Why some of our most successful companies are lost in data space
The local butcher could show many companies how to better use their information wealth
COMPANIES: consumers know you have a lot of data on them – and they now expect you to use it to their advantage. They expect you to have all of their information at your fingertips when you ring them or chat to them in store. They expect just the right number of emails with the latest offers – offers that are relevant to what they need.
Consumers: you are probably not aware that many of our largest companies, which have the most data on us, are struggling to bring it together. Many of our banks have evolved with one computer system for home loans, another for savings accounts and yet another for credit cards. Some phone companies have one system for your landline, one for your mobile, one for your broadband and another for your cable TV. Ever moved house and had to make four phone calls to get all of these things installed?
The nirvana of “one view of customer” is mighty tough when you have four or five large legacy computer systems that have to come together. The cost is in the tens of millions of dollars.
The advantage that Apple, Google and Myer, as examples, have had for the past five years, is one computer system with one set of data, setting the standard that today’s customer expects. This is why many small businesses have such great customer service and an ability to tailor offers to their customers. They know them. Everyone remembers the local butcher. “Hi, Mr Jones, how were those porterhouse steaks last Friday? We have them on special today, or you could try the beef Wellingtons we made earlier this afternoon.” Or the local barista. “G’day, Amanda, skim latte with one sugar? How about a fruit salad with that this morning?”
But there is hope for companies with multiple computer systems, staring up the mountain of a large capital investment to bring them together. Both Australian and overseas data companies have raced to solve the problem by dragging the data out of each computer system in real time, into one server, so that it can provide one view of a customer.
The good data companies can bring this data together into beautiful, easy-to-comprehend dashboards. They can even bring in external data sources such as a customer’s Twitter feed to sit alongside the information they already have. But once a company has all of this data in front of it, the next thing is to mine it, understand it and use it for the benefit of the customers and the company alike.
Imagine ringing your bank to redeem the loyalty points you’ve accumulated. Once that’s done, you ask if you can open another savings account to put money into each month for that upcoming holiday. The answer you want, and that is now possible via these data companies, is “Sure, just hang on a minute while I transfer some of the information we already have on you across so I can open new account for you … and while we’re waiting, I see via Twitter that you had an issue two weeks ago on the wait time in the Burwood branch – did everything get sorted out OK?” The answer you’re used to is, “I’m sorry, I’ll have to transfer you to our savings account team.”
The best data companies are not only doing this but have also built in a “next best action” algorithm for the person providing the customer service. So in the example above, the Twitter issue would have been automatically flagged by the system and it might have also flagged that the anniversary of the customer’s home purchase was coming up, and would they like a quote on house and contents insurance.
The next best action is also highly beneficial for direct marketing to a company’s database, automatically tailoring offers to the right customers at the right time.
As we entered 2014, big data was a hot topic. Various predictions for the top trends in marketing for the year included that customer data would continue to go unused because of the time and costs involved in bringing it together. And at the same time, there were predictions that marketing would become even more data driven and that data sources would continue to grow.
Some of Australia’s largest companies have made huge investments into this space to keep up with these trends, with Woolworths spending $20 million to buy data company Quantium just over a year ago and Telstra announcing a $60m investment into data marketing earlier this year. However, there are also now options for marketers with far smaller budgets. The “one view of customer” is here, and customers are expecting you to be using that data well.