Harnessing the Customer Strategy Potential of Big Data
Terabyte. Petabyte. Exabyte. Zettabyte. Yottabyte. To today’s business leaders these words represent the enormity of data that businesses can use to drive improved economic value. Most people can’t even fathom that much information. But it’s out there, and it’s growing every day. And if you’re in a senior executive position, it’s definitely part of your job to figure out what to do with big data.
The ability to collect, store and utilize data in a way that can lead to unique competitive advantage has the power to radically transform any industry. It has become a top strategic priority for almost every CEO. And though companies have vastly improved those capabilities, customer experience improvements still lag woefully behind. In fact, most customer experiences have hardly budged at all, even as new data possibilities emerge that gives companies the power to deliver a proactive, frictionless customer experience—what consumers want, when they want it, and increasingly even before they know they want it.
Why hasn’t customer experience kept up with Big Data advancement? Because most companies don’t start with the end customer in mind. They let smaller business objectives and a technology focus drive the experience. And that’s exactly the wrong approach for long-term success.
Some would argue that we are on the third or fourth generation of Big Data strategy. The first generation was about building the warehouses to collect the “structure” data and execute basic campaigns all in batch mode after the fact. The second generation was about creating more sophisticated customer offers for increasingly smaller customer segments delivered via simple promotional campaigns and agent scripting. Now, in the third wave, most companies are working to blend real-time analytics from structured and unstructured sources with business processes improvements and technology.
This represents a huge step forward as Big Data becomes all about real-time actionable insights delivered in a proactive manner preferred by the customer. But the difference between the third and fourth generation hinges on the customer experience.
Start with the customer experience
Customer experience is the differentiator for the next decade. The companies that start with the customer in mind and find a way to make their customers say “Wow” on a daily basis will undoubtedly be the winners of the future.
With competition fierce and industries maturing, growth will largely come from innovative new ways to serve your customers. A 2013 study by Watermark Consulting found that customer experience leaders averaged a 43-percent gain in stock performance from 2007 to 2012 (during the recession), compared to a staggering 34-percent loss by customer experience laggards. Naturally, CEOs are taking notice that customer experience is not a departmental issue anymore. It’s an executive priority.
The CMO and CIO—business and IT—must work together to enable the customer experience vision held by most CEOs. When it comes to the third and fourth generations of Big Data, however, real-time speed and predictive proactive insights are critical, which often entails delivering the best experience in a self service or non-agent assisted mode. Customer (and CEO) expectations require new programs be conceived, developed, and delivered much more quickly and much more cost effectively than ever. Consumers aren’t willing to wait for a good experience or listen to excuses. Yet most companies are limited by siloed organizations, ineffective business processes, and decades-old technology systems such as CRM, billing, ERP, and others. Other than isolated one-off campaigns, real “Big Data” strategy relies on these systems, where new customer-driven features are few and far between. If you design the right new customer experience but can’t deploy it, you won’t deliver on the strategy.
Start with a different question
The starting point of this challenge begins with looking at the problem through the customer lens. Ask yourself, “what does the customers want,” not just “what can we do with the data?”
To deliver a truly exceptional customer experience that delivers superior economic value, a company first must clearly define its customer experience strategy; map out the simplest, easiest way to do it; focus on how to use data in real time to predict and deliver on customer needs; deploy technology to enable actionable data-driven insights, and then educate and arm employees and self-service engines with the right knowledge management tools to deliver the right best experience.
Doing this means deeply analyzing every customer touchpoint across the entire value chain to design the ideal experience and then mapping the gaps with the “as is” experience. Once a company has its customer experience blueprint, it can then focus on the process and technology capabilities and improvements required to cost-effectively deliver this proactive, insight-driven, real-time experience that can lock in customer loyalty in a way competitors can’t match.
This is where the customer experience strategy should meet and marry up with the company’s Big Data Strategy. Data strategy must be a component of the customer experience, not the other way around. How is a company creating insight from what customers buy, what channels they use to interact, how much they pay, when they contact the company, etc.? And what do executives do with that information once they have it, from the customer perspective?
This is not pie-in-the-sky thinking. It’s already happening in limited cases, but not nearly often enough. For example, I travel internationally regularly. On each my last four trips, my wireless company shut off my data service because of high usage even though I was on a premium international plan and even though they knew I was abroad. Each experience cost me more than a half an hour to resolve, cost the company a lot of lost profit and eroded my confidence and satisfaction.
This company is now actively trying to redesign its customer experience with the use of real-time Big Data to change the game. Instead of shutting off my phone when I hit my limit or charging me extra international fees, the company could automatically enroll me in the next highest international plan, and let me know what they did and why. This move requires a strategic look at a number of data points —my tenure and value as a customer, my usage patterns, my costs, and efficiency and cost measures on the company side. But it doesn’t end there. The self-service systems and customer care organizations need the knowledge and tools to proactively change my account for the better and to reach out in a relevant way to inform and interact with me.
The billion-dollar question for today’s executives is whether your company can avoid the big miss with Big Data and instead harness it with the right strategy to deliver an exceptional customer experience. How are you prepared to answer it?