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

The Australian - The Deal - - News - Andrew Bax­ter Andrew Bax­ter is chief ex­ec­u­tive of Publi­cis World­wide Aus­tralia

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.

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