Category Archives: Customers
From marketing automation to analytics software, there were countless technology offerings showcasing how to best assist the modern marketer in making every customer interaction personal. Throughout the week, I had numerous conversations with retail professionals about the importance of personalization in marketing and what it means to their organization’s future plans.
At the heart of their plans was the need to understand the data that they have today, and how to verify the data that they will inevitably acquire in the future. If it’s accurate, if it’s reliable, if it’s complete – customer data can fuel your ability to engage and interact.
The data driven marketer derives insight and ultimately provides a personalized experience by leveraging this valuable data for each customer.
And why is this important?
Well, according to McMurrayTMG, 78% of buyers believe that organizations providing a personalized experience are interested in building good relationships. But it all starts with accurate data.
Knowing who your customers are, how you can contact them, and what they are interested in are essential in order to engage with your customers. With the abundance of data available today, you have to figure that if you aren’t ensuring that your customer interactions are personalized, then your competitors are gaining ground. Every interaction, every correspondence counts towards a positive perception as well as increased sales and customer satisfaction.
By fueling your interactions with Data as a Service (DaaS) for accurate customer data, you will ensure that your customers have a personalized experience with your brand and ultimately accelerate your business.
I live in a very small town in Maine. I don’t spend a lot of time thinking about my privacy. Some would say that by living in a small town, you give up your right to privacy because everyone knows what everyone else is doing. Living here is a choice – for me to improve my family’s quality of life. Sharing all of the details of my life – not so much.
When I go to my doctor (who also happens to be a parent from my daughter’s school), I fully expect that any sort of information that I share with him, or that he obtains as a result of lab tests or interviews, or care that he provides is not available for anyone to view. On the flip side, I want researchers to be able to take my lab information combined with my health history in order to do research on the effectiveness of certain medications or treatment plans.
As a result of this dichotomy, Congress (in 1996) started to address governance regarding the transmission of this type of data. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a Federal law that sets national standards for how health care plans, health care clearinghouses, and most health care providers protect the privacy of a patient’s health information. With certain exceptions, the Privacy Rule protects a subset of individually identifiable health information, known as protected health information or PHI, that is held or maintained by covered entities or their business associates acting for the covered entity. PHI is any information held by a covered entity which concerns health status, provision of health care, or payment for health care that can be linked to an individual.
Many payers have this type of data in their systems (perhaps in a Claims Administration system), and have the need to share data between organizational entities. Do you know if PHI data is being shared outside of the originating system? Do you know if PHI is available to resources that have no necessity to access this information? Do you know if PHI data is being shared outside your organization?
If you can answer yes to each of these questions – fantastic. You are well ahead of the curve. If not – you need to start considering solutions that can
- Identify PHI in all of your data streams
- Monitor and track the flow of this data throughout your organization and
- Mask this data if it is being shared with resources that don’t need to be able to identify the individual.
I want to researchers to have access to medically relevant data so they can find the cures to some horrific diseases. I want to feel comfortable sharing health information with my doctor. I want to feel comfortable that my health insurance company is respecting my privacy. Now to get my kids to stop oversharing.
December is the most popular month to get engaged (according to wedding website TheKnot.com), so it’s likely many of us gearing up for the typical spring/summer calendar full of weekend weddings.
While December is not known as a big month for weddings, it is a big time for jewelers, including the months leading up to it. Diamonds, gold, and other fine jewelry become very popular purchases at this time.
Fine jewelry is an emotional buying decision, which you can see from the jewelry store commercials that evoke sentiment for our loved ones.
But that emotional pull to purchase diamonds, gold and precious stones could be changing significantly.
Diamond sales are down this year – but what is up? Technology-related gifts, including smart phones, tablets, and other functional devices. To understand why, all you have to do is think about the ages of people getting engaged: 18-34 year-olds.
People in that age range who are getting engaged right now just aren’t drawn in by the emotional purchase of fine jewelry anymore, if they ever were. They value technology purchases.
But it’s not just function over form. The emotional motivation behind a purchase (whether technology or fine jewelry or any high-dollar item) is always there.
“Status for this generation isn’t about money — it’s about attention,” said psychology professor Kit Yarrow in a recent Pacific Standard magazine article. Therefore, a smart phone is considered a better gift (and better use for the money) than fine jewelry, since it allows you to share your life and stay connected much more than a gold and diamond ring can do.
As the article notes, using technology to create “an everlasting Facebook album from that scuba diving trip in Bali says so much more than one lone photo of a pave diamond necklace.”
