Every industry has its own tried and tested methods of bringing new customers.
Companies usually use either a push strategy or a pull strategy to bring in new customers. A push strategy involves pushing the product to the retailers and incentivising them to sell the product. Heavy discounts, non-monetary rewards and other incentives are provided to retailers to motivate them to sell more. A pull strategy involves companies trying to get customers interested in their product through advertising on ATL channels. So far, a combination of these two strategies has proven to be effective in many industries.
But, this method is fast becoming obsolete with the increasing penetration of internet and digital media in India.
Changing customer journey in the digital economy
With the internet at their fingertips, customers are more than ever, aware of the product they are considering. They judge a product by understanding –
- What their friends/family say about it on social media
- How it compares to similar products (from a quick online search)
- How is the post-sale service and customer experience management
- How fast is the company responding to and clearing issues on social media
Given the new customer behavior, it has become essential for every brand to maintain a strong online presence. Brands need to be quick in handling queries/issues on social media.
Brands can also reach out to their customers and prospects to understand their needs and get feedback. Tools such as online surveys help brands assess customer needs.
Role of business analytics in customer acquisition
The role of analytics in increasing customer acquisition is set to grow rapidly. Using analytics, companies can increase and manage their sales scientifically. For that, companies need to start capturing customer KYC. Yet, very few companies have started doing that.
Most big retail companies in India capture customer details only if it is part of a loyalty or rewards program. But the adoption of loyalty programs is merely 10-15% in India. This means most companies don’t know 90% of its customers.
Banking and Telecom are the only 2 industries which collect customer KYC. But even there, the full potential of customer’s information for data mining and business intelligence has not been reached.
Banking companies are huge conglomerates, with more than a few dozen divisions spread over many locations. More often than not, data between different departments is not synchronized. Each bank vertical operates in a silo. There is no single customer view – due to which potential cross-selling opportunities are being lost. For example, a customer availing travel insurance may be interested in a credit card that gives him lounge facilities. If there was a single view of the customer, then the lifetime value of every customer would increase rapidly.
Telecom companies are better at using customer information than their banking counterparts. But there is still room for improvement.
Based on the Net Promoter Score, telecom companies should identify markets where sentiment is positive. These markets should then be targeted to increase gross acquisition share.
These companies also target areas where the gross share is lower than the base share. This can then be combined with population data from census to understand whether there is an opportunity or not.
In the same way, they can look at places where gross share has been constant but actual sales volume has dropped. When new operators come in, their gross share would be understated if they have more on-net calls. These places need to be targeted for accelerating gross share. Factors like payback, contribution to high value and residue need to be analyzed to maximize acquisition and allot funds.
The traditional Telecom acquisition approach was to:
- Manage the retailer
- Track the quantity and quality of acquisition.
But now that approach needs more analytical layers:
- Are the telecom operators playing screen size game?
- Are the sims getting utilized for IOT (Internet of Things) game?
- As more devices get connected, can telecom operators be there to support this growth?
- Can telecom operators tie up with white goods manufacturers and automobile players to be part of the IOT journey?
Focusing on the answers to these questions would increase customer lifetime value and open up new avenues for revenue. The time to invest in understanding your customer is now!