Tag Archives: customer

Important Customer Data

Posted on by Uğur Özmen

One of the first assignments I gave to those who attended the CRM course in the MBA program at Istanbul Bilgi University is as follows:

For the sector you choose please specify the 5 most important data and why it is needed:

Apart from

      • Name and surname
      • Age (or Date of Birth)
      • Gender
      • Job
      • Education
      • Address / place of residence
      • GSM number / e-mail address
      • Income

Apart from those, you will briefly explain what the 5 most important data that can be obtained are and why they are important.

Important points:
When I say the 5 most important data that are OBTAINABLE, if the income or salary information of the gas purchaser will not be disclosed when asked and if you write “income is important”, the homework will be considered incomplete.

Unfortunately, some MBA participants focus only on promotion (hence communication) in studies for various sectors:

  • E-mail address: It is used to transmit all kinds of information and campaign news to the customer.
  • Phone number: It is used to transmit all kinds of information and campaign news to the customer.
  • TR ID: Used to unify customers in a customer-focused database.
  • The credit cards they use: They are used to organize campaigns with banks.
  • Marital status / Number of households: It is used to know who we can make customers except himself.
  • Media preferences: Used to position the customer’s preferred media space for marketing efforts

I doubt some of these are even ‘available’ for many industries. How many people say their “marital status” or “media preferences” when buying air tickets.

However, it is necessary to focus on the information required to get to know the customer better and thus increase the lifetime value of the customer, not on promotion.

Let’s give examples from a few different sectors:

The good and bad examples in the article are compiled from the homework of MBA participants. I thank those who prepared good examples.

Airline:

  • Flight frequency
  • Frequent destinations
  • Departure place (does it always leave the same place?)
  • Total expenditure per year
  • Preferred class (Economic, Business, etc.)
  • Ticket time (last minute, discounted offers, early booking, etc.)
  • Is it through agency or personally?
  • Is he alone or flying with someone with the same last name?

Note:
There are many participants who write

  • Travel purpose
  • Job

However, we cannot know them either. It is also unlikely that we will ask every customer and expect a response. We may need to interprete over other information if it is very important to us.

“From what information do I deduce that there is a business trip?” We can ask ourselves and add that information to this list.

Gym:

  • Expectations from Exercise: Weight loss / gain, fit in a bikini and wedding dress, fit body and healthy life, socialization, etc.
  • Time to Spend for Sports: How many days & hours per week and hours of arrival
  • The Sports Branch he / she wants to focus on: Fitness, swimming, group work, etc.
  • Health Status: Is there any obstacle to doing sports? Should he exercise for a specific reason?
  • Sports Background: How many years, what sports
  • Break Activities: How to use the training breaks; magazine, TV, music, chat…
  • Private trainer / Group work preference: Do you work with a trainer, prefer group work, or work alone?

In airline,  “Why are you traveling? Work or vacation? ” you cannot ask or you cannot get the answers. However, those who come to the gym often tell why they came.

GSM Operator:

  • Invoice amount: Cost-benefit analysis is needed to provide more reasonable offers and / or to estimate the level of income.
  • Air time and number of SMS: It is necessary to get an insight of why the customer’s preferences are phone calls or SMS and to offer better offers accordingly. It helps us learn how much of his/her time she/he spends on the phone in one way or another.
  • With / without Internet: Opportunity to cross-sell to customers based on Internet usage; online campaign offers; It is necessary to learn the most frequently used internet platforms.
  • Hours of use: The hours when the customer is busy, what hours of the day, with whom he talks
  • Numbers he speaks frequently: We can create special packages among our customers with certain numbers.
  • Phone brand: We need this information as the packages offered by the operator may vary depending on the nature of the devices. Device replacement speed also gives an idea of ​​the customer’s level of income or spending.
  • Voyage to abroad: It will be advantageous to know how often the customer visits abroad in order to avoid surprise invoices. It will allow us to provide information in advance.
  • Churn exists or not: Whether it comes from other operators, for how many years it has received service from the same institution.
  • Customer request / complaint status: It is important for behavior management towards the customer how many “problems” were opened to the customer, how many requests or complaints he made from which channels until today. What are the status of his complaints (open, solved, closed, etc.)
  • Places where he frequently speaks: School / courthouse / hospital / shopping mall / airport etc. This information is needed to make special offers using the locations where the customer is at that time.
  • Packages used: family pack, school pack, fan pack, tariffs, etc …
  • Value-added services: vehicle tracking, lost-stolen insurance, etc…
  • Sensitivity to campaigns: Personal data can be used more, it can increase income through agreements with business partners.
  • In corporate (B2B) agreements, how many people will enter the system at the same time, possible income can be estimated according to their demographic data.

I know there are more than 5 examples for each industry. Any 5 of them are considered TRUE – including other important information I couldn’t think of.

If you don’t have this information, it won’t work well, even if you have full contact information. If you do not know the customer, you can only send spam messages.

