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Customer IQ and How Can It Help Your Business? | CoverWallet

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Regardless of industry, scale, nature of services, and location, all businesses have the same problem – attracting and retaining customers for as long as possible. Along with the increasing number of direct competitors and the wide popularity of online shops, it’s certainly hard to take a slice of the pie and hold on to your clients for the longest time possible.

So how do you get more customers? Where do you find them and who are your target clients? Do you satisfy the needs of your clients and understand their wants? When combined all together, the answers to these questions form what we call customer IQ, or the different attributes that make up your customers and your business.

In order to serve them better, understanding customer IQ and capitalizing on its core significance is essential to the success of your trade. Keep in mind that knowing your customers in all aspects possible will help you deliver what they truly want and exactly what they need.

Customer IQ vs. customer equity

While both customer equity and customer IQ are correlated with each other, it is important to distinguish one from the other to have a better understanding of your customer base. Customer equity is the lifetime value of the business or company based on the number of existing and future customers. It is often used when assessing the value of the business; the more customers you have, the higher customer equity you’ll generate.

Customer IQ, on the other hand, is all about knowing the insights of your clients. It is an indicator of whether your business knows their needs and wants, and if you are delivering the right product or service to the correct person. A high customer equity ultimately leads to an increase customer IQ, but in order to facilitate growth you need to:

  • Deliver the best possible customer experience, not just once but every time.
  • Fully understand the needs, wants, and demands of your customers.
  • Make use of all possible resources and analyze data at the speed of business.

How to get there

To be able to fully understand your customers, you will need reliable information to determine the current level of customer IQ. Without proper data, it’s difficult to make informed decisions for the betterment of your business. Luckily, you don’t need to dig deep into the well of knowledge to gather this vital information, all you need to do is to listen to your customers.

Most of the time, the information you need is directly provided by the customers. You’ll find it via recorded conversations, chat support, answers to surveys, membership details, and customer profiles. You can also find relevant data via customer relationship management (CRM) systems, marketing campaigns, customer reports, invoices, and purchase history.

  • Conduct thorough research both online and offline to gather information.
  • Use social media platforms and check customer activities to discover more about them.
  • Make sure to protect, organize, and classify all the information you’ve collected.

The importance of data

Even if you have all the right information readily available to hand, you need to see this data at work to produce accurate outcomes. You’ll find that it’s not the biographical information such as age, gender, occupation, and location that will determine the customer IQ, but rather the context of the data. Analysis is the key here: knowing who your customers are, what items or services to sell them, and how to keep them engaged with your business.

You don’t need to spend money on highly specialized applications, sophisticated software, or a group of qualified experts just to get the precise data. Simple facts about your customers’ personal background and socioeconomic status are enough to process the information you’ll need to measure customer intelligence. Having the right data allows you to:

  • Highlight the strengths and weaknesses of your business based on industry trends.
  • Determine the KPIs (ey performance indicators) that are relevant to your business.
  • Create tailor-made business solutions to respond to the diverse needs of your clients.

Gleaning customer insights

After gathering the important information needed to determine customer IQ, the next process is to analyze and synthesize this data to discover customer insights. Insight is the understanding of your customers’ behavior and why they are acting that way. Without proper analysis, your business won’t be able to produce actionable insights that will help understand your customers’ ways of thinking.

When analyzing customer insights, it is important to note that you need to take things a step further from the usual context presented on paper in order to give value to the information. Learning that customer A bought product Y once last month and twice this month is basic. What you need to find out is that why customer A suddenly bought more than usual. Did they recently move and build their own family?

  • People are unique, but motivations can be predicted based on the presented data.
  • Insight goes beyond who, what, when, and where, and focuses more on why.
  • Focus only on what matters and disregard all information that is deemed irrelevant.

What’s next?

Customers are now making informed decisions such that one mistake or bad experience from the past may lead to abandonment that will ultimately hurt your business. Aside from establishing great customer relationships that will definitely help your business a lot, working on customer IQ will, in the long run, boost the potential of your business. As a business owner, you must understand your customers and execute ways to deliver their essentials – needs, wants, and demands.

Aside from offering customized solutions, determining customer IQ will also help uncover and resolve potential problems within your business before they get worse. Businesses must look beyond traditional ways of understanding clients but should focus more on learning new methods that will increase customer engagement. Remember to:

  • Identify the right target market with the help of sourcing tools and reliable systems.
  • Improve your accuracy in the quickest time possible because client expectations change.
  • Exceed customer expectations and to retain clients as long as possible: this is your main goal.