I read this wonderful article by Srividya Sridharan of Forrester. Here is her comment:
“Analytics and creativity are seldom used in the same sentence. The natural instinct is to delineate the two as left-brain and right-brain pursuits. Analytics and creative teams speak different languages, use different tools, and find inspiration in different places. Customer Intelligence (CI) professionals are usually closer to the world of analytics. They capture, manage, analyze, and apply heaps of customer data using advanced analytical tools and techniques. But in order for them to step out of a perceived geeky image, CI professionals should think about how to add a dash of creativity into their roles”
I do believe that creativity is critical for analytics to take shape in an organization. Here is the link to her article: http://bit.ly/pUOHkQ
I see it as critical at 3 stages:
1. Building the analysis/model/scorecard-at this stage the need is for creativity about imagining customer behavior. The more creatively one imagines behavior the more impact it will have on the analyst's hypothesis & therefore the derived variables that she creates.
2. In this stage Creativity is about how she should present & visualize her findings. For years advertising agencies have found really creative ways of presenting their "Central ideas". Analysts need to learn from that & make compelling presentations. This almost needs the equivalent of having "Phd's with a personality" in your analyst team!!
3. And finally Analytics folk need to be creative about bringing the result of their analytics closer to the decision making process. The more creatively you embed analytics into the customer path, the more you will see impact!
So creativity is critical, but in my view in multiple dimensions! Strangely here is another thought from Forrester:
This also reminds me about how radically views can change over time. I really liked this Forrester chart which almost predicted the death of creativity & the rise of Left brain rational thinking.
Maybe the “death of the right brain” was a bit exaggerated!
I would love to hear your views about this!!
It is interesting to see the Mobile phone services in India beginning their journey to increase profit per customer! During the last two years, profits and revenues of Indian telecom companies have suffered from a bruising price war that has cut call tariffs to less than one US cent a minute.
But looking at profits per customer does not come easily to most companies. Banks have done it well & so have some casino companies-Royal Bank of Canada & Harrah’s Casino come to mind here!
Also the solution does not lie in “firing some of your customers”. Here is a lovely comment from the Vice Chairman, Royal Bank of Canada:
“There is no such thing as an unprofitable customer. If we can’t make money on the client, then it’s not the client’s fault – we have to change something in the way we operate. We can either charge the customer more, because we have not got the price right or we need to take our costs down or we need to stop selling the product to them and find something more suitable to their need. We try to match up the package to the client so that they are only paying for what they need” Jim Rager, Vice Chairman ,RBC Financial Group
I have seen a Bank in India, practice this strategy very effectively. Here are some observations:
- Start with a simple model of customer profitability or Customer value segmentation. Have different segments of customers; band them from least profitable to most profitable. Analytics can help here but try to keep measurement principles simple.
- Keep the measurement consistent –it need not be the most advanced analytic technique but important to hold it consistently over a 3 year period at least!
- Ensure you link management action to it. Look at why a customer is in the low profitability segment-if it is a bank, ask if the customer is doing too many cash transactions or has not been sold another product. This analysis can lead to clear management action.
- Review customer profitability metrics aggressively. Wouldn’t it be nice if you had a customer level P&L, too much to ask for?