Analytics is a very geeky business and not every end-user is as comfortable with numbers and identifying the implication as they change. Hence, it is important to innovate w.r.t. consumption of analytics. This is achieved by employing a concept called “conceptual abstraction.” Let us take an example:
Every B2C business categorises customers by their value. The exact criteria and their exact values change from business to business but almost every business has something like this:
- Value of business they have given
- Potential of business the client can give
- How big of a brand evangelist are they
- How much referral business can they get for us
- Credit score
- How frequently are they purchasing, etc.
In such a case, we would define a new data point called “Love Indicator” that abstracts these complexity into three types of hearts:
- Full Red Heart – Your best customer
- Half Red Heart – Your avg. customer who have scope for improvement
- Empty Red Heart – Your lowest ROI customers
This can help you send gifts to full-red-heart customers and engage them to ensure business continuity and may distribute coupons to up-sell to half-red-heart customers. Now let’s take the concept further add time dimension.
- Light gray full heart – A previously red full heart customer who has not bought for say 3 months.
- Light gray half heart – A previously red half heart customer who has not bought for say 3 months.
- Light gray empty heart – A previously red empty heart customer who has not bought for say 3 months.
This can help your business reactivate dead customers with email or direct marketing by offering coupons. Reactivation in turn directly can help you increase business. To summarise, by conceptually abstracting difficult to understand analytics into easy to understand ideas, you are saving your managers the effort of thinking analytically on a day to day basis.