8 Ways Your Customers Can Give You A Competitive Edge
Entrepreneurship

8 Ways Your Customers Can Give You a Competitive Edge

Keep customers satisfied after the purchase. You may think that once a potential customer becomes an actual customer, your job is done. Not so. Now you have to ensure that the customer will return and (ideally) recommend your company. One of the most effective ways to understand what drives customer loyalty, says Sauro, is to use customer analytics to conduct a key driver analysis. Key drivers are things like quality (Are your products reliable? Do they work as described?) and value (Does your product give buyers the best bang for their buck?), utility (Does your product offer essential features?), and ease of use (Can customers use your features without frustration?).

“A key driver analysis tells you which features or aspects of a product or service have the largest statistical impact on customer loyalty,” notes Sauro. “It can be conducted for all customers but also for each of your different customer segments. At the end, you’ll be able to identify the most popular or unpopular features or aspects of your product or service, and have customers rate that experience as well.”

Identify and reduce bad profits. How does it feel to pay the check at a restaurant where you had terrible service and bad food? Or how about paying $150 to change your airline ticket reservation? In these examples, companies financially benefit from a customer’s negative experiences. However, they’re “bad profits” because they lead to resentment, a decrease in customer loyalty, and eventually, they impact profits negatively.

“Customer analytics can provide an accurate picture of your company’s bad profits,” Sauro says. “Even if you don’t have access to financial data for your company or a competitor, you usually can estimate the percentage of bad profit revenue. For example, when my company measured customers of consumer software products a couple years ago, we found that about 17%  of Adobe Photoshop users were detractors. Assuming everyone pays around the same price for a Photoshop license, some 17% of Adobe’s revenue from Photoshop comes from detractors.”

Find out who your most and least profitable customers are. Some customer segments are more profitable than others. For instance, depending on your industry, you may have “regulars” who do business with you on a weekly basis (or even more frequently) and others you see only once in the proverbial blue moon. But have you ever drilled down on what your regulars may have in common? What’s their age range? Their income level? Their education level? Where do they buy your products: in a store or online?

“Identifying more profitable segments allows you to focus your efforts on keeping these customers happy while increasing their purchases. For instance, maybe you decide to funnel a larger percentage of your marketing budget toward creating advertisements that target millennials after segmenting your customers. What’s more, segmenting can reveal under-served customers for whom specially designed and marketed products or services can be created,” notes Sauro.


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