We live in an highly competitive market, extremely sensitive to changes, with a wide range of offers, in which quality is a basic requirement. These features combined with an extremely well informed and demanding Customer, and therefore more unstable, have the potential to endanger the goal of a long-term company-Customer relationship.
“Each 5 years Companies lose half their Customers”
“It costs 5 to 6 times more to acquire new Customers”
“A unsatisfied Customer will tell 11 people about it.”
“A satisfied Customer will tell 3 people about it.”
As these trends deepens in the market, its crucial to implement optimization policies that will allow to sell, retain and ensure Customer loyalty, maximizing the return on investment and stimulating Customer relationship. A good supporting mechanism to develop those policies is Data Mining, as it allows an identification of patterns and trends for individual Customer's behavior. This type of method uses strategic and tactical database analysis as a tool to promote business strategies, and consequently, is acknowledged as one of the most efficient to bring Customers closer to Companies, increasing business profitability and exploring new opportunities.
Therefore, aligned with the Companies strategies, Data Mining will allow to:
- Identify Customers who consider certain product attractive and capable of fulfilling their needs and expectations – Sale;
- Stimulate Customer relationship with the company trough oriented and exceedingly personalized actions, improving Customer´s engagement throughout its company’s life cycle – Retention;
- Identify beforehand the best Customers that show some motivation to end its relationship with the company, targeting them advantages, in order to dissuade them – Loyalty;
Data Mining is the analytical methodology that helps targeting Marketing efforts, using the knowledge of who are the Customers; which products and services they buy; when, how and why these products are acquired. After knowing who is who and what´s the level of Customer loyalty, Data Mining will be able to act in a progressive way to increase the degree of Customer involvement, improving the efforts of the Marketing actions in acquiring new Customers.
Adopting these optimized and Customer oriented policies, will prepare companies to take actions in any stage of the Customer life cycle. As a result, it will be possible for the Companies to identify and acquire those Customers with lower risk of defaulting and detect and retain those with higher levels of current and future profitability.