WHAT FUELS YOUR BUSINESS DECISIONS?
The average decision process for a consumer making a purchase is estimated at 80% emotional and 20% rational, according to an annual customer loyalty report from Brand Keys.
It’s interesting to think that the car in your garage, or the shoes on your feet, could have ultimately been something you felt you wanted (80%), and then justified the need for later (20%). Brands, especially in the luxury market, depend on this ratio.
This realization brings us to your business planning as we begin 2015. What guides your business decisions as a data-fueled marketer: emotions, or rationale?
How do brands make decisions about how to operate, what customers to market to, where to locate stores, what marketing campaigns to do, and many more strategic plans? It needs to be much more in the “rational” category – but how do you do that as a data-fueled marketer?
As consumers, we are emotional creatures without even realizing it. That can be a habit we bring to other things in our lives as well, including decisions at work.
Since your customers still have emotional reasons for making a purchase or using a service, the only thing that should be emotional is your messaging to your customers; not your planning. Creating customer profiles and making decisions from them should never be solely a ‘gut feeling’ or only based on your professional instincts.
At the same time, we all know that in our work, over time we develop good instincts about what we do. We learn to trust our sense of what will work or won’t work in the market, or in the supply chain, or within product development – whatever it is you do. You can never ignore that, because no one can completely predict the future with total accuracy. You have to trust your experience and knowledge to lead you.
Turn the 80/20 ratio on its head, and instead focus 20% on emotional thinking and 80% on rational thinking. Make your brand’s business decisions and planning based on good data.
Who are your customers? Where do they live? What do they do and what are their preferences? Basing the answers to these questions only on what has worked in the past, or what you think your customers should want, will only lead to bad business decisions.
The first step, however, is to know that your customer data is valid and complete. Gartner estimates that 40% of failed business initiatives are due to bad data. Validate, correct, and enrich your customer data before you use it. Then as a truly data-fueled marketer, you can use the 20/80 ratio properly and steer your brand to a great 2015.
Consumer demand is driving the adoption of IoT as they embrace the new technology to improve health (Garmin Vívoactive), energy savings (NEST), safety (BeClose) and a better overall experience including shopping (beacons?). However, getting the balance between privacy, intrusion and relevance can be tricky for both the retailer and shopper.
While shoppers are willing to give up some level of privacy in return for personalization, I am not convinced most are ready of what the “Internet of Things” brings. I recently purchased a smart TV and was surprised when I was asked to accept terms and conditions before using, what are they capturing, how will it be used, will I see any benefits? Retailers need to demonstrate value and trust to the consumer.
While RFID has been around for many years the next wave of intelligent “things” bring both opportunities and challenges. Retailers need to decide which ones truly enhance the shopping experience.
“Psst! It’s Me, the Mannequin. This Would Look Great on You.” (Rachel Abrams, NY Times)
Smart Dummies (mannequins) – Last year House of Fraser started rolling out beacon-enabled mannequins to engage directly with shoppers and passers-by. Shoppers within a 50-metre range will receive information from the mannequins, which may include details about the clothes on display, with links to make a purchase from a website, or details of where the outfit can be found in the store. The next step could link customer preferences, profile and past purchases and suggest matching accessories, check customers size availability or monitor how long they browsed and offer a digital coupon.
Connected Hangers – While you browse through the racks, real-time reviews are displayed on the hanger, size availability or images & videos displayed on screens showing the garment in use. Retailers can capture how popular an item is but never purchased. Taking the clothes and hanger try on could provide personalized recommendation on shoes and accessories.
Personalized Mirrors – I recently read an article in Time (Dec 29th) about Rebecca Minkoff’s new store in Manhattan, where they installed a giant mirrored panel showing images of models walking down the runway. The panel acts as a mirror and touchscreen, where shoppers can order up a personalized fitting room, offering style tips based on their selection. This is connected to a mobile app that saves their browsing history and style preferences for their next visit. When a customer is ready to purchase a sales assistant takes payment on an iPad.
In future blog I will discuss how location based services are machine-to-machine technologies are impacting retailers and consumers.
With so many devices connected and larger volumes of data captured this raises concerns around data privacy and security. In the past year we have seen too many stores on data breaches and retailers. While shoppers are prepared to share more information for relevance they expect you to keep it safe and secure. Retailers must have a solid data governance framework and process in place or risk losing the trust and loyalty of their customers.