You suggest me shampoo [1] , hair curler, breast lift bra, pink face mask [2], best places to go with my deceased mother in Mothers’ Day, gifts I can buy for my deceased father for Fathers’ Day.

Your industry or homework topic may not be an airline or a gym or a GSM operator. However, by looking at the examples above, you can find out what the important information is in whatever industry you are in. You should be able to parse the “important information” that is valid even in hosting or electricity distribution companies that are thought to have a single product.

There is another important issue…

The third (or fourth) assignment of the semester is mostly on breakdowns used for segmentation. If you noticed, those who did the first task correctly actually did the third task as well.

Operational Definition of the Customer

Posted on by Uğur Özmen

The definition of the customer should enable to answer the following specific questions like

  • How many active customers do we have?
  • How many customers we are about to lose?

Definition should enable to extract the accurate customers list – such as following examples –  from customer database via queries 

  • We have 3689 active customers.
  • If they (the customers) do not make this (any defined) transaction or not show up for more than 3 weeks we will lose 231 customers

Please notice that, in this assignment, our purpose is not to define the “target audience” of advertising agencies, but a FUNCTIONAL “measurable / operational” definition of customer for the selected sector.

In other words, I expect a measurable and comparable definition of customer such as

  • The person who buys gasoline from our station at least twice a month is our customer. However  the person who buys time to time from us while passing close to our station and stop by chance is not going to be considered our customer.   

The customer should be defined in such a way after querying from data warehouse the following groups of customers can be identified.

  • Active customer
  • Inactive customer
  • Lost customer

Thus, you can distinguish between valuable customers from the rest of the customers. These functional definitions are also essential if the purpose is to regain the lost customer. For example; by utilizing the measurable definition of the customer, when the customers who formerly defined as active customer became inactive customers it will be easy to identify those inactive customer and the target who are intended to be regained can be clearly identified. 

Important note: Those definitions should be “mutually exclusive and collectively exhaustive”. It means, their union must cover all the events, but no more than one event can occur at a given time. Just like puzzle, all pieces together form the complete picture and any of the pieces are not overlapping.

Once someone became a customer, she/he (on an institution) is either active or inactive or lost customer or some other cluster (such as pass through customer) . An area between them should not exist.

Please watch the following funny video to see how operational definition is important.  https://www.youtube.com/watch?v=cDA3_5982h8

Who is the customer?

Posted on by Uğur Özmen

One of the most important steps of a CRM study is defining the customer. Without measurably describing the customer, the CRM project should not start. Therefore, I ask every company which I am consulting: “Who do you think is your customer?“

Sometimes my question is perceived as a strange or a silly question. For example one of a hotel boss confidently answered my question: “We prefer to say guests, not customers. And everyone who stays in our hotel is our guest.”

This sentence makes me wonder, “You say so, but does he really feel himself a guest?”

When I hear a sentence with “everyone” in, I reply: “Do you think there is a difference between guest and customer?”

The answer is almost same as a cliche: “Everyonewho stays in our hotel is our guest.”

Ugur Özmen: “So do you mean that there no difference between customer and guest?”

Hotel Boss: “There is no difference between them. Everyone staying in our hotel is our guest. “

U.Ö.: Anyone staying at your hotel? (If you are wondering why I repeat each question 2 times, just wait for a second.)

H.B.: Yes, absolutely everyone. “

U.Ö.: Okay. Let’s proceed by assuming this definition is correct. Who is a lost customer for you? (Notice that, I don’t use the word “guest”.)

H.B.: “Those who have been to our hotel before but never came back again within the last 3 years can be defined as our lost customers. “

U.Ö.: “Okay. Let’s assume this definition is correct. You are examining a customer and see that, he came to your hotel for 5 years in a row and stayed for 2-3 days at each arrival. However he doesn’t show up for the last 3 years.”

H.B.: “Yeah, then we could say it’s lost.”

U.Ö.: “Suppose you reach that customer. You asked why he didn’t visit your hotel in last three years and his answer is; “Our company was holding dealer and agency meetings in your hotel. I was attending to those dealers meeting. I am no longer the dealer or agent of that company. That’s why I’m not coming to your hotel” he says. Will you try to get him back?

😉

Let me create another scenario. The customer has come a few years ago. Still not visible for the last 3 years. You reach him. 16 year old teenager. You ask why he hasn’t come for 3 years. “I used to take a vacation with my parents before. Now I’m going on vacation alone or with my friends” he says. You insist, “My father paid for it before. Now instead of paying you that money, I would go on an interrail tour of Europe”. How do you get him back? Are you going to say, “Don’t break your family ties, they must be missing going on vacation with you, join them“?

Now review your customer description once again. Anyone staying in your hotel can be your guest, but some of your guests are not customers. Some have even come to your hotel for years but have never been your customers.

If you are managing an accommodation facility, ask yourself. Who is your customer? Is it the person or companies which organize meetings at your hotel or the one who makes the reservation, or the one who pays the money?

🙂