Blog Credit: Pamela Pierce, December 7, 2022 (5 Ways to Extract Serious Value from Your Transactional Data | NetSuite)
Leverage your historical ERP data to uncover insights that generate value for your customer and business
Business data abounds, but are you taking full advantage? The average small-to-midsize business owns nearly 50 terabytes of data — but most goes underutilized. That translates to lost insights that could have improved your productivity and product quality while mitigating risk. Perhaps most importantly, you’re missing out on invaluable information about how your customers are evolving.
By analyzing historical transactional data, you’ll uncover customer details and purchase trends that help drive sales efficiency and higher marketing conversion rates. You’ll be able to create personalized buying journeys that reduce churn and validate product feature appeal. Ultimately, this analysis helps build strong customer-brand relationships.
The business value is unmistakable: Bain & Co. finds that retaining just 5% more customers can increase profits by more than 25%.
The Value of Past Data to Today’s Business
Historical ERP data tracks your company’s past transactional activity with details on your customers, products, suppliers, and operational performance. It explains the how and why of today’s financial statement figures. Retaining this data is legally required by auditors, investors, and industry regulators. The IRS, for example, requires that data relating to tax filings be kept for up to seven years, and the SEC wants information held for up to six years after an account is closed.
While retaining historical business transaction data is required, managing it can be a challenge. As your company grows, data may be trapped in legacy systems accessible only by authorized employees, to ensure its security. This makes access challenging for yearly audits or to recover records in the event of a malware attack or other incident. Difficult-to-access data can’t easily be used for ongoing strategic analysis.
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What happens when you make decisions without multifaceted data?
- Customer service agents are providing service recommendations without purchase history records, leading to frustrated clients.
- Procurement teams may award a contract to a low-cost supplier whose components have a poor long-term reliability record.
- Product teams may launch a new product that’s similar to a line that performed poorly in the past.
- Finance is setting revenue estimates on the current pipeline without considering past cycle performance.
“62% of SMB data will reside in the cloud by the end of 2022.” — Flexera
5 Ways a Cloud Data Warehouse Will Benefit Your Business
Here are five ways to gain value from all your data, better understand and serve your customers, and improve your bottom line.
1. Boost business insights and productivity through centralized data analysis.
A cloud data warehouse delivers centralized access to business data by consolidating historical and current transactional data, as well as insights from your ecommerce, CRM, and website traffic. Having managed access to relevant data at any time, from anywhere and any device, enables all employees to find timely insights to improve operational performance and better serve your customers.
Decision-making is faster and more effective when everyone operates from the same business facts. Analytics systems help confirm the known and uncover what was not known, with multidimensional reporting that drills through current and historical transaction detail. Visualizations display patterns and trends for guidance on next steps.
Decision-making is faster and more effective with centralized business access to all relevant data.
2. Identify the key characteristics of your most profitable customers.
Happy repeat customers are the engine that drives a successful business. CFOs know these loyal customers commonly generate 65% of revenue, are 50% more likely to purchase than a new customer, and typically spend about 33% more than infrequent buyers. They’re most likely to talk with their friends
You can convert your data into a strategic and competitive advantage by segmenting data on these core customers. By combining behavioral, engagement, and transactional data — current and historical — in a cloud data warehouse you can identify unique characteristics of these customers that would otherwise be difficult to see. Consolidating relevant datasets in a cloud data warehouse lets you identify data patterns that build a multidimensional profile of who they are, why they bought then and now, and how you acquired them. With a solid profile of core customers in hand, businesses can build unique offerings that continually delight these key buyers.
Instead of exploding your customer acquisition costs to acquire fickle buyers who delay purchase decisions and demand discounts, focus on those who are consistently the first to buy your latest offering, at premium price, and ready to tell you what they like and don’t like about it.
Loyal customers drive profitability and sustainable growth.
- Product teams can prioritize roadmap fixes and enhancements based on loyal-customer adoption metrics and feedback.
- Sales can improve conversion rates with more targeted pitches and better timing.
- Marketing can drive demand with personalized messaging in key customers’ preferred channels.
- Finance can set optimal pricing by measuring revenue potential from loyal buyers.
