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A low percentage of professional service firms conduct formal data
mining in order to reveal the unmet needs of their clients or to
discern new marketplace opportunities.
But data mining appears to deliver solid competitive
results. Firms that practiced data mining were 2 to
3 times more likely to report effectiveness in attracting and retaining
clients.
- Data mining is the practice of analyzing data to describe past
trends or gain future perspectives. More than
70% who use a contacts database do so to automate traditional
marketing tasks. Only 30% tap their database’s strategic
potential for mining and using valuable data.
- Professional service firms’ data mining activities range
from simple (e.g. revenues by client or time period, or proposals
won versus lost) to sophisticated (e.g. relationship between the
firm’s business developer and its success on proposals,
or clients’ price sensitivity thresholds).
- Data mining can help increase PSFs’ competitive effectiveness
in the marketplace. For example:
- By noticing a decline in their profit margins on a long-time
service offering, PSFs could take steps to create and or improve
their new service development pipeline.
- By determining their relative market share vis à
vis their competitors, PSFs could begin working to build their
“share of customer” (e.g., cross-selling their
services to a client).
Case Study
Numerica Group plc, a U.K. based accounting and business consultancy,
built its entire competitive strategy around data mining. Numerica
built links between its contacts management, practice management
and financial accounting systems to create a deeply integrated process
of information capture and management. Numerica found that its data
mining commitment helped it increase its effectiveness in winning
new business opportunities, cross-sell services to targeted clients,
and rapidly integrate new staff and allocate them appropriately
to client projects. Results are increased profitability, streamlined
sales and marketing processes, heightened service quality, and increased
ROI on marketing and sales.
Figure 5.1 Professional service firms'
use of their contacts databases
More than
70% who use a contacts database do so to automate traditional
marketing tasks. Only 30% tap their database's strategic potential
for mining and using valuable data.
source: Expertise Marketing,
LLC |
Figure 5.2 The use and effectiveness
of data mining
Firms that
do not practice data mining* say they are less
effective in getting closer to their clients
Firms that DO practice
data mining are nearly two to five times more likely to
report they are effective in:
-
delivering services...
- using innovation...
- using client relationship management
strategies and tactics
- employing competitive practices
- employing market research
...as a method to get closer to their
clients
| * |
Data mining is defined
as the practice of analyzing raw data in a database to
describe past trends and obtain future perspectives on
strategic marketing issues such as market share, client
purchasing patterns and the like. |
source:
Expertise Marketing, LLC |
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