Know your customer is a very known acronym in the finance world, and it makes sense from a regulatory standpoint. However the concept can and should be extended to any other business and it should be a common practice for any company that is looking to grow and generate more profits. From a business stand point it is very important, leave the regulatory and compliance topic on the side.
Lets add in some context. You own a small coffee shop and because you serve mostly the same customers you get to know them over time and this of course helps create certain familiarity and increase the lifetime value of your clientele. However, were this to change, either by having new customers, by adding some tables or opening another branch then it would be simply impossible to keep up. You could of course say that you have no desire for new customers, in that case, good luck on your lifestyle business, but usually companies are looking for ways to grow.
So creating a database, keeping track of your customer purchases and therefore its manifested preferences and using that information in an effective way will allow you to learn faster and better, to personalize the strong black coffee and the no mayo sandwich but that one customer before the usually slow process of repetition and observation by the one who serves the customer, that way is very time consuming given that these client facing roles tend to have high rotation and that makes you start all over again.
Your caffeinated clientele will usually have a bit more coffee, and probably a bit earlier during winter but not during weekends, that of course can be noted by mere observation however that can also be communicated by a dashing visualization that can be combined with a numerical calculation that can be very helpful in taking action so you can adjust capacity, start earlier, try different ways to have the coffee ready and get faster and better feedback on every new attempt.
It is not that data is the only way to know your customer, but it is certainly the best way as it allows you to get the best information in a faster way that can actually help you take tangible action in any part of the business. You could change the seating, try a common table in the middle of the shop so people can gather, put on a walk-by stand on the street, combine the coffee with cookies of different types and measure what is actually working better, adapt faster and keep up with the times.
The same thing can be said of summer, as the heat comes in some customers may be looking for some fresher drinks than a hot coffee, the context changes of course but the process remains basically the same. You gather the data, you put it in a nice dashboard so you can communicate it to your team and then you go into more detail and evaluate your options and the result of your past actions.
Needless to say, it is rare to have these data skills, the good thing is that you don’t have to do much else than teaming up with DaTeam to add a data analytics team to your organization.