GlobalData™

Developing a Deep Understanding for the Markets You ServeD. KehoeMarch 21, 2017

P. 2Developing a Deep Understanding for the Markets You ServeGlobalData™

Developing a Deep Understanding for the Markets You Serve

Summary

Issue/Analytical Summary

Key Takeways

Once an organisation has made the decision to become a digital business, the first starting point is often improving and revamping customer engagement. The aspiration has been to understand how customers traverse channels and be able to offer a strong and consistent user experience. These ‘omni channel’ journeys are non-linear, start, stop and start again and involve a myriad of touchpoints (e.g., social, mobile, contact centre or in-store). Businesses that move in this direction are implicitly agreeing that data should be at the heart of their organisation.

The ability to understand customers at 360 degrees is about the ability to integrate touchpoints and bring more ‘context’ to customer engagements. In many cases, it is about passing on metadata (data about data) across channels in a timely way. While there are aspirations for many companies to have a data driven marketing organisation,

reality paints a different picture. For one thing, there are significant organisational challenges from defining the role and ownership of data to creating a workflow for how data can be accessed company-wide. Not all marketing departments are working with IT and many have different reporting structures. In some companies, customer care and marketing are tightly aligned and others they are not. Some businesses are also looking at placing a Chief Customer Officer in a top position with direct reporting to the CEO to break old siloes and drive a cadence of accountability.

Our research shows that the single most important priority in Australia is to develop a deep understanding about customers for the markets they serve. This report considers some of common challenges businesses face and provides recommendations for how best to deliver data driven marketing.

Data-driven marketing must be able to orchestrate engagements across traditional and digital channels in a way that will deliver a unified customer experience with outcomes that can be quantified.

Businesses want to be fast and efficient in order to win in customer experience through data-driven marketing. However some of the biggest challenges are in skill sets and changing the underlying culture.

While many organisations have not pinpointed a clearly define ‘owner’ of data, marketing departments can play a stronger role to devise a company-wide approach for data collection, retention and usage.

Mobile devices will continue to be front and centre for customer engagements while contact centres will be critical on the back-end. Overtime, in-store and contact centre will be aligned to deliver a unified front line.

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Perspective

Current perspective

Organisational challenges

Ideally, businesses want to deliver a high level engagement, personalisation as well as become fast and efficient across channels in order to improve customer experience with the broader use of data. However some of the biggest challenges are in skill sets and changing the underlying culture. The latter is becoming more important because many organisations are not set up to share data, but will typically work in the context of a department silo. In many organisations, data sharing does not take place at all and

ownership has yet to be assigned. In a recent focus group of Australian IT Directors, GlobalData asked business leaders poignantly about which department ‘owns’ customer data and found each attendee at a roundtable of 20 delegates had a different answer. The responses ranged from legal, finance, marketing and IT. No single attendee had a clear answer and looked for some guidance from their peers on the issue.

Personalisation and ROI

When businesses are not set up to share data (which most are we argue), it will start to create or exacerbate disconnects in serving customers. On the one hand, businesses are asking their customers to share more data. Any hotel, for example, will always ask for a personal e-mail. They will follow up promptly on the feedback after a recent stay and will often e-mail again about promotions. On the other hand, customers are willing to share their details with their brand of supplier of choice as long as they are getting some form of ROI in terms of personalisation. This is what is often missing. By and large the promotions that the hotel sends across will be sporadic. On the next visit, the same hotel does not know the customer any better in terms of preferences. Customers expect their brand of supplier to know something about them. This includes the reasons why they are calling to speak to an agent, frequenting the same hotel, or browsing online to search for information.

There are only a few companies which have seemed to have perfected the art of data driven marketing. Amazon continuously boosts online sales through its recommendation engine that tries to work out what its shoppers are likely to purchase based on people that have a

similar profile have purchased in the past through a process known as collaborative filtering which looks at metadata that provides details such as product SKU, price and who else bought it with similar information. Likewise Netflix was able to predict what types of content are best matched for its viewers and came up with 80,000 micro genres. The company was also able to create new content based on analytics to predict what new releases will be successful with its viewers and this is driving even more subscriptions.

The success of Web 2.0 companies is well understood, but the reality for most other companies is different. Customers will often receive duplicate outbound marketing offers from one company and inbound callers to a contact centre will often have to repeat themselves to agents as they get transferred around. Businesses do not have the second layer of understanding as to what a customer is looking for when they are on the company website and will not have a social media monitoring strategy established beyond having a presence. While technology is by and large ready to support data driven marketing, it is people and business process that have to be aligned.

