Putting the customer first is hardly a new concept in business but in today’s environment of increasing choice and declining customer loyalty, understanding what the customer wants has become one of the biggest challenges for businesses.
At the same time as technology advances at an unrelenting pace and an increasingly complex and interlinked landscape of channels and devices emerges, how can retailers and other customer facing organisations ensure they have the capability to listen to what each customer wants?
The key to this is information; understanding it and knowing how to act on it.
Historically information has been siloed, segmented and separated by channel, product, geography or type of transaction. Each line of business has tended to have its own information relevant to its specific responsibility. But as the number of channels has exploded so has the number of iterations of the same customer within the business.
Understanding customer behaviour across channels is hard enough. Add to it the relentless pressure from online retailers such as Amazon and it isn’t surprising that so many well know names from the British high street have been lost in recent years. So how can retailers get the information they need and use it effectively to put themselves on the front foot?
Achieving a Single Customer View (SCV) has been seen as the holy grail of retail for a number of years now. But while pulling customer data together to give us a central view of each customer is clearly a good start, is SCV enough in today’s ever changing world? Customer facing organisations and retailers in particular should look to move towards a Customer Information Hub (CIH) to overcome data challenges and better target and build relationships with customers.
While SCV focuses on bringing together data on a single customer, CIH looks to extend that to all information relevant to that individual, including product information, data from the supply chain and marketing. Being able to pull this data together and underpin it with the right analytical tools enables the retailer to automate analysis of customer data and suggest the best way to respond to that data.
This could include automatically triggering a specific set of events, whether it suggests a personalised marketing action through a specific channel or red flagging a valuable customer that has gone dark and suggesting the best way to re-engage them. Moving towards a CIH model will enable businesses to provide customers with the same level of service across any channel. It can also help achieve better targeted marketing campaigns and in the longer term help devise the right strategy for the continued growth.
The first step in moving towards a CIH model is possibly the hardest. In an ultra competitive environment that is constantly changing, 90% of the time is spent reacting. Whether it’s the rise of a new channel, a move from a competitor or a change in customer behaviour the focus is on response.
To be able to predict and prepare for the future effectively the business needs to become more proactive. Understanding where the business is versus where it needs to be is a critical part of developing a strategic roadmap.
The next step is data integration which means having the ability to relate data to other pieces of information quickly and accurately. From a system point of view this is where the architecture becomes critical. Not only do you need to be able to bring together different types of data from different channels in different parts of the business, you also need to ensure that as new data streams come online they can be added into the mix easily.
It is also very important that at this point you are able to see the business as a whole. Customer data is just one piece of the puzzle. In order to get maximum value out of it you need to be able to combine it with information from across the business – from supply chain to product development.
Once the data has been brought together it then becomes about the analytics. Most retailers are still analysing data in siloes but with integration in place this should now bring all the data together and retailers can begin to look at the relationships that exist within it. Analytics should be relational as well as linear. Seemingly insignificant data can become very valuable when put into context alongside other pieces of information.
The final piece of the puzzle actually takes us back to the first element – planning. It is about taking the insight from the analytics to create a long term strategy for the business. Although the industry is changing quickly and plans need to be adaptable, without a focus for where the business is going built on accurate insight, retailers can get caught in a cycle of short-term goals and take a reactive rather than proactive view of the market.
Accurate insight, built on effective use of data gives a business the confidence to make that change.
Whether it’s CIH, SCV, social CRM, or creating a multi-channel strategy, what most companies really need is to take a step back and understand where they are, where the threats are coming from, what the opportunities look like and what can they learn from the mistakes made in the past – both by themselves and others. All of this relies on data and being able to understand what it is telling you and how different pieces relate to each other.
The biggest challenge for retailers looking to gain competitive advantage is being able to extract the kind of insights from their data that can help them plot the right path for their business moving forwards whilst building stronger customer relationships.
