How to… use data to boost profit

Although it can be a challenging process, it is crucial to understand your customer data to deliver greater profit, says Rick Pullan.

Understanding masses of customer data, whether for customer relationship management, marketing or insight, can be a significant challenge for businesses.

But it is an important discipline. Navigating customer data and identifying pictures and gaps will help shape a targeted and measurable marketing and communications strategy, which will ultimately deliver more revenue and bottom-line profit than generic campaigns.

This revenue can be achieved by either increasing purchasing frequency and spend from current customers or by increasing new customer spend.

The first step is to refine and segment your database. This can be done by understanding:

• Who the most valuable customers are - whether frequent customers, occasional purchasers, once-only buyers or enquirers
• Where they come from
• What types of people they are
• When they use or buy
• Why they buy and, crucially, why they don't buy, either at all or more often

The lasting benefit of this analysis is that you will have a much clearer understanding of what information to collect from your customers in future.

These questions also work to create trigger programmes for lapsed customers, VIP customers, once-only buyers and referrals. It is critical to building, improving and evolving your marketing to unlock revenue and attract more business from your current customers, as well as more new customers. Your ongoing vision should be: 'more customers (the right ones), buying from you more often'.

Rick Pullan is managing director of True Business Data Activation, a business partner of the Buell Groupwww.buellconsult.co.uk

Unleash the potential of your customer data

Discover who your most valuable customers are and when they buy Analyse your customer transactional data, looking at how recent the visit was, the customer frequency and the value of spend to find out your most profitable customers.

Data should be further segmented by:

• Revenue stream - eg rooms, food and beverage, spa, clubs, events, special offers

• Venue/region

•Channel of booking - eg online, telephone, walk-in or intermediary. A simple reporting dashboard should also be designed so that customer information is easily understood, allowing marketing activity to be adjusted by key segments, such as customer type, value and profitability.

Find out where your customers come from

Analyse your segmented customer data by postcode to define a catchment area. This will help you understand how much business is local and whether there are biases in certain localities.

Get to know your customers and what types of people they are

For leisure visitors, geo-demographic profiling can help you visualise your customers, both their life stage and lifestyle. Companies such as Experian and CACI offer profiling tools to help identify the most relevant consumers.

With classifications for 65 types of consumer household, there will be 10-15 types that are most relevant to your business.

For example, business visitors can be profiled by SIC (standard industry classification) codes and by business analyst Dun & Bradstreet to build a clearer picture of the size and nature of business.

This analysis further benefits your business by improving targeting of communications and helping match the tone and style to increase
customer responses. You can also match your range of services to different customer types and identify specific venues that will appeal to prospective business or leisure customers in particular catchment areas.

Encourage custom

Once you have the who, when, where and what, you can use this information to undertake in-depth quantitative and qualitative surveys to identify why customers buy, why they don't buy, or why they won't visit more often.