Think your customers love your value proposition? According to a recent study, eighty percent of you do. But only eight percent of your customers actually agree that you provide superior value!

Now that’s a sad state of affairs, for you and for your customers. It’s axiomatic that great customer satisfaction drives customer loyalty – which drives repeat business (revenue), and in turn – profit. One example: after following up on sales leads identified by loyalty surveys, CDW saw revenue increases of $230 million.

Just as important: any number of studies (here’s one from the Harvard Business Review) show a well-defined correlation between customer satisfaction and a rising stock price (as well as lower volatility in both stock price and cash flow).

We’ve been talking about using data collected on the Web to improve customer intimacy for a long time, since Peppers and Rogers published their seminal book on one-to-one marketing back in 1996 – twenty years ago! But back then constraints on server and storage capacity, and the lack of high-scale software tools, limited companies’ ability to know their customers.

Today, all that has changed. Using the resources available in the cloud – virtually unlimited amounts of cheap storage, sophisticated analytics, and machine learning, to name a few – it’s now possible to gain detailed, actionable insights as never before. We can truly know our customers.

Here's an example: the largest sports franchise on the planet, Real Madrid, captures every interaction the championship team has with its fans: from the website to online merchandising to mentions on social feeds like Twitter and Facebook.

Using Microsoft Office 365, Dynamics Online, Dynamics Marketing, and Power BI for data visualization, Real Madrid is “building a way of understanding who our fans are, where they are, and what they want from us,” says José Ángel Sánchez, CEO, Real Madrid.

Do you use application analytics for improving customer relationships? Odds are, probably not. According to this report (Forrester login required), it’s more likely you use analytics first and foremost to monitor and improve the performance of your applications. Of course, that’s a good thing to do – but if performance is all you’re monitoring, you’re leaving money on the table. Your priorities in digital marketing must include improving customer engagement; your customers want – and you can measure – convenience, personalization, and trust.

Successful companies – including, perhaps, your competitors – are increasingly aware that they are all, inexorably, becoming software and analytics companies. All the data you collect from customer interactions can be analyzed to maximize your relationship – and your profits. That means that software, if it is not already, must become a core competency for your company. Software, as venture capitalist Marc Andreesen famously remarked a few years ago, is “eating the world.”

What could be more mundane than a vending machine? Coca-Cola Amatil, working with Australian digital agency TKM9, developed a “smart” vending machine, that uses the Microsoft Kinect device to recognize consumers’ age, gender and mood – and then, combining that with analytics in Azure, plays a song the consumer might like or present other marketing offers.

Azure's “intelligent cloud” gives you integrated technologies that easily connect together giving you a complete 360-degree view of your customer, and enabling you to build great and profitable relationships. You can collect data at any scale, drive experimentation, iterate, sharpen your message – and reap the rewards.

Are you using cloud analytics to improve customer relationships? Let us know in the comments section below. We’d love to hear from you!