Business Analytics Common Sense Cornerstone
#1:
What people do says more than what they say.
Business analytics clearly reveals the true nature of your business operations and your customers because it uses the data you already have -- data unique to your specific business, customers and products. Shows you how your business really works -- which reveals growth opportunities and cost savings that conventional thinking usually misses. Because business analytics is based only upon data, it is objective -- and avoids the distortions that result form assumptions, guesswork, habits, emotions and "conventional wisdom."
Business Analytics Common
Sense Cornerstone #2:
Past behavior is the best predictor of future behavior.
This is true for almost everything, but especially true for customers and their buying behaviors. It is true for retail and B-to-C companies, but even more true for manufacturers, distributors and other B-to-B companies. When we clearly understand how a customer has behaved in the past, we can reliably predict how they will behave in the future. Both people and companies are creatures of habit.
Business Analytics Common Sense Cornerstone
#3:
Not
all customers are equal.
It is foolish to imagine that all customers are alike! There is no such thing as an "average customer." Vilfredo Pareto (a 19th-century Italian economist) observed that 80% of nearly anything comes from only 20% of the population. In the face of today's challenging economy, it is even more important to know -- and nurture -- the 20% of your customers that generate 80% of your profits!
Business Analytics Common Sense Cornerstone
#4:
Keeping customers
is more important than getting customers.
It is at least six times easier -- and far more profitable -- to keep a customer from leaving than it is to encourage a prospect to become a new customer. And, customers more often "drift away" slowly than leave suddenly. (This is especially true for B-to-B companies.) By carefully tracking the purchasing behavior of each customer, business analytics can help identify customers who are "moving towards the back door" in time for you to retain them.
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