Why is this the case? It reflects a fundamental failing in the reporting systems and structures of most organizations. It reflects a failure to have a true customer-centric mindset, even by many firms that claim to be customer-centric.
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Quality Digest
منبع: https://www.qualitydigest.com/inside/customer-care-article/what-do-you-really-know-about-your-customer-base-081723.html
But how much time have you spent considering that these revenues are generated by customers paying for your products and services? What do you really know about this primary source of your organization’s (inward) operating cash flow?
A customer-base audit is a systematic review of the buying behavior of a firm’s customers, using data captured by its transaction systems. The objective is to provide an understanding of how customers differ in their buying behavior and how their buying behavior evolves over time.
In this excerpt from their book, the authors ask some challenging questions and make the argument that to answer them, you’ll need to conduct your own customer-base audit.
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We agree with the definition of analytics as “the discipline that applies logic and mathematics to data to provide insights for making better decisions.” It’s common to speak of four types of analytics capabilities: descriptive (“What is currently happening or has happened?”); diagnostic (“Why did it happen?”); predictive (“What will happen?”); and prescriptive (“What should we do?”).
As an organizational leader, you’ll be very familiar with your company’s key financial statements and monthly management reports. But what do you really know about the people who pull out their wallets and pay for your products and services? In The Customer-Base Audit: The First Step on the Journey to Customer Centricity (Wharton School Press, 2022), experts Peter Fader, Bruce Hardie, and Michael Ross start you on the path toward really understanding your customers’ buying behavior as well as the health of your overall customer base.
We expect that some people, lurking in various parts of your organization, are conducting the analyses that can provide the answers to some of these questions. But it’s rare to find them being pulled together in one place, let alone making their way to senior management. Without such a basic understanding of the foundations of the behavior of the firm’s primary source of (inward) operating cash flow, how can you be expected to ask the right questions and make informed decisions?
The general view among business leaders is that firms progress from simple (descriptive) to sophisticated (prescriptive) analytics engagement, with the derived value increasing as the firm adopts more sophisticated tools. We disagree with this view. At a time when everyone is caught up in the hype surrounding machine learning and artificial intelligence, and believing that “sophisticated equals better,” the customer-base audit is unashamedly descriptive (and, to a much lesser extent, diagnostic) in its approach. Time and again, we’ve seen how the insights derived from these descriptive analyses can have a profound effect on a firm’s operations.
It’s important to note that we’re not talking about “knowing the customer” through the lens of traditional market research. We’re not interested in the demographic profile of our customers. We’re not interested in their attitudes. We’re interested in understanding their actual buying behavior.
Time and again, we’ve seen how insights derived from these descriptive analyses can have a profound effect on a firm’s operations.
We’re not interested in the demographic profile of our customers. We’re not interested in their attitudes. We’re interested in understanding their actual buying behavior.
Why are firms not undertaking the types of analyses that would answer these questions on a more systematic basis? There are several reasons. First, most managers haven’t been exposed to such analyses. If you have never been exposed to the idea of thinking about the customer as the unit of analysis when analyzing your firm’s revenues and profits, how can you be expected to ask such questions in the first place?
Customer Care
Published: Thursday, August 17, 2023 – 12:03
Excerpted from The Customer-Base Audit: The First Step on the Journey to Customer Centricity, by Peter Fader, Bruce Hardie, and Michael Ross. Reprinted by permission of Wharton School Press.