How Customers Behave: Using Data to Drive Innovation, Development & Digital Strategy
It would shock very few people (if any) to say that the rise of all things digital has completely transformed the way we as a society interact, communicate, and conduct business. The biggest transformation has been among consumers. Potential buyers, armed with mobile devices like smartphones and tablets are able to shop, compare, and review products and services all while on the go.
The growing mobile trend is also driving new business strategies. In order to stay in front of these digital consumers, many businesses have quickly jumped onto the mobile bandwagon. Despite their good intentions, however, many business leaders are learning that simply embracing mobile isn’t enough and that in a successful strategy, many go to market implications must be considered; going mobile is just the first of many steps. Additionally, success is often also dependent on the ability to change long-standing ways of thinking and embracing new, agile business models.
In order to reap the full rewards of the new mobile consumer, it’s essential to have a deep and comprehensive understanding of the various consumer personas, needs, and behaviors that are driving your business. This knowledge provides valuable insight and the ability to tap into the right formats, platforms, operating systems, etc.
In a recent article discussing the importance of understanding today’s digital consumers, management consulting firm McKinsey & Company stated, “…understanding and acting on the probable contours of change requires reflection and a deep knowledge of customer behavior, industry dynamics, and feedback loops. These insights can help players reshape their business models to exploit structural changes and cushion potential shocks.”
Some organizations may think that understanding customer behavior can be seen in the large-scale trends and generalities. While true to a point, McKinsey points out that more often than not, “small groups of users (often overlooked in cursory analyses) actually drive the economics.”
The best way to obtain a detailed understanding of how consumers behave is through harnessing big data. By segmenting consumers according to their demographics, household characteristics, usage patterns, spending, attitudes, and needs, big data provides the level of granular insight needed to understand consumer behavior and posture your organization accordingly. The bottom line, according to McKinsey, is “that to extract value in a rapidly changing space, companies must not only focus on the fraction of users who drive the economics but also simultaneously build a diversity of business models to address the broader audience.”
According to Forbes, companies using big data and analytics are five to six times more profitable than their peers. Additionally, companies that put data at the center of the marketing and sales decisions improve their marketing return on investment (MROI) by 15 – 20 percent.
While these figures seem surprising at first glance, they become clearer when we consider that companies using big data are more successful because they have a better and deeper understanding of their customers’ needs and behavior, as well as the insight to identify new, profitable opportunities. These are the companies that will continue to grow and gain marketshare.