Sensor Driven Analytics
The Internet of Things presents retailers with a wonderfully opportunity to understand and engage the customer like never before. However, retailers need to manage the explosion of data available through smarter devices to gain insight into shopper behaviours and preferences and turn into a more rewarding experience for the consumer.
However, before loading an analytics engine they need to ensure the data is clean, connected and safe. Without this any decisions made are flawed and will impact their brand and ultimately the bottom line.
62% of global consumers switched service providers due to poor customer service experiences (Accenture Global Consumer Pulse Survey)
Issues with keeping everyone happy have been around since the beginning of trade and as trading has evolved, the underlying rule remains the same – keep the customers happy! Retailers who move beyond just selling to the customer and focus on creating the shopping experience customers want will see higher retention rates and increased spend per shopper.
Other factors like good quality of the products and competitive pricing play a huge role as well but taking care of the consumer is even more important. At the end of the day, shoppers have more options and opportunities to purchase from your competitors.
While multi-channel commerce has gown, many people are shopping not because they really need the products but because they like the experience of shopping. The better the experience is (which includes an amazing customer service) the more likely it is that the customer will come back and make a purchase in store or online. However, if they run into issues with the retailer, not only will they complain and never come back but they will tell their friends, damaging your brand and hurting the bottom line.
News of bad customer service reaches more than twice as many ears as praise for a good service experience. (Help Scout)
Today retailers realize the importance of great customer service and that’s why they train their staff to be friendly and helpful to the customers at all times. Studies have shown that people are reacting very positively to this kind of treatment and not only are they more willing to spend more money but also remain a customer a long a time.
People want to be treated right but they also want to feel important. That’s why retail businesses nowadays go an extra step and use technology and access more data like past purchases, preferences and trends to enhance the customer experience. Even if a customer had a bad experience smart retailers are leveraging customer insights to turn any bad situation around fast. Customer service representatives can responsive to any situation with all the information they need in real time or a highly personalize offer can be delivered to their smartphone.
A 5% increase in customer retention produces more than a 25% increase in profit. (Bain & Co.)
Retailers also have access to different social channels where they can influence and respond to what their customers are saying about their services and products and can use this instant feedback to make changes quickly and precisely.
In today’s world retail businesses have a great advantage compared to the ones that were operating even 5-10 years ago and if they are prompt in addressing concerns they can minimize the negative affect on their operations very easily. Each satisfied customer is not only going to spend money but they are going to advocate for the retailer which is a very powerful thing in business in the long run.
That’s why today successful retail businesses are turning data into insight to make sure that any problems and concerns are addressed promptly and efficiently, and deliver the experience customers desire.
Over the past few years, we’ve seen companies across industries make remarkable business transformations to become customer-centric organizations. These companies understand that customers are no longer loyal to brands or products alone. Instead, they’re loyal to companies who provide the optimal, most personalized customer experiences.
By understanding more about their customers, their interests, and their interaction preferences, organizations can ultimately encourage increased sales and usage of their products and services.
As we begin 2015 and predict what the next trends will be, I believe that this year will finally be the year that customer centricity becomes the norm – and effective management of data will play the most critical role to date in getting companies to reach their customer centricity goals.
But it won’t necessarily happen overnight. So how should companies get started with this effort?
“A requirement behind customer centricity is the ability to understand customers at a fairly granular level and to be able to identify the customers or the segments of customers who are valuable from the ones who aren’t,” writes Peter Fader (Co-Director of the Wharton Customer Analytics Initiative at the University of Pennsylvania). “If you can’t sort out your customers — if you can’t look at them and know who is good and who is bad — then you can’t be customer centric. That’s step one.”
More and more companies are working through strategies for what Peter Fader describes as step one. They understand their data, and explore ways to utilize this information to gain valuable insights. For example, consider the advancements that Citrix achieved (read more in this case study). By better understanding their customer data, they saw a 20% improvement in lead conversion.
The organizations that have a better understanding of their customers are leading the way by utilizing technology to ensure data accuracy. If their contact data (address, email, and phone) is correct, then they can effectively reach that customer without fail. If their contact data is poor, connecting with customers becomes impossible and can ultimately impact their ability to compete.
Companies like BCBG understand this and are utilizing data quality services to reach up to 15% more customers (read more in this case study).
As companies continue to understand their customer data, they’ll look to fill in the gaps. Sometimes, these gaps are obvious. If a customer’s contact profile has a hole in it – for example a missing phone number – it becomes clear that the hole must be filled.
