Customer data is just that. It includes the personal data, purchase history, contact records and preferences of customers. It is also a rich goldmine of insight, value and advantage. Armed with a wealth of data, companies often struggle to leverage the benefits of it. As customers demand engaging and frictionless customer experiences, customer data is increasingly of concern to the C-Suite. Read on to find out how to unlock competitive advantage and create superior experiences with data.
Customer data and big data
Large businesses often have sizeable data warehouses, either located in their own data centres or in cloud data centres run by other organisations. These data warehouses store thousands of petabytes (equal to 1,000 terabytes) of data from customer orders and inventory to service requests and employee files. With so much data collected and stored, the organising, retrieval and analysis of such data requires sophisticated tools. The era of ‘big data’ is a double-edged sword – you either have so much of it that you can’t see the wood for the trees or you don’t have all the data you need to analyse in one place.
Small-to-medium enterprises are often less well-endowed on the IT front. Yes, they can access cloud services such as AWS or Azure, but they also tend to use a plethora of tools. If you consider for a moment how many martech products an average-sized marketing department is using, it is bewildering. Many of these platforms are themselves in the cloud, distributed and without the interconnectivity we need. In some cases, a more planned and controlled tech stack is connected to a CRM tool to build a more detailed picture of customers. This very information is of value to the C-suite, with boards desperate to find growth, improve customer experience and demonstrate social purpose.
Marketers as custodians of customer data
The majority of customer data tends to sit in marketing. This depends very much on who ‘owns’ the website, mobile apps and service platforms. As businesses become increasingly digitised, it is clear that marketers are holding many of the cards. This is another double-edged sword. First, it means that marketers are in a great position to improve and tailor customer experiences. Second, it means that the management team wants and needs that data to be leveraged in a meaningful way.
The truth is that the wider strategic goals of the organisation may mean that marketers are peripheral to this transformation. These goals are the result of a carefully crafted and ambitious strat plan. The ensuing plans and programmes may be led from someone outside of marketing.
Some of the largest companies in the world leverage customer data to a fascinating extent. Thinking of booking a holiday? Don’t worry, an email will be along shortly that tries to ‘guess’ your intentions. Looking for that certain something online? Don’t worry, the website will suggest what it thinks is most relevant to you based on your history. Walking along your local high street and feeling hungry? Yes, you guessed it, one of your apps sends you a notification to remind you of the latest offer on lunch. In summary, we see the potential for competitive advantage from data, but does it actually work?
Tailoring messaging to in-market customers
According to Smart Insights, 63% of consumers[i] will stop buying from brands that fail to master personalisation tactics. This is worrying given the sheer complexity of the digital transformation required and the accuracy of data needed. However, more tellingly, Harvard Business Review found that when consumers see transparent advertising linked to their activity on a website, there is a 38% increase in revenue[ii] for the product.
So, a simple, balanced argument that if you get it wrong, nearly 2 in 3 will stop buying, but if you get it right, you could see a 38% increase. But, all of this assumes that in-market customers like your customer experience in the first place. If your revenue is £100m and after launching a huge transformation you achieve a 10% increase to £110m, what were you already missing out on at £100m? Yes, it could be that elements of your experience across all channels and touchpoints were suboptimal to start with. But, how would you know this before embarking on a full-scale customer data transformation? Let’s talk neuroscience.
Neuroscience for a better experience
Full disclosure, we support companies with service blueprints, customer journey mapping and neuroexperience research. So, are we suggesting that you should use neuroscience in lieu of personalisation? No, of course not. But tailored messages and advertising may not in themselves overcome your unconscious feelings about customer experience. For example, let’s say that the login process regularly frustrates some of your customers, which could mean that some won’t respond to your tailored email offer. Additionally, if your customer service team is regularly overwhelmed by calls, it could mean that people ignore the bigger purchases through you.
But wait, are we still getting ahead of ourselves? Do we actually know how customers feel about the use of their personal data, cookies, app permissions and geo-location access? How will customers feel about the personalisation of app notifications and email offers that seem to know too much or algorithms that profile them? Here is what we recommend.
Recommendations for customer data
We recommend five steps before embarking on a customer data transformation:
- Research customer response to privacy, permissions and personalisation
- Research customer experience today to maximise your transformation opportunity
- Conduct your customer data transformation to tailor your messaging
- Research customer response to your tailored messaging and advertising
- Review your profiling, personalisation and messaging for unconscious bias
Armed with research, supported by neuroscientific techniques to reduce bias and measure in-flight CX, you can be confident in your investment.
Conclusion on customer data
There is a world of opportunity for organisations with the appetite, capability and finances to invest in a customer data transformation. For smaller businesses, it may pay to ensure that your overall CX is as good as it can be for now. The last thing any board needs is a large-scale programme of change with uncertain benefits. We also don’t want to leave money on the table because customers don’t trust your company and your CX has room for improvement.
If you would like to speak to us about CX or neuroscience, simply email us at sales@think-beyond.co.uk.
Alternatively, why not talk to a human on 01565 632206 or ask us to call you back via our form.
Finally, you can read a little more about how we use neuroscience with CX and a live CX example with one of our clients.
[i] https://www.smartinsights.com/ecommerce/web-personalisation/consumers-personalized-marketing-engagement/
[ii] https://hbr.org/2018/01/ads-that-dont-overstep?autocomplete=true