While retailers understand the importance of customer data and the need to know their customers, most still manage messaging, marketing, merchandising and pricing strategies independently of the impact on individual customer behavior, according to a new study from Aberdeen Group.
This is starting to change as a new generation of business intelligence applications that offer falling prices and more power make it easier for retailers to understand future trends, according to the report titled, “Business Intelligence in Retail Customer Management: Bringing Information Together to Build the Accurate Customer Profile.”
As a result, top-performing companies are accelerating their efforts to establish a tighter control of customer data, with 70 percent of these organizations tracking new production adoption; 100 percent tracking promotion participation and 91 percent tracking product preference or affinity.
The top uses of business intelligence for customer management are: cross-selling and upselling (56 percent); loyalty rewards programs (54 percent); sales analysis (51 percent); to identify and target specific households as potential customers (37 percent); to predict spending patterns (27 percent); for one-to-one marketing (27 percent) and for new customer acquisition (25 percent).
Other key findings from the report include that 82 percent of respondents are using business intelligence on an enterprise-wide basis. However, only 16 percent of all respondents, and 33 percent of best-in-class respondents, use real- or near-real-time measuring techniques for this business intelligence data.
Aberdeen, Boston, surveyed more than 175 individuals between March and November 2006 for the report.