Finding The Right Customers Drives Profits...Simple!
This article appears in our Q1 2022 issue of Finance Transformation Magazine. To download the issue, click here
Gary Cole, CEO of Lumilinks, a Global Data Science provider, explains how Data Science can identify your potential market, find you new customers and ultimately drive profits. Data Science drives the very essence of Business, so why complicate it!
Organisations are battling to keep pace in an environment where the trajectory for marketing and sales teams is ever-changing. The evolution and digitisation of our buyers' habits are changing the way we connect and communicate with them.
Take for example eCommerce. In the digital age, eCommerce has shown that businesses can operate 24 hours a day, provide up-to-date information about their products, and market their services to more diverse demographics. The burning question is, how do you identify those demographics?
At Lumilinks, we hear this question time and time again. One of the biggest barriers we see clients face is interpreting the data itself. Organisations might be collecting data, but if they aren't collecting the right data or interpreting it correctly, it won't be able to inform decisions in the way it should.
Data literacy remains central to staying on the pulse of our evolving audiences. It's a critical skill for the 21st century, but in reality, is an obstacle faced by most C-Suite professionals.
At Lumilinks, we're translating data, to illuminate the hidden links in consumer behavior, and empower clients to instantly understand their customers better. With our full-spectrum team of experts, including Analysts, Data Scientists, and seasoned sales professionals, we're providing a smorgasbord of data services including visualisation, machine learning, data warehousing, and of course data insights.
One of the key areas of insight we focus on is identifying a client's 'total addressable market', or TAM. TAM refers to the calculation of the total revenue opportunity available to a product or service, or the number of companies that could become your customers in the future. It's an essential tool for uncovering your potential market and supercharging business growth, as well as uncovering opportunities to displace competitors.
By identifying the TAM, we can pinpoint potential customers and how they may interact with organisations. If organisations can't determine their TAM, they won't know how many potential customers are out there, and therefore won't have a good understanding of how fast they can scale as a business.
TAM enables organisations to segment customers according to who is most receptive to the product, or who has the most propensity to buy. Meaning organisations can expect the best ROI.
In addition, it's worth noting that potential investors will look for well sought out TAM calculations. If an organisation can prove they have got a good understanding of the market and the synergy of their product in that market, then investors will be much more likely to buy into that company.
At Lumilinks, we examine TAM in 4 simple steps:
1. CRM segmentation, which involves determining who an organisation wants to sell to
2. Building and identifying the size of the sector within the market,
3. Identifying market fit, and
4. providing actionable insights and next steps.
As an organisation, CRM segmentation provides an understanding of your current market. Led by Dr. Tim Drye, our in-house expert in population & commercial segmentation, our team will work alongside our clients to develop bespoke segmentation based on factual and surveyed data, then splitting our findings into distinct categories including financial segmentation, commercial & consumer behaviour, and age profile.
This formula can be applied to B2B marketing allowing us to develop an in-depth understanding of the consumer and competitive buying cycle, including the total number of companies within a sector.
Once the size of the market has been identified, this provides an understanding of an organisation's ICP, and an analysis of their market share. We carry out this analysis by leveraging various sources such as companies' house, public data, council tax bands, and flood data as well as ML and various tools/ methodologies.
This segmentation also allows us to identify personas according to the behaviour or characteristic of the buyers in a B2B or a B2C buying cycle. For example, in a B2C scenario, we might identify affluent persons (group 1) progressive in buying habits (group 2) and are within a certain age demographic, for example: between the ages of 25-40 (group 3).
This identified 'persona' is more likely to have increased marketing potential for buying premium or luxury brands that are vegan. Using this data, we build a variable matrix table; allowing you to toggle based on strategic goals, client type, and buying cycle. From there, the task is how do we 'find' said ICPs or personas.
The key here is identifying a network effect to understand trend vs intent. We examine 'what' the market is doing in order to allow clients to strategically assess where organisations will have more market penetration, and identify which customers have more of a propensity to spend. This allows sales teams to prioritise who to contact first.
We can also uncover information such as personas, demographics, or locations which should ideally be avoided, as well as examine the annual returns of a business and more granular information such as company growth, and company data enrichment. This in turn allows organisations to make the most strategic decisions based on variables other than just market fit.
By removing data silos and providing data that lives in one warehouse, Understanding your TAM can provide actionable takeaways for your organisation, increasing your capacity and capability to increase your revenue.
To stay on the pulse of consumer behaviour, businesses should be striving to understand their audiences on a more granular level. Gone are the days where data is incomprehensible and clunky. We're making data digestible. Lumilinks are changing the way businesses receive and use their data, meaning they can change the way they connect with their customers.
To find out more visit www.lumilinks.com
About the author: Gary Cole
Gary Cole founded Lumilinks in 2019 alongside Jo Dudley-Smith and Dr Tim Drye who is a former DataIQ Data Scientist of the Year. On a mission to disrupt the traditional SaaS status quo, Lumilinks offer analytics as a service using A.I. decision-making models to empower users to identify the optimum route to goal, helping organisations to efficiently and strategically achieve their business objectives.