The Leading Edge - Winter 2008 - 6

EVEN IF YOU HAD A HUNcH, NOW THE STATISTIcAL FOUNDATION BAckS YOU UP. IT cHANGES THE TONE OF DIScUSSION. tomer services,” Blair says. “The data captured and monitoring processes feed into next year’s goals, development and strategy.” Mine the data Abhay Padgaonkar, president of Innovative Solutions Consulting, says companies frequently have a lot of information about their clients but those details are rarely in the same place. Each department, perhaps, creates its own view of the data and does not (or is not asked to) share the information. He says a first step to mining data for clientrich information is to collect the data internally so it is all available in the same place. Customer data may be based on gender, industry, region, products or services purchased and more. “It depends on what you’re trying to do or learn in mining the data,” Padgaonkar says. With the data collected, the two greater challenges are the availability of clean (easy to read) data and the set up of the analysis—figuring out the targets and questions that need answering, he explains. Analyzing the data is not that difficult because computer software programs, such as AnswerTree, perform all the calculations. In technical terms, the analysis uses chi-squared statistics to identify optimal splits or segments in the data. It examines all the data elements to find the ones that give the best prediction then repeats the process to split the data into further subgroups. With those results, companies can drill down three or four levels to identify what customers want (or don’t want). “It separates the wheat from the chaff,” Padgaonkar says. “It forces you to ask the right questions in the right context. It’s not just me standing up saying, ‘what’s up in the Northeast?’ People get defensive when you do that. “Data mining legitimizes the questions,” he says. “Even if you had a hunch, now the statistical foundation backs you up. It changes the tone of discussion.” Padgaonkar cautions that data mining is not the end point—it’s really the beginning. Once the analysis has been done, come up with an action plan that focuses on the high priorities Settling for a quicker way usually does not solicit the best information, Blair cautions. “Back up and think about what information is useful to know,” she says. “Ask department and division heads to identify (their client information) needs. Have discussions. Develop the heart of what it is the company needs to know.” Blair, who earned a Ph.D. and is author of “All the Moving Parts: Organizational Change Management,” says companies also should ask what their products or services mean to customers now and what they will mean to customers in the future. She offers several ways to conduct these assessments: • Focus groups give an instant reading on new or even current products. By involving diverse customers (age, race, region, etc.), the company can informally distinguish what aspects interest what demographics or socio-economic categories. • Customer surveys should be written in terms that the clients understand (not the technical jargon used internally by the company). Sending surveys by e-mail have made such solicitation easier and resulted in better responses. However, telephone and on-site surveying allow more specific questions to be asked, more in-depth responses to be offered and a more personal approach. • Interview key clients to dig into what they know. “It’s not something an insider can do. you need to drag the information out of people,” Blair says. “An outside view of a customer base is necessary. Sometimes companies think they’re interacting (well) with customers but they aren’t really.” Companies that conduct research should be prepared to establish ways to use the data collected. “Send it back to the right places such as research & development, human resources, cus- 6 VOLUME 8 n ISSUE 2 n WINTER 2008

The Leading Edge - Winter 2008

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