Unstructured Data Analytics

CHAPTER 4How to Increase Customer Acquisition and Retention with UDA

People don't care how much you know until they know how much you care.

—Theodore Roosevelt

THE VOICE OF THE CUSTOMER: A GOLDMINE FOR UNDERSTANDING CUSTOMERS

Business survival relies on the company's ability to acquire, grow, and retain good customers. In today's global economy, companies are competing to keep their current customers and to get attention from prospects. While some are investing heavily to attract, inspire, engage, and convert prospects and successfully retain their customers, others are struggling to equate customer acquisition and retention with customer lifetime value.

Leading marketing organizations have been mining customer-generated data to understand customer behavior. They gradually embraced predictive analytics to improve precision performance, profit, and overall return on investment (ROI). According to The CMO [Chief Marketing Officer] Survey, companies currently spend 6.7 percent of their marketing budget on analytics and expect to spend more than 11.1 percent over the next 3 years.¹

High-performance companies are abandoning traditional transaction-based methods such as recency, frequency, and monetary (RFM) models in favor of behavioral models to segment and conquer new markets. At stake is answering critical business questions, such as:

• Which prospect should be targeted to become a loyal customer?
• Which e-mail campaign is more likely to be opened by a customer/prospect?
• Who ...