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Cracking the Big Data Challenge

Leveraging data for actionable insights requires operational and technological shifts in how we do business. Here’s how companies are overcoming those obstacles and driving business results.

Adapted with permission from 1to1 Media.

Companies are in the midst of a data revolution as organizations in every industry strive to mine and analyze a growing mountain of customer data. And while every organization has its own definition of Big Data, the data offers businesses new opportunities to better understand their customers based on a limitless number of data points including their purchasing habits, interaction histories, and more.

But pulling insights from Big Data to better understand the customer journey requires both agility and patience. According to Gartner, 85 percent of Fortune 500 companies are ill prepared to exploit Big Data in their organizations for these efforts.

A big reason for Big Data’s lack of progress points to lack of communication. Steve Pollema, president, eLoyalty, a TeleTech company, says more organizations can start routinely acting on Big Data if they make it available across their organizations and easy to access. “We know it can be tough for companies to get out of their own way and allow for information to be shared across channels,” Pollema notes. “But even by starting with a few integrations, customers will appreciate the difference if it means not having to repeat themselves every time they call, for example.”

Forrester Research Analyst Deanna Laufer also points to the cross-organizational flow of information as a means to giving Big Data liftoff. “It’s easy to be project-driven [in using data] and lose sight of how the data you have could further benefit the company and your customers,” she says. “Keeping the lines of communication open between your colleagues and departments just to check in on what other people are working on is important for making sure that you’re getting the most out of your data.”

Despite the need for open communication about Big Data’s potential influence across enterprises, retailers are experimenting with using data to bring more shoppers to their stores. Nikki Baird, managing partner at Retail Systems Research, says many are using customer data to guide their efforts. “Retailers are very focused on creating more engaging experiences in stores and they need a baseline understanding of behavior before they can make real investments in measuring how that behavior changes,” Baird says.

While many companies are stalled in effectively harnessing Big Data, others have implemented the strategies and processes to move their efforts forward. Here’s how a fashion retailer and airline company are approaching the challenge.

Giving Your Customer Feedback Wings

Listening to and acting on customers’ feedback is critical, however many companies struggle to leverage insights from the information they receive. The airline AeroMexico is one such company that struggled to apply insights from its passengers’ feedback to improve its service.

A major challenge was that prior to 2012, AeroMexico didn’t have a formal method for gathering customer feedback. “Passengers could call or complain in person at the airport but we had no way to quickly analyze what customers were saying,” says Edouard Piquet, AeroMexico’s director of client experience and 2013 1to1 Media Customer Champion. “Also, not everything is relevant and so we needed a program that would help us understand the voice of the customer and identify the attributes that were most likely to result in high loyalty scores, so that we could make meaningful changes.”

AeroMexico’s first step was to conduct face-to-face passenger surveys using the Net Promoter Score question, “How likely are you to recommend AeroMexico to others and why?” The surveys revealed two pain points that were affecting customer satisfaction: the airline’s staff’s approach to managing delays and the in-flight experience. “We found that passengers on delayed flights thought our staff didn’t show enough empathy through their body language and verbal messages, Piquet says.

Since then, pilots and flight attendants have received new training on how to better convey information, such as by being apologetic and providing an explanation of what caused the delay. Additionally, AeroMexico executives now call customers who have experienced flight delays (and who have given permission to be contacted) and were coached on resolving any remaining issues.

The company also learned that flight attendants greeting a passenger by his or her last name and the pilot’s greeting both have a positive influence on the customer experience. “We now have a policy for flight attendants to use a passenger’s last name whenever possible and we’ve given the pilots talking points to refer to in their greeting,” Piquet says. “Some pilots are better at this than others, but now we have the data that shows passengers want to hear from them and sharing information like weather conditions or the expected arrival time is important.” As a result of these efforts, AeroMexico regained more than 3,000 customers that it would have otherwise lost.

And while it’s clear that customer feedback can enrich the customer experience, AeroMexico’s customer service committee also shares its insights with other departments. The operational heads of pilots, airports, engineering, marketing, and customer service are part of a committee where each department shares its learnings, making it easier to make business decisions and act on them, Piquet adds. “About four years ago, we were basing many of our decisions on anecdotes, but now you have to build a business case to support your suggestion,” he notes. “This benefits the company since we’re making strategic decisions that we know will ultimately improve our passengers’ experience with us.”

In Vogue: Data Insights

Fashion retailers face immense pressure to keep up with the latest trends as well as “fast fashion” retailers that rapidly churn out new merchandise. Having been in the retail industry for more than 30 years, Fred Levine, co-owner of M.Fredric, an apparel store based in Southern California, understands that running an efficient business is critical.

M.Fredric operates nine stores which are located in suburban areas. Keeping the latest fashion styles in stock is important for drawing returning customers, as is the ability of store associates to build relationships with them, Levine notes. “We’re located in neighborhoods where we get a lot of repeat business and so our customer changes over years, but the inventory has to change within weeks,” Levine says. “And it’s hard to stay on top of what’s selling without a sophisticated inventory management system.”

Now through a recently implemented POS and inventory management system, M.Frederic gets insights into which merchandise is selling or not selling. This information enables the company to track its inventory based on size, color, material, and other specifics.

With these data insights, M.Fredric is able to better control costs and improve inventory decisions. Levine estimates his company has already saved $25,000 to $30,000 by returning merchandise to vendors that wasn’t selling. “Instead of letting the merchandise languish on shelves, we can quickly see what customers aren’t buying and have the vendor swap it with something else. This also helps the vendors because they get more time to resell the merchandise,” Levine explains.

Additionally, having access to POS and inventory information at any time through a mobile app is a valuable features, Levine says. When a buyer is attending a tradeshow or visiting a showroom, the ability to quickly look up that item in M.Fredric’s stores and see an analysis of its performance “pays for the software itself,” Levine maintains.

“Information on your desktop computer isn’t always useful,” Levine says. “When you’re a retailer where items only have a brief shelf life, our inventory and profitability is maximized because you have the data you need at your fingertips instead of having to go back to your office.”

Indeed, M.Fredric’s next move will be to use its inventory and sales insights to deliver more relevant messaging in the hope of drawing more returning customers to its stores, Levine says. Eventually, the company will send emails to customers who have expressed interest in certain styles or merchandise to inform them that the store just received those items. “It could be something where we’re telling our customers that we have the jeans that you like which were just featured in a magazine and here’s the photo,” Levine says. “It’s all about creating a dialogue between the store and your customers and making sure you’re giving them what they’re interested in.”

Usage is what ultimately matters

The definition of Big Data is different for every organization and department, but what ultimately matters is how the data is used. For the retailer M.Fredric, analyzing inventory and sales data enables the company to operate more efficiently and ensure that it’s providing the types of merchandise customers demand. And as AeroMexico’s Piquet points out, the challenge behind Big Data is also determining what’s important.