Data Analytics in Action
It wasn’t long ago that credit unions learned of their members’ needs and expectations by talking with them when they visited the branch.
But as technology has infiltrated our lives, and branch visits have given way to the convenience of online banking and mobile apps, that key source of customer intelligence is disappearing. How do you know what your customer wants?
It’s an important question that applies across industries, and the answer that many companies are coming to is data analytics. As more data is created, and more consumers demand increased convenience, it’s becoming clearer that there’s a huge opportunity for all businesses — including credit unions.
According to recent studies by Accenture, companies using data analytics are already seeing big success from the insights they’ve obtained. There is a 92 percent satisfaction rate among executives, and 75 percent of companies cite growth as the key value of analytics.
So what type of insights can be gathered from data analytics, and how can those insights impact business decisions and improve performance? Here are just a few examples.
General Electric (GE) places sensors in many of its machinery products, such as gas turbines and jet engines, to collect performance data. The resulting information helps the company identify opportunities to improve working processes and reliability. These insights are expected to boost productivity in GE’s U.S. operations by 1.5 percent and save enough money to raise average national incomes by as much as 30 percent over a 20-year period.
American Express takes historical transactions, measures them against hundreds of variables, and filters the results through predictive analytics models to understand and forecast consumer behavior.
This process gives them a proactive advantage over traditional hindsight reporting, and is providing measurable results. In their Australian market, they are now able to predict 24 percent of the accounts that will close within four months, allowing them to target at-risk account holders with retention efforts.
Improve Products and Services
Twiddy & Company is a family-owned business that manages vacation rentals on the Outer Banks of North Carolina. It took years of customer data that was buried in spreadsheets and launched a data analytics project to better understand their challenges and make better decisions. The resulting insights helped them to adjust their pricing structure, better target consumers, and identify vender efficiencies. With an initial investment of just $40,000, the company has increased its inventory by more than 10 percent in three years, and cut costs by 15 percent.
As you can see, you don’t have to be the size of GE or American Express to take advantage of data analytics. It has the power to help you gain insights into challenges and opportunities you might not have realized existed.
While the idea of data analytics can seem intimidating or daunting, don’t let it discourage you from investigating the possibilities. Look at it as an important tool to help you address your bigger concern — understanding what your members want.
This article was written by Tim McAdow, Vice President, Sales Operations & Marketing at CUNA Mutual Group.