Reality: Most businesses believe they know from experience what their market wants, but new data and analytics technologies can provide hard facts on what customers really expect, requiring a rethink in approach.
Following gut instinct has been an extremely successful strategy for some enterprises, with many long-standing businesses built off the back of an accurately perceived ‘gap in the market’, and catering to a ready supply of customers in need of that service.
But feelings and intuition won’t necessarily be enough to handle the rapid transformation the market is experiencing in the technology age, says Michel Alf, Director, KPMG Enterprise.
“Trends, tastes and functionalities are changing so quickly that it’s hard to keep up,” Alf says. “The greatest challenge is the rate of change. Even 10 or 20 years of experience won’t help much when something completely new and different comes along.”
Many enterprises are biased towards supporting the instincts and beliefs that served them well in the past, making them less open to exploring new ideas or practices, says Brad Miller, Partner, KPMG Enterprise.
However, he says those that rely on this approach will soon be outpaced by competitors who use data and analytics technology to understand their customers, and are equipped to meet shifting customer demands and market circumstances.
“Companies that were previously not competitors may become so through disruption or expansion,” he says. “If they can generate the insights to meet customer behaviours – that creates a big risk to you.”
Some enterprises don’t have a method for tracking how the demands of their customers are changing, Miller says, putting them at a clear disadvantage.
The key is customer centricity: using customers as an agent for change, finding out what you can about them, and letting them tell you what is required, he explains.
“It starts with much stronger collaboration with your customers. It involves using data, but it can be in all forms and shapes, including customer roundtables and surveys.”
While getting data savvy on your customers is vital, it doesn’t need to be a major financial investment, Miller says. Instead, look deeper into what you are already collecting.
“Get another perspective on your existing data. What can you learn from what you have already, opposed to your own intuition or gut feel?”
Miller says that in addition to internal data, there is a raft of external information to draw upon, which could provide insights into consumer trends, demographic shifts, new developments, and other issues that could impact your business.
“What is becoming more prevalent is the amount of information you can source from other companies or public domain sources,” he says.
With a wealth of information available at your fingertips, the next step is to use it to support your decision making.
Alf suggests asking one question before making a decision: what data backs it up?
“Just looking at the different angles, challenging the information and the sources of data drives a shift in mindset. People will become accustomed to gathering and analysing data, as well as thinking outside the box to discover what information they can draw upon to bring into the decision process,” he says.
It’s important to foster a culture of curiosity throughout the enterprise, Miller says.
“If you can create that culture, it starts an easier process of thinking about, what data do I have already, what data would I like to have, and how am I going to get it?”
Shifting from gut feel to facts not only makes your enterprise more insightful and competitive, but can help with profitability, Alf adds.
“You can use data to segment the profitability of products in certain areas. You can invest more into one area and make an impact. Having that deeper understanding, and not just looking at the information on an aggregated level, is a relatively easy first step.”
When getting into data and analytics it’s easy to think you need to capture everything, but it’s more vital to ask the right questions. Find out more in: Myth: When measuring data, size is always better.