In a recent interview, John Bastone and Wilson Raj—two of the resident Customer Intelligence (CI) gurus at SAS Institute—told Loyalty 360 how organizations can use CI to help ensure that all of their decisions and actions are as customer-centric as possible.
What’s the first thing someone unfamiliar with Customer Intelligence (CI) should know?
Raj: The first thing to realize is that all organizations already have customer data and information amassed through the varied interactions they have with their customers. Customer Intelligence is simply the next logical stage: gleaning insights or knowledge from the collected data to drive more desirable and profitable interactions with customers, both immediately and over time.
Customer Intelligence is the process of gathering information from wherever your customers are, distilling this information into insights, and sharing these with stakeholders across your company so you can improve products, marketing, customer service, and more. In short, CI allows ALL decisions and actions to be customer-centric.
Bastone: To build on Wilson’s points, I’d add that CI is the glue that holds together any truly differentiated Integrated Marketing initiatives we see in the marketplace today. At SAS, our CI focus targets three core areas: providing companies with the smarts to identify gold nuggets of profitable opportunities, providing information so the factory can take the best marketing actions rooted in those insights, and providing the integration with core financial and operational systems to drive real cross-business impact. SAS customers who execute on these three points aren’t just smarter or delivering more (and more integrated) campaigns, they’re having measurable impact on profits and customer loyalty.
What are your tips for organizations as they begin to think about using analytics and CI to drive loyalty programs and customer marketing decisions?
Bastone: Well, as a somewhat grizzled veteran of loyalty efforts in the Grocery and Consumer Packaged Goods sectors, I can tell you that any loyalty effort needs to start with the end in mind. And the end in mind shouldn’t be another two-tier pricing scheme, or a “me-too” points program, but the basis of something that truly allows a company to offer a differentiated customer experience that impacts the bottom line, favorably. Companies committed to doing that are doing amazing things.
I think Wilson can expand on the concept of “start with the end in mind” and give us some step-by-step pointers on how best to approach it.
Raj: Yes, in my experience, steps successful organizations should take the following steps to accomplish best-in-class CI and customer loyalty efforts.
- Start small: test the waters by deciding which marketing goals are priorities, then collect and organize data accordingly. For example, typical marketing goals could be to increase demand generation, improve quality of engagement, evaluate campaign effectiveness, and enhance customer personas, and so on. Start by picking the one or two areas that make the most sense for your business.
- Get a landscape perspective: Try to identify other customer interaction points as they relate to your specific marketing objectives. Isolate various data points or inputs that may be of value. For loyalty programs for instance, data that reflects RFM (Recency of purchase, Frequency of Purchase, Monetary Value) may not be sufficient. The most successful loyalty programs are those that recognize lifetime customer value.
- Think multi-channel data: Think from an online and offline perspective. Multiple channels influence a purchase decision, a brand choice, a loyalty commitment, and so on. The key is to understand your customer’s journey, identify the appropriate touch-points and define the relevant data points to inform your actions.
- Start connecting the dots: A single view of the customer is essential to deliver positive and consistent customer experiences. With analytics, businesses can start mining for the hindsight, insight, and foresight to help take the appropriate marketing actions, make the relevant marketing investments, and pull the correct marketing operations levers. Think through these possibilities and develop a roadmap for collecting and testing these data points as they become available and actionable.
There are so many media and channels that today’s marketers can use to engage consumers, and some of them didn’t even exist 5 years ago. How can organizations plan to make analytics-based decisions today that will put them on solid footing for the future?
Bastone: In many ways the rules haven’t changed—you have to test hypothesis at a smaller scale, do proper test and control, learn and iterate, constantly. Yet in many other ways, things have completely changed, as companies now have the opportunity (and in many industries, the responsibility) to track interactions with customers at a very detailed level. If you know every promotion you’ve exposed a customer to, across every channel, what response was elicited, and overall activity, you have all the raw materials to understand exactly what works, what doesn’t, and to what extent. There’s still room—lots of it—for creative thinking, and gut feeling on all manner of marketing. But what’s unacceptable is not using the data you have to mitigate your risks.
