Big Data, CEM and Customer Loyalty- A Key To Profitability

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Big Data, CEM and Customer Loyalty- A Key To ProfitabilityWhile the title of this article is intuitive, repeat customers (loyal) are make or break for most companies. While there are some companies whose strategies and margins are based on a transactional model with no anticipation of repeat business, most companies depend on repeat business relationships to provide revenue and profitability. On the flip-side, declining loyalty can be the coup de grace.

Consider the results from this Banking Industry study done in 2006

Indeed most companies survey their customers by measuring levels of satisfaction. (For example, “on a scale of 1 to 5 rate your level of satisfaction. 1=poor; 5=extremely”). However, to develop customer loyalty requires much more than measuring levels of satisfaction. In fact, customers must be “amazed and delighted” by the customer experience. Not just once, but every time. With the advent of Big Data and Mobile platforms such as social media, Customer Experience Management (CEM) software is starting to come to market, usually as a Software as a Service (SaaS) application.

These new applications allow managers to gather-24/7 and on any platform- detailed customer survey data in multiple ways such as social media, internet reviews, competitive analysis, mobile device surveys, etc. One of the key goals of monitoring and improving the customer experience is defining the “dissatisfiers” and being proactive to remedy those problem areas. Moreover, customized and well thought-out survey questions can help home in on those aspects of a business that differentiate excellence and promote repeat business.

While the CEM program is an evolution of the CRM, many of the large ERP providers such as SAP and Oracle are snapping up small developers of CEM programs to “bolt-on” to their suite of solutions. Given the importance of developing loyal customers and its direct impact on profitability, it’s no wonder.

Many advocates of Big Data feel that the ability to gather a deeper understanding of what makes customers do what they do is the real end-game for Big Data. While there are those who feel that employing Big Data solutions to dig deeply into the behavior of customers may be an intrusion into privacy, consider how Big Data gained knowledge can aid consumers. Indeed, intelligence gathered about product preferences on a worldwide basis would be a huge advantage for consumers when making purchasing decisions. Today, most product knowledge is provided by self-serving corporate marketing.

Since the advent of the human commerce, developing customer loyalty has been the objective of every business. But how to go about achieving that status is mainly anecdotal and intuitive. Now, objective data gathered from a matrix of sources can help refine those key elements that certain customers feel (consciously or subconsciously) as a reason to keep coming back as well as referring new customers.

 

Additional Reading

Customer Experience Management (CEM)-The New Necessity?

Customer Satisfaction and Loyalty – Not Always Hand in Hand

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