Customer Analytics: Developing a Comprehensive Strategy
Customer analytics can be a game-changer for your company. You can uncover profitable insights that move you out in front of your competition, anticipate and meet your customers evolving needs, and improve processes in many areas of your business. But data initiatives don’t usually work out that way. In fact, it’s been reported that over half of them end in failure.
While there are a number of reasons for the failures, Wharton marketing professor Raghu Iyengar says they typically involve tools, talent, and/or metrics. “We’re seeing too many companies focusing on just one area or making mistakes with all three. They’re hiring data scientists before they know what they want them to do, they’re using the wrong tools, or they’re wasting time tracking the wrong information,” he explains.
Iyengar directs Wharton’s new Customer Analytics program, which was designed to help executives avoid these costly missteps and get the most value from their analytics initiatives. Steve Gebhart, CIO of the educational non-profit WVC, said he and his CEO realized before their analytics strategy got off the ground that they wanted to better understand what they were doing and why.
“We hired a consultancy who works with analytics in our field,” says Gebhart. “As we worked through the beginning phases of the project, I realized I didn’t have enough knowledge to guide important decisions and make the most of our investment. I needed to be a more sophisticated consumer if we were going to get what we needed. I wasn’t interested in dabbling with it in a one- or two-day overview. I wanted to make sure I had solid knowledge of all aspect of customer analytics, and that is what I got from the Wharton program.”
Kati Stratos, director of government affairs at Comcast Cable, said she was also wary of conferences and other short programs in analytics. “I was looking to learn the best tools and methods for measuring and predicting consumer behavior. Shorter conferences can cover the theories, but they don’t tell you how to do it. Wharton has the right combination of the theoretical and the tactical, going in depth into the theory, tools, and strategies.”
Iyengar, who also serves as co-director of the Wharton Customer Analytics Initiative (WCAI), says firms that are able to convert their analysis into action are the ones who get the most from their data. “A comprehensive data strategy doesn’t stop with analysis; using the numbers, you need to formulate plans for taking profitable actions. The participants in our program learn how to formulate concrete recommendations based on the data, and how to communicate these recommendations effectively.”
Iyengar notes that while the customer analytics initiatives of companies like Netflix and Amazon are grabbing headlines, firms of all sizes in all industries can create their own strategies. He recently invited leaders in analytics from finance, retail, and gaming to share their experiences with program participants. As they explained what is working — and what isn’t — it was clear that they all faced similar challenges.
Gebhart says the experience made him confident that his company can “significantly nudge up” to firms spending millions on customer analytics. “We don’t have to replicate what they’re doing but by creating our own analytics strategy we will answer many questions, address business challenges, and save hundreds of thousands of dollars because of what I learned.”