Utilizing Data as a Service enrichment and validation capabilities, organizations have the opportunity to clean up missing data without wasting a high value customer interaction to ask for their phone number. Instead, they can spend their time selling to this customer.
In addition to filling the contact profile gaps, Data as a Service subscription data is also a great way to expand the view of the customer and learn more about them. Companies can enrich their customer profiles with demographic information or industry data to round out their customer profiles, further supporting their customer-centricity goals.
In 2015, we will see companies utilizing their customer data to form a deeper connection and ultimately increase sales. The habit of “Speaking at” customers will fall by the wayside of true engagement. If customers are the lifeblood of an organization, then, in 2015, we’ll see more and more companies leveraging Data as a Service to increase customer loyalty — and ultimately fuel business growth.
As we renew or reinvent ourselves for 2015, I wanted to share a case of “imagine if” with you and combine it with the narrative of an American frontier town out West, trying to find a new Sheriff – a Wyatt Earp. In this case the town is a legacy European communications firm and Wyatt and his brothers are the new managers – the change agents.
Here is a positive word upfront. This operator has had some success in rolling outs broadband internet and IPTV products to residential and business clients to replace its dwindling copper install base. But they are behind the curve on the wireless penetration side due to the number of smaller, agile MVNOs and two other multi-national operators with a high density of brick-and-mortar stores, excellent brand recognition and support infrastructure. Having more than a handful of brands certainly did not make this any easier for our CSP. To make matters even more challenging, price pressure is increasingly squeezing all operators in this market. The ones able to offset the high-cost Capex for spectrum acquisitions and upgrades with lower-cost Opex for running the network and maximizing subscriber profitability, will set themselves up for success (see one of my earlier posts around the same phenomenon in banking).
Not only did they run every single brand on a separate CRM and billing application (including all the various operational and analytical packages), they also ran nearly every customer-facing-service (CFS) within a brand the same dysfunctional way. In the end, they had over 60 CRM and the same number of billing applications across all copper, fiber, IPTV, SIM-only, mobile residential and business brands. Granted, this may be a quite excessive example; but nevertheless, it is relevant for many other legacy operators.
As a consequence, their projections indicate they incur over €600,000 annually in maintaining duplicate customer records (ignoring duplicate base product/offer records for now) due to excessive hardware, software and IT operations. Moreover, they have to stomach about the same amount for ongoing data quality efforts in IT and the business areas across their broadband and multi-play service segments.
Here are some more consequences they projected:
- €18.3 million in call center productivity improvement
- €790,000 improvement in profit due to reduced churn
- €2.3 million reduction in customer acquisition cost
- And if you include the fixing of duplicate and conflicting product information, add another €7.3 million in profit via billing error and discount reduction (which is inline with our findings from a prior telco engagement)
Despite major business areas not having contributed to the investigation and improvements being often on the conservative side, they projected a 14:1 return ratio between overall benefit amount and total project cost.
Coming back to the “imagine if” aspect now, one would ask how this behemoth of an organization can be fixed. Well, it will take years but without management (in this case new managers busting through the door), this organization has the chance to become the next Rocky Mountain mining ghost town.
The good news is that this operator is seeing some management changes now. The new folks have a clear understanding that business-as-usual won’t do going forward and that centralization of customer insight (which includes some data elements) has its distinct advantages. They will tackle new customer analytics, order management, operational data integration (network) and next-best-action use cases incrementally. They know they are in the data, not just the communication business. They realize they have to show a rapid succession of quick wins rather than make the organization wait a year or more for first results. They have fairly humble initial requirements to get going as a result.
You can equate this to the new Sheriff not going after the whole organization of the three, corrupt cattle barons, but just the foreman of one of them for starters. With little cost involved, the Sheriff acquires some first-hand knowledge plus he sends a message, which will likely persuade others to be more cooperative going forward.
What do you think? Is new management the only way to implement drastic changes around customer experience, profitability or at least understanding?
Happy Holidays, Happy HoliData
In case you have missed our #HappyHoliData series on Twitter and LinkedIn, I decided to provide a short summary of best practices which are unleashing information potential. Simply scroll and click on the case study which is relevant for you and your business. The series touches on different industries and use cases. But all have one thing in common: All consider information quality as key value to their business to deliver the right services or products to the right customer.
Thanks a lot to all my great teammates, who made this series happen.
Happy Holidays, Happy HoliData.
