Analytics technology has been changing rapidly and is now the No. 1 technology priority for both CIOs and CFOs, according to Gartner. The reason is clear. Nucleus Research recently released a report revealing that organizations get $10.66 of value for every $1 invested in analytics.
Even nonprofits are recognizing the power of customer analytics and beginning to embrace the practice in an effort to raise donor contributions to pre-recession levels. One such example is the partnering of the American Red Cross with the Wharton Customer Analytics Initiative (WCAI) to develop tools for improving the organization’s outreach efforts.
Major disasters draw donors, and the challenge for the Red Cross, according to Tony DiPasquale, senior director of intelligence for the Red Cross, is to convert the disaster-response donors to ones who support the organization’s mission. According to DiPasquale, in a year following a major disaster, less than 10% of those who give become repeat donors. The goal of the Red Cross’s project with WCAI is to increase that percentage.
The issue facing the Red Cross as well as businesses across the board is sorting through the huge amount of data available. Over the past couple of years, information gathering has become easy; however, managing it is a stumbling block. A recent study conducted by Mark Jeffery, senior lecturer of technology information management at Northwestern University’s Kellogg School of Management, revealed that less than 18% of large firms were using their customer data effectively.
Here are four tips to help organizations get the most value from customer analytics:
1. Analyze what’s most useful and actionable, not just what’s easily available – Demographic data may be readily available, but likely is not an indicator of future behavior.
2. Create a fact-based culture – Now that data is available, minimize the urge to “shoot from the hip.”
3. Empower employees – Get managers more comfortable with analytics, and ask them what data would help them better meet their goals.
4. Trust the data – If the analysis finds something surprising, be willing to change course.
Is your organization collecting customer data? Is it being used to make business decisions? Would your company change strategies if the data revealed the current path is not the best one to achieve the desired results?
Lastly, gathering customer data calls into question the issue of privacy. Organizations that gather and manage customer data should follow the lead of many big companies, such as IBM, General Electric and Apple, all of whom have created senior management positions aimed at managing privacy issues.
-Debbie Dryden
VP, Thought Leadership