Every object on earth will one day generate data. With the possibility of billions of people and connected things, data-driven marketing must be able to orchestrate engagements across traditional and digital channels in a way that will deliver a unified customer experience. Marketing departments will need to do this in a way where it can create new outcomes that can be quantified. With the

average Australian using between three to five devices, it is mobility that is also being rekindled and will the centre of the customer engagement. Mobile apps are one of the major channels where businesses are prioritising their investment dollars (above e-mail) and for this reason are looking at ways to evolve their organisation adapt a mobile centric mind set.

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Future Outlook

Data driven analytics appears to be moving from older bespoke systems to integrated stacks that are able to determine through a rules-based algorithm which messages and data sets are handed over at the moment of an engagement. These systems will be looking to understand customers better through a more rigorous analysis of ‘metadata’ and ultimately be able to make recommendations and suggestions for customers and/or the next best action for contact centre agents.

As more forms of communications, such as IM, voice and video, become embedded into traditional applications, there is scope to understand more contexts with customer communications. This will further the case of data driven marketing by offering more context to communications. For example voice analytics could offer real-time sentiment analysis and an agent to handle a call differently, route or escalate as required.

Mobile devices are likely to continue to be the central interface for engaging customers. Businesses will build more

mobile apps, offer personalised experiences and continue to collect more metadata to improve their offerings and customer intelligence. Contact centres are also likely to be more important vehicle for customer insight and data driven marketing on the back-end and will feed into a broader customer experience management hub. There will be more types of data feeding into the back-end systems allowing for a more personalised user experience.

Overtime these collective insights will be shared with in-store staff to create a more unified customer-facing front line. Also as companies continue to broaden their channels out to social, mobile, virtual assistants, there will be more focus on offering an integrated experience so that customers can move freely between different channels, engage a brand that knows something about them, can make relevant recommendations while being able to keep all engagements in the same session. This will be the best way to understand context in a continuous non-linear engagement.

Marketing and IT are Natural Partners

While many organisations have not pinpointed a clearly define ‘owner’ of data, marketing departments can play a stronger role to devise a company-wide approach for data collection, retention and usage. The IT department are natural allies for setting up a governance framework and advise on not only on ownership, but where data resides, who should have access to the data and even assigning an underlying value to the data for security, consumer privacy and compliance considerations. IT departments can also play an advisory role for the actual technology and implementation.

Working with the IT department is important because marketing departments will often know what they want in terms of outcome, but lack the IT capabilities required. Also

most organisations will use both a myriad of technologies (e.g., in-memory compute, relational databases and NoSQL) which are supported by another layer of application services. These systems also analyse multiple data sources from commercial transactions, e-mail and machine data to log files. For most companies, it is not about building something entirely new. But, they are looking better ways to integrate and fine tune the IT assets they already have to derive more insights. Overtime, these companies will then be looking to improve the quality of the information through third-party sources and data enrichment to create policies of engagement. This can be for example integrating real-time data into a CRM system to allow agents to make on the spot recommendations for customers.

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Recommended Actions

Buyer Actions

While date-driven marketing holds a lot of promise and will ultimately be used by more Australian companies, successful companies will need some form of active executive sponsorship. Some of the biggest barriers are on the set up of an organisation and existing business processes that are not aligned to support big data.

Nearly 70% of Australian companies are believed to be using mobile devices, for example, while shopping for a product in store. Mobility apps will be important will be important for engaging customers, understanding them better and building up loyalty. Contact Centres will also be important on the back-end as a logical orchestration point or anchor. Some customers prefer self-service, others value human interaction and businesses should make sure they can provide both options in an intuitive way.

Nearly 80% of marketing departments in Australia want to be a data-driven. Once a basic data sharing model is agreed upon, it is also important for any data-driven marketing initiative to be targeted. There is a tendency for companies to collect more data that what it needs which can also compromise the effectiveness of outreach campaigns. Having too much data can be as haphazard as not having enough data.

As big data becomes commonplace, many questions around privacy will be continue to be raised. There should always be clear opt-out processes for customers and in general, it will also be a good idea to have clear policies on customer data and retention. Consumers definitely want privacy, but many also want personalisation. It is important to explain ways data privacy is kept and many brands will not keep individual records, but create customer profiles or personas at an aggregated level. These approaches tend to be accepted so long it is transparent and opt-out is also a clear option.

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