Great customer data is the fuel that powers great customer experience. Let me give you an example.
I've always been a big fan of a particular retailer (whose name I won’t reveal here), where I shop for all my clothes. While I love this brand for its great clothing line and sensible prices, I’m always amazed at the way they get my order and preferences right almost every time I shop there. Over the last few years, they’ve proven to be a company that understands what matters most to me, their customer—and that keeps me glued to them. As luck would have it, this applies to my wife, too.
Rewind four years from today, and things weren’t as rosy. I used to shop at this retailer, among others. It was February, and I was looking for a Valentine’s Day gift for my wife. After scrutinizing what she might like, what she already has, and excluding things that are a definite no-no, I checked their store to find (what I thought would be) the winning gift. I presented the gift on Valentine’s day only to find out she had ordered exact same item from their website a month ago and returned it because it didn’t fit her expectations. In other words, I bought a product from the same retailer who sold that same product to my wife and knew she had returned it. Bummer!
While I’m all for personal commitment to finding a right gift for my love, I always wondered why this retailer failed to take advantage of the data available to them and make a sensible recommendation. As in this case, if they had explored available data about me, my household, and our collective purchases (using the same credit card), as well as the products we had returned, that would’ve allowed them to save the day with a great experience.
Organizations have gotten better over the last few years, focusing religiously on the customer experience. Traditional selling was all about products and services. A line of business would sell products to customers without knowing anything about what another department was doing with the same customer. Dealing with fragmented customer information forced companies to look at technologies such as Master Data Management (MDM). MDM became a dream solution for retailers to ensure they have clean, consistent, and accurate information about customers—no matter what product or service they bought.
Today’s organizations are in a hyper-competitive world where they must learn how to compete on customer experience. They need the capability to provide highly targeted offers with personalized messages. As one McKinsey study found, marketers who employed data-driven personalization delivered five to eight times the ROI on marketing spend. Gartner also says 89 percent of companies expect to compete mostly on the basis of customer experience this year, versus 36 percent four years ago.
MDM is an important and necessary technology for achieving the next-generation 360-degree view of the customer. While having a clean, consistent, and enterprise-wide view of information about customers is vital, today’s organizations need to augment that information with insights from big data that were never explored just a few years ago. For simplicity, I would like to divide these insights into the following four dimensions.
1. Interaction Data
The interaction data is what gets captured when we visit websites, or have calls with a sales team or call center. It could be the products I checked out on the website or things I put in my online shopping cart to see later.
2. Transaction Data
This is data associated with our past purchases, credit card swipes, Apple Pays, etc. In general, any data generated by financial transactions between the organization and its customers contains a lot of insights that can be leveraged to predict future buying patterns. Increasingly, this data also includes purchase and service history.
The derived data about customers’ relationships, their household information, the company they work for, etc., are critical for retailers. Living in a social media world, our Facebook friends, Twitter followers, influencers, even online reviews play significant roles in our decision to buy.
4. Customer Journey
The modern customer journey is complex. Marketing leaders struggle every day to answer the questions, “Why did this customer buy? What particular events and interactions led to a conversion? What is the next best offer?” To answer these types of questions, organizations must focus on the critical moments that inspire people to buy their product or service. The life journey information consists of significant events that have occurred in customer’s life, such as recently had a baby, just graduated from college, or about to turn 50.
In my retailer’s case, threading these four dimensions into my mastered customer record would’ve delivered rich, hyper-enhanced insights. They provide a deeper understanding of me, my past interactions and transactions, my household, and our collective preferences. Adding past product purchases, products my wife has browsed on their website and Facebook, as well as my interactions with them on Twitter and other social networks can further help them make the right offer to me.
While my experience with that retailer was not the greatest a few years ago, they have consistently gotten better since then. They’ve kept me loyal to them by providing attentive service over the last two to three years. And they’ve made some irresistible recommendations that I couldn’t ignore! Last year, they sent me a Valentine’s Day offer that was a huge hit. As February 14 approaches, nothing comforts me more than knowing I’m in good hands. Now I can just leave it to them to rescue me from shopping turmoil and make me look good! (Everyone needs a little help now and then, right?)
What are your plans for the big day? If you’re a retailer, are you prepared to deliver a great customer experience to your customers this season? I’d love to hear your comments and gifting tips. Connect with me on Twitter at @MDMGeek.