We know the importance of understanding the economics of customers’ perceptions and behaviour, how they can be influenced and, crucially, how they impact our clients’ businesses.
Many companies invest in analysis that enables them to segment their customer base. But how much of what they learn is useful? Our work with clients suggests that too many businesses build up complicated profiles that tell them little about how customers will react because the focus is on what the business wants to sell rather than what the customer wants to buy.
Companies are also spending increasing time and resources on strategies for developing customer relationships, yet customers are more critical of how they are treated. Customers have long memories and their trust is hard-won. Answers lie in understanding what a relationship is, what makes it work and what makes it falter.
We work closely with our behavioural economics practice to help clients build and develop their customer understanding. This can include:
Embedding the customer in decision-making: We help clients embed real customer-centric thinking into their business. This includes ‘customer plans’, ‘customer in the boardroom’ and ‘customer KPIs’.
Research design: We help clients design consumer research programmes, from carefully specified accompanied shopping trips to annual research plans with multimillion pound budgets. We combine experience of a wide range of statistical and qualitative techniques with commercial knowledge and a thorough understanding of behavioural economics. This makes sure that valuable resources are not wasted on answering the wrong questions or simply revealing the obvious. We often draw on specialist expertise in consumer psychology to make sure that the critical subconscious component in consumer behaviour is identified. We can sometimes understand how customers behave better than they might do themselves!
Consumer segmentation: We conduct consumer research that is not simply demographic but behavioural and perceptual.
Loyalty schemes: We assess the economics, psychology and effectiveness of loyalty schemes, whether designed by our clients or by their competitors.
Real CRM: We develop strategies for getting and keeping customers that are based on what really drives customer loyalty.
Insight capability: We help develop in-house insights teams, from setting out corporate objectives and designing research programmes, to guidance on team structure and skills.
Communicating insights: We realise that turning an understanding of consumer behaviour into effective business decisions requires insights to be shared in a speedy and practical way. We develop reporting systems, business processes and management incentives that get the most out of research and customer data.
Switching analysis: We analyse customer switching between competitors, and assess its root causes.
Spend analysis: We analyse our clients’ customer spending profiles, obtaining usable insights from basket analysis, “wallet share” metrics, cross-sales and up-sales measures, and price response analysis.
Scenario building: We assess the effect of long term consumer trends on markets and build and model possible scenarios.