Why Comparing the Number of Customers Year Over Year Isn’t Sufficient

By Rob Wood

How well do you know your customers?

Just knowing how many customers you have doesn’t tell you much. Do you have a clear picture of who your customers are and what they care about?

Take, for example, a politician who knows he or she has 10 million voters—but they don’t know the voters’ top concerns. Or, a doctor knowing how many patients she sees every year, yet unable to quantify the top three health issues people see him or her about. Or, a car dealership that sold 5,000 cars last year, but who doesn’t understand their clientele’s demographics.

We could go on, but hopefully you get the picture. Numbers don’t tell you too much without context or a story to go with it. The same goes for growth or decline. You may know you’ve grown, but do you know why? Likewise, do you understand why you may have lost customers this year versus last?

Your customers are more than a number.

Knowing more about your customers—other than how many you have—will become your superpower to better serving them and maintaining a competitive edge. You should be collecting enough data on your customers that you can craft a story about them and have a solid understanding of how they interact with your business. For example, you’ll want to know:

  • What They’re Buying. What specific products or services are they buying? And how much of it are they buying?
  • Frequency. How often are they making a purchase? How often are they engaging with your business, either through your website or visiting your store?
  • Shopping Habits. How are they shopping – in person, via desktop or from their phone?
  • Customer Satisfaction. Do you have an idea of their satisfaction level? For example, have they completed surveys, or can you tell if they’ve referred you to a friend?
  • Marketing Effectiveness. How are they responding to your marketing programs? Do they prefer email marketing versus print ads? How are they interacting with your display campaigns?
  • Their Personas. Can you paint a picture of what your customers may look like? Roughly how old are they? Are they male or female? What do they care about and where do they spend their time?

It’s all about the context.

At a glance, seeing your customer base grow is a good thing. Much like how many marketers view website traffic, it’s an instinctive response to welcome a larger number year-over-year. Growth is a great starting point!

However, without understanding what is driving that growth, or how your customers view you and spend their time (and money) with your business, you might as well be staring at meaningless digits. Make the effort to understand all the complexities behind that year-over-year number so that you can arm yourself with the data you need to make smart decisions and thrive.

Business intelligence dashboards make this ongoing effort painless, since you’re able to collect information, couple it with context, and view it instantly.

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Source:: Business 2 Community

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