It’s time to start using data correctly to improve customer engagement and business performance, argues data and insights solution manager at Salmat, Joe Hindmarsh.
We should have buried the term “Big Data” years ago. The only thing that’s “big” about data is the confusion it causes. Now’s the time to stop trying to collect and sift through big data and focus on how to use the right data properly to get better business results.
Customers are at the heart of all things data – and that shouldn’t change. But a recent Teradata report revealed only 39 per cent of organisations are capturing significant business benefits from acting on customer data. To truly get the maximum value out of your data, you need to go back to the drawing board and think about how to use data to get tangible business outcomes.
Make it Meaningful Data
Data has the potential to unlock powerful insights into your customers. With commercial data, you know about the person, you know about their transactions and their behaviour, ideally for the entire relationship. This commercial data is often easier to transform into meaningful insights. These insights are invaluable if you want to engage with customers in the right way through the channel they want. For example, when the company creates a campaign to sell more Widgets, the marketing manager chooses the print channel.
However, if they looked at customer data, they would see that Widget customers actually want to engage via websites and email, and these channels have the most potential to sell more Widgets. And if you don’t know what the optimal channel mix, you are just throwing money at the channels with little idea on what channels are going to give you the best results.
Make it Commercial Data
When asked what they want to do with data, many marketers will answer with a range of ideals, yet most admit they want to grow their customer database. However, doubling your email subscription list without knowing the commercial value to the business is not meaningful. It’s a vanity metric.
The financial value of customer data often goes unanswered, and this isn’t just about spend or profit. If you’re misusing your channels then there is every chance you’ve got poor ROI. Ideally, data should help you find out who your profitable customers are; those that spend plenty, are highly satisfied, engaged in a meaningful way and act as an evangelist. It’s attracting, converting and retaining these customers that makes the most commercial sense. The gap for many is finding more of them, how to target them and how to engage with them throughout their time with your brand. There’s no use in acquiring 200 per cent more customers only to find out that they’re not profitable.
But it’s not that simple; you can’t use only monetary data and expect to see results. Let’s use an example: Jane Doe may be a high spending, highly profitable customer but she keeps posting negative feedback via a few channels. It goes without saying that you need to pick up on it fast before she impacts the brand – but the real solution goes deeper than that. Your aim should be to get a sense of exactly how Jane Doe engages with your brand. Is she ultimately offsetting or reinforcing her value? There’s a big difference between a customer that spends money with your brand and one who is loyal, and that’s where behavioural data comes in. Those organisations that are winning are those who are combining three different types of data – Personal, Monetary and Behaviour – to find the true value of the customer.
Data driven Innovation
Data should be the driving force for innovation and can help you to stay ahead of the market place. Granted the ecosystem of technology, channels and engagements, play a role is capturing and using data, but it’s the data that offers commercial value. It should enable you to know your customers’ behaviour and needs, so deeply that you can see the opportunities nobody else has and explore the Next Big Thing.
Putting them into action
Finally, keep it simplistic. There are three types of data that you really want to capture and use; personal, monetary and someone’s behaviour. These three types of data boil down to one thing: using customer data to improve business performance. Start by looking at who your profitable customers are. Get insights into their lifetime value, upsell and cross sell, and the relevance of their loyalty. This will help you overcome the ongoing challenge of justifying marketing activities and measuring real return on investment. By knowing your profitable customers, the whole business can align to the ideal customer profile. This informs how you use different technology and channels, and which data you collect to find out how to better engage with them throughout their purchasing cycles. By investing more smartly, you can achieve better speed to market, better return for marketing and acquisition, and faster and more profitable sales and service experiences.