To answer the simple question ‘How many customers do you have?’ sounds straightforward, but it actually becomes more difficult the bigger your organisation becomes.
Duplicates and bad data hygiene play a part in making the answer less straightforward, but a more fundamental problem is the counting rules that we use to decide who the customer is.
For example in the B2C world, is your customer the household or the individual? If a student, with two addresses for term-time and holiday-time, which do you use? Do you count them twice or once?
The answer is even more complex for B2B businesses. Is it your contact making the purchase or their boss? Is it the finance director? Is it a site or the HQ?
At Blue Sheep we’ve seen many inaccurate and misleading results that can only be resolved when several fundamental definitions are agreed…
Let’s look at an example family, where we have 5 individuals all who exist on your database:
- Mr Alan Example - Father, keen golfer with taste for good wine.
- Mrs Betty Example – Mother, with interest in arts and fine food.
- Miss Jo Example – Daughter aged 19, who is currently at College.
- Mr Andrew Example – Son, 14 and football mad.
- Mrs Jo Smith – Grandmother from mother’s side who lives with family.
In this instance at first glance we have 5 customers, but if we look in more detail there are several key questions:
- Mr Andrew Example is still a child so does this count as a customer?
- Miss Jo Example has bought one product, but subsequently returned it, so does this count as a customer?
- Miss Jo Example lives at two addresses, one during term time and one during the holidays, so is this one or two customers?
- Mrs Jo Smith has only recently moved in so also exists as a customer at another address, so could exist as two customers?
- Mrs Betty Example has been buying products for many years so also exists as Miss Betty Smith, which could increase the count of customers?
So the answer could be anywhere between three and eight, which could make a massive difference to reporting on average spend of customers, penetration reports by geographic location, etc.
As we move into the second half of 2015, information and statistics about the latest digital marketing techniques and Big Data strategies are abundant, with spokespeople of companies citing them on a daily basis. Often with these numerous statistics, all of which are correct, they all depend on how individual brands and organisations are defining the counting rules for determining their customers, what is relevant for one organisation may be totally out of context for another.
The amount of data in Marketing is huge, but without the consolidation of all data streams within the business into a Single Customer View, both the accuracy and value of Big Data strategies will fall. To enable marketing professionals to engage in true 1-2-1 marketing they must define their customer profiles before counting to ensure their statistics provide an accurate measurement – there is no way you can state one of your contacts is a customer if you don’t know what a customer is in the first place! This definition process will help provide more insight into customers and their individual behaviours and preferences to understand the key areas to review when aiming to create a unified view of customers and prospects.
The key to getting to know your customers is to define who your customers are from the outset, what are they buying, where are they buying from, and how much are they spending? All these questions help create a common definition for your customer.
Oxford English dictionary defines a customer as “an individual who is willing to pay a price to acquire a product or service from your business”. As a starting point this definition can be developed in accordance with your business plan to ensure that all other factors are covered to unearth different types of customer.
Once you have an agreed definition of the type of customer, the next critical focus is to understand who the individuals are and their potential value. Big Data can provide a huge depth of insight into your customer’s behaviour; while segmentation, aggregation or in depth customer analytics use structured data to try and achieve the Single Customer View.
By the end of the customer definition process you should meticulously know the wants, wishes and buying behaviours of specific individual customer personas. Knowing a customer in great depth will be crucial to successful personalised marketing communications, resulting in increased business revenue.