Could using more data aid businesses?
More than half of businesses lack a coherent understanding of the habits and preferences of their customers according to research, yet is this down to the approach they take?
A YouGov survey, commissioned by First Data Merchant Solutions, found 42% of SME decision makers rely on their gut feeling rather than statistical analysis and data.
Given the importance of customer relationships to business growth, it is surprising therefore that only 45% of small businesses said they understand their customers.
Using ‘feel’ might aid in some sectors but if businesses are unaware of what they doing rightly or wrongly then it can be difficult to build towards success.
Failing to understand habits and not using data can mean that there is no way of knowing if a promotion, marketing campaign or other business plan is as successful as intended.
Less than a quarter of businesses said they used analytics and data to assess how they interact with customers, with a fifth saying they find it difficult to keep track.
Despite not using data, the majority of firms revealed that they understood the importance of customer service to their operations.
Seven in ten SMEs recognised that poor service could result in a customer walking out of their store while half of those surveyed thought making customers queue for too long would lose sales.
The importance of data is highlighted by the fact that two thirds of customers believe that being targeted wrongly is off-putting.
It means that SMEs should carefully consider their approaches when trying to drive sales, as a promotional campaign could backfire if it is not well thought through.
Not understanding customer habits could lead to lost sales and wasted finances, potentially leaving a firm facing unnecessary risk.
At the extreme end of the scale this could mean company’s struggle to continue trading and are forced to consider insolvency procedures.
Any company that does face these types of issues should seek support as solutions may be available to help them.
It would therefore make sense for businesses to use all data that is available to ensure they are maximising every opportunity that presents itself.
Increased sales are just one benefit that could come from such an approach, provided that firms are willing to act on the information they have.
By Phil Smith