Raj: I agree with John’s points and would just add that the step-by-step approach I outlined above will serve companies well today and in the future—this logical progression builds the foundation to support current and future goals.
Once organizations begin collecting large amounts of data on their customers, what’s the best way for them to share that data across the rest of their business?
Raj: The top three barriers to effective sharing of the data gleaned from CI efforts are: lack of a comprehensive customer view, organization culture and skills, and limited appreciation or applicability of CI to the broader business. Let me describe what I mean by all three of these in more detail:
- Lack of comprehensive customer view — Start by building and evolving the data and intelligence infrastructure that allows you to mine insights from multi-channel customer interactions.
- Organization culture and skills –Typically, organizations are structured around brands, verticals, channels, solutions, products, etc., but not necessarily around the customer. While this is slowly changing, many organizations still don’t have a “catcher’s mitt” for all the data and insights that are coming in. Build centralized teams that mine the data for customer intelligence and can translate insights to actionable recommendations for marketing. This requires insights teams or CI practitioners to have left- and right-brain skills and to focus on problem-solving.
- CI applicability to broader business — The responsibility here is to show that data-driven and insight-fueled actions can increase marketing effectiveness. In other words: demonstrate business value. CI practitioners have to evangelize and teach the rest of the organization the value of insights by aligning with the various organizations’ success measures but also help create a culture of data-driven strategic thinking.
Bastone: Those are all good points. I’d sum them up by saying: don’t just share data, add value. I’ll use a retail example here. If I’m running a loyalty group, and I’m churning out reports on the retention rates or sales averages for my top customer segment, what’s the category manager for electronics going to care?
If I can identify that this same segment constitutes 60% of the profits in electronics, that’s the start of a more interesting conversation. And if I know who’s most likely to lapse as a shopper in the next 6 months, and can project that negative impact on the consumer electronics business, now you’ve got a strategic conversation. If I can guarantee within a few percentage points ROI for a campaign that engages those shoppers, using some of that electronics merchandising budget, that helps electronics hit its sales target, now I’m core. Finally, if I can quantify why it is a better spend for the business to invest some of the mass circular budget into ongoing attrition campaigns, that’s when marketing actually moves the needle.
If you could look into a crystal ball and see the future of using analytics to maximize customer experience and loyalty, what do the most successful practitioners look like?
Bastone: They’re intensely curious. Those successful practitioners look at every customer interaction as a chance to learn something to improve sales downstream. They’re also mathematically literate, with the knack for taking something complex and telling a compelling story. Where the crystal ball gets cloudy is where we will find this next generation of marketers.
Raj: As CI matures, most practitioners are adapting to the need to capture, integrate, analyze, synthetize, and apply insights to marketing decisions. The notion of analytics as a key strategic capability is becoming more mainstream for CMOs and other executives. Having a single view of the customer is now considered “tablestakes,” despite the difficulties and challenges involved. The most successful CI practitioners are not only doing some of the things we mentioned, but are taking analytics to the next level.
We’re seeing successful practitioners extend data capture beyond traditional sources. As newer channels emerge, practitioners are now integrating social, mobile, location-based intelligence and insights to optimize marketing performance. Newer sources will also likely include interactive TV, tablets (digital and mobile data), and apps.
Second, there is an increasing pressure on CI practitioners to deliver “real-time insights,” not just “real-time data.” The multi-channel, “always-on,” reality of today’s customer necessitates that practitioners deliver actionable insights almost instantly so that businesses can operate at the velocity of their customers.
Third, the more successful practitioners are not only using CI to optimize marketing. They are extending the value of CI to other business functions: sales, customer service, merchandising, manufacturing, design, supply chain, etc. These leaders establish customer intelligence as a core strategic asset and valued at all levels of the organization.
John Bastone and Wilson Raj are part of the Worldwide Marketing Team at SAS, a leader in business analytics. They focus on helping SAS Customers understand Customer Intelligence solutions.
Reprinted with permission from Loyalty 360.