It wasn’t too long ago that industry leaders would have scoffed at the idea of collecting too much customer data. In a rush toward realizing the value of big data and analytics, customer information was the key to higher revenue and increased market share, and more was better. Too much customer data? There was simply no such thing.
Times have changed
Today companies are experiencing firsthand the challenges associated with collecting, analyzing and actioning mountains of customer data. Big companies, especially when delivering an omni-channel experience in retail, collect data in many different ways — through various touchpoints, transactional data, marketing automation and primary research initiatives.
The challenge for these companies is how to bring all of this customer experience research and data together in a way that provides value and insights to the business.
Multiple stakeholders, multiple agendas
Consider call center teams, who collect and validate basic customer information, but can also confirm customer interest and readiness to purchase. Or social media engagement tracking, which tells companies how customers interact with their content and also provides a means to monitor brand image. Sales also collects client data (installed base, key customer contact, competitive information), especially in business to business (B2B) companies. Marketing has their own data points including website traffic, email open rates and communication preferences to name a few.
Often these and other groups within an organization will drive separate research initiatives to gather, analyze and action customer data, in many cases for their specific purposes and in isolation.
A significant expense
Collecting, housing, analyzing and actioning all that customer data is very expensive. With no centralized plan, companies can incur a considerable cost for overlapping initiatives. Even if separate groups share data, there’s bound to be overlap in the data collected, and each group will mine the data based on their unique requirements. The costs in dollars, time and resources add up quickly. Additionally, your company may be investing these resources into something that may or may not have a substantial impact on the customer experience and your business.
Lack of planning can drive lacklustre results
While it’s okay and often necessary to have individual customer initiatives, the absence of a centralized and coordinated plan often creates missed opportunities and confusion for companies. Inconsistent approach to research can yield conflicting insights and drive different action plans, and rather than improving the customer experience, they can confuse or even frustrate customers.
Organizations need to start with a company-wide understanding of their goals for increasing profitability and improving the customer experience and establish a consensus on how to target and measure progress against those goals. Without these two in place, they risk investing in initiatives that may have little to no impact on the customer and not meet revenue or market share targets.
Three ways to improve your customer data initiatives
How can businesses manage all this data and build a company-wide strategy that promotes collaboration, data-sharing, and the creation of common action plans? Here are four ways that organizations can get started:
- Establish common goals
While each team will have unique requirements and metrics, it’s critical to establish common goals when it comes to customer engagement and the customer experience. These goals should align with the strategic vision for the company set out by the executive team.This helps to streamline the number of goals, creates clarity and also ensures executive support for the overall initiative. An effective way to determine those goals is by conducting strategic customer experience research — this helps clarify the current relationship between company and customer, and ultimately to refine and prioritize goals. - Share data and minimize overlap
Teams collecting data should work together to consolidate their efforts. Where possible, ‘no repeat data’ should be their mantra. Customer data must be centralized and fully accessible to the appropriate stakeholders.This includes defined business requirements – how to collect the data, when it should be collected and where it will be stored and how to access the data. Consistent screening questions across initiatives will enable cross-collaboration between studies. - Collect the right data points
Companies need to carefully examine the questions they’re asking their customers. Too often, in an effort to gauge customer satisfaction, they’ll ask customers about what they like, or what makes them happy. Many organizations invest a great deal of money and effort in measuring customer satisfaction and even pay bonuses based on the results.The problem is that customer happiness and satisfaction are very poor predictors of customer loyalty or future behavior. In fact, negative experiences are much more predictive of what a customer will do in the future. In fact, 60-80% of defecting customers categorize themselves as ‘satisfied’ on surveys conducted immediately before their departure. (source: Verde white paper).Another point to note is that attitudinal feedback (‘I’m angry’, or ‘I’m frustrated’) is much less valuable than experiential feedback (‘this is what happened’). It’s hard to do anything with the former, while the latter provides a precise readout of that particular customer experience.
Create common, actionable insights
With shared data and goals, companies can consolidate their findings and create actionable insights that are consistent across the organization. These can serve as a platform for individual functions to align behind broad initiatives based on the desired customer experience.
Michael Tropp is Vice President, Business Development at The Verde Group.