Loyal customers are your cash flow drivers and innovation partners.
“Companies that focus on building loyal relationships that by their very nature keep costs to a minimum are far better positioned to remain strong in the face of market turbulence.” — Bain & Company
3. Drive customer retention with strategies based on historical, multi-year analyses.
Building relationships with customers and delivering consistent, personalized offerings drives retention and predictable recurring revenue. Now that you’ve identified your loyal, profit-generating customers, leverage insights from historical data to uncover new ways to keep them happy and expand customer lifetime value (CLV).
CLV is another key cash flow driver that smart CFOs focus on. Understand this segment’s purchase behavior by creating multi-year time trend analyses of your historical and current transactional and service data, tracking what they bought and didn’t buy, and how they used it and didn’t use it.
You can also learn why you lost a valued customer or customer segment by creating root-cause analyses, identifying any causal factor(s) that contributed to churn. Was it quality, delivery, change in lifestyle or business model, a competitor, or something else? Analysis of these factors will guide efforts to strengthen existing relationships, personalize customer journeys, and win back lost business.
- Product teams can craft enhancements that differentiate your offerings and drive retention.
- Marketing can create loyalty programs and win-back campaigns.
- Sales can determine what’s most relevant to cross-sell success and when to reach out.
- Customer service can deliver personalized service and recommendations.
- Finance can review data and adjust funding so marketing and sales can best meet plan numbers.
Customer retention strategies drive predictable, recurring revenue in a turbulent market.
“Leaders recognize that they should manage their businesses to maximize the value of the customer base … they organize the business around customer needs.” — Harvard Business Review
# 4: Forecast trends and create opportunities with predictive analytics from consolidated data.
Predictive analytics can be a powerful equalizer for small and midsize businesses looking to compete with enterprises. Anticipating the direction of customer demand and understanding what’s driving it can reap tremendous value for you and your clientele.
As your business grows and creates historical records, that along with data from current transactional, custom, and other relevant sources feed machine learning models. The result: insights and visualizations your competitors cannot replicate or see. The more complete portrayal of your business from historical and varied data, the stronger your confidence in forecasts that serve as a crystal ball into where the market is going.
- Product can see the unfulfilled customer needs and market opportunities to build toward.
- Procurement can negotiate more favorable terms for materials needed for new products.
- Marketing and sales can prepare offerings personalized to loyalist future needs.
- Partners can act on market openings by combining strengths.
- Finance can forecast revenue with greater accuracy by combining historical data with predictive analytics.
Businesses can derive long-term value from the lessons within historical data to improve the quality of decision-making and gain a competitive advantage.
5. Reduce the cost involved in achieving all these benefits by migrating historical data to the cloud.
A cloud data warehouse simplifies data management by conveniently and affordably storing business data from current and legacy systems. Your data is kept secure, is accessible from anywhere, and you pay only for what you use. Data integrity is monitored and managed by the provider, so you can redirect spending away from legacy systems — including infrastructure maintenance and specialists’ time managing systems — to more important activities.
A cloud-based data warehouse helps satisfy compliance regulations and in-house retention policies and will be welcomed by auditors, regulators, and investors. Data security is managed by the provider, which actively researches and prevents new attacks, expertly monitors systems, and encrypts data, keeping it safe and secure.
A cloud data warehouse is an affordable way to securely retain data and leverage its value.
NetSuite Analytics Warehouse
NetSuite Analytics Warehouse is a cloud data warehouse and advanced analytics tool packaged as one solution. It simplifies data management by consolidating all business data — NetSuite transactional, historical, and other popular sources — through supplied connectors that minimize installation costs and speed adoption.
Decision-makers see immediate insights from their data thanks to an array of prebuilt dashboards and reports. Drive action or customize to need with intuitive drag-and-drop interface. Predictive analytics generate insights for teams throughout the value chain so you can better anticipate and capitalize on market change.
Netsuite Analytics Warehouse is designed to automate and accelerate the path to trusted, valued insights across the business. The result? Decision-making that drives operational efficiency, better productivity, and discovery of new revenue streams.
A good business intelligence strategy begins with centralizing all your data. But do you build or buy a data warehouse? Download our Business Guide to learn the pros and cons.