performance. So, why will a business with a manageable size of customers not join the trend to keep customers and avoid them switching to competitors.
In conclusion, business software and customer data analysis tools with trend analysis is one major helpful way to analyze customer experience and behaviour over a defined period that can generate valuable insights. This can be gathered through multiple interaction channels such as website visits, social media engagements (comments, likes, and shares), visit patterns (buying, spending, and needs), and payment history. A better customer analytic is good for businesses in both the short-term and long term, because it will improve customer experience and give valuable predictive insights, which can lead to more sales, more loyalty, and in the end a healthy and profitable business. Good luck!
About the author: Olubiyi, an Entrepreneurship & Business Management expert obtained his Ph.D. in Business Administration from Babcock University, Nigeria. He is a prolific investment coach, seasoned scholar, Member of the Chartered Institute for Securities & Investment (CISI), and Securities & Exchange Commission (SEC) registered capital market operator. He can be reached via @drtimiolubiyi and email: email@example.com, for any questions, reactions, and comments.