Maybe the problem lies in the widespread confusion about omni- vs. multi-channel initiatives. An omni-channel system takes a connected approach to multiple channels, seamlessly integrating customer activities into a single conversation, even when the customer decides, for whatever reason, to switch channel. In omni-channel retailing, the customer can select and change channels in any way that suits them – and the retailer can respond instantly to deliver the experience that the customer needs. Each time the customer interacts with the brand, they generate data that the retailer can use to better anticipate and serve the customer during the next conversation.
So, if omni-channel initiatives are so powerful, why are retailers not taking the next step?
In a multi-channel system, a retailer grows from a single channel to multiple channels with each channel essentially operating as a separate business unit. Each has its own pricing, promotions, inventories, and back office systems. The omni-channel system integrates all of these channels and their accumulated data into one cohesive view of the business and customer. But many retailers wrongly believe that their organizational structure and systems don’t lend themselves to the new environment.
Many feel that a fundamental redesign of the corporate retail organization – from a single P&L regardless of channel, to “rip and replace” of IT systems – would need to occur at the most basic levels. And many organizations are unsure if the extra time, money and risk to reorganize is worth the advantages promised by an omni-channel strategy. In short, many retailers have adopted a wait-and-see stance before they invest.
However, these retailers can take comfort and guidance from the conclusions of the IDC FutureScape: Worldwide Retail 2015 Predictions conference. Based on a survey of top retailers, the conference predicts that “In 2015, CIOs will invest in omni-channel integration technologies as a top priority to support growth in the omni-channel shopper sales premium of 30%.“
The Future is Now
When retailers invest in omni-channel integration, they essentially design an entirely new supply chain of unified capabilities that can simultaneously handle the demands of their “brick and mortar” stores, their ecommerce sites, and any other channel that they have in place. The retailers that have already done so are already seeing the benefits:
- Corporations that have invested in omni-channel services are already witnessing an average of 30% increase in sales.
- The IT departments of these corporations are spending far less time performing the redundant or duplicate tasks required by a multi-channel system.
- Both structured and unstructured data are more successfully and easily integrated across the company than with a multichannel operation.
- IT departments can retire older technologies that are no longer performing at their previous levels of efficiency.
- Consumer impacts on individual channels can now be identified almost immediately and the channels adjusted accordingly.
While many businesses may be cautious about taking the next step, the shopping characteristics of today’s consumer are rapidly changing. Customers are moving into an omni-channel world, whether the retailer is ready or not. This means that the business might be forced to play catch-up to their customers, and perhaps sooner than they might like. Omni-channel initiatives simply reflect, improve and realize the value of this customer behavior. Omni-channel initiatives are about making the individual consumer the main focal point of the business model.
What are retailers all abuzz about right now as we get closer to the Black Friday / Cyber Monday dates?
This year, retailers are using between 31-50% of their online marketing budget on holiday-related efforts alone, according to the National Retail Federation.
The NRF also projects that almost 20% of the retail industry’s annual sales will come from the holiday period.
This sounds like so much pressure, any retail marketer would crack like a chestnut under it. What’s a marketer to do? Here are some tactics and results around peak season holiday marketing.
Segmentation is a great way to see a big lift in sales. If you have the data to understand your customers and identify emerging segments in your market, you can find new business and directly target it with specific messaging. One recent case reported by Target Marketing Magazine showed a 40% year-over-year sales increase from a new segment that was identified and targeted with tailored messaging. Learn more about getting the most from your customer data in this white paper, “Data Quality Management: Beyond the Basics.”
Know your email sender reputation. You spend so much effort getting the right message out via email marketing with the right timing over different days leading up to Black Friday, Cyber Monday, and Green Monday into December. But a poor email sender reputation can lead to those efforts being blocked or sent to the junk folder instead of to your customers. Global retailer BCBG proactively avoided this, using data validation and cleansing techniques to send their sender reputation sky-high (which you can read more about here.) Don’t let a bad sender reputation limit you during the holidays — especially when it can take up to 15 days to fix a major issue like this. Find out more in this short informative video, “Email Sender Reputation: What Does it Mean to Marketers?”
Everyone, positively everyone, is talking about mobile. Practically every article you come across on the subject of retail industry sales around the peak season holiday mentions mobile in some respect – for very good reason. Shoppers take their phones and tablets shopping with them to compare prices, look for deals, and research their purchases beforehand. The NRF reports that 7 out of 10 retailers they surveyed are putting major investments into their mobile-friendly websites. A well-timed SMS message to your customers with a special deal just for them could work wonders. You can take advantage of the huge popularity of SMS mobile messaging in just a few steps. See how in this SMS Quick-Start Guide created for marketers like you.