beyond analysis: big data touchpaper dec 2012

Big DataPutting you back in control of yourcustomer relationships

ContentAre you a Big Data believer? Data, data everywhereNew data sources are appearing all the timeSo, where to start? Short term rewards reap long term gainWhere to begin your Big Data journey?To data infinity … and beyondAbout Paul Hinds

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Are you a Big Data believer?

What the Big Data debate has done is ensured that data itself has caught up with the aspiration of what businesses would like to do with it. Technology is now truly an enabler to achieve this, both in the ‘back office’ environment (which is increasingly in the Cloud) and direct customer touchpoints, such as mobile Apps. We are closer than ever to having truly personalised customer engagement and relationships.

Big Data, however, is nothing new. It’s simply about joining the dots of all the relevant data sources. Whether it is customer data, local market data or communications data, every company out there has at least one data source at its fingertips.

Some organisations have been doing this for years, but Big Data is all about doing it better and using data to positively impact the customer.

Data, data everywhere

The key challenges are the explosion of data and how to collect it. The rapid emergence of new payment methods, such as mobile wallets, together with digital technologies, have revolutionised a business’s relationship with its customers. Long gone are the days when loyalty cards were the only way to identify and collect customer data. Increasingly retailers are using their online customer base as the equivalent of a loyalty scheme – they’re

Do you remember when CRM was the next big thing? It was supposed to deliver ultimate customer engagement. In reality, it was all about software; and very expensive software at that.

Sure, these expensive CRM software solutions did deliver a certain amount of segmentation, but they generally did not get to the heart of the issue – that the data itself was generally not very good in

terms of quality.So what about Big Data? Is it the new CRM; the next Dot-com; the big brother of Web 2.0? If Google

search data is anything to go by, maybe not:

using the same data and channels without the need to maintain a separate currency for loyalty.

Today, with multiple ways to identify a customer across a growing number of channels, it’s all about Big Data; multiple data sources – both internal and external – being brought together to put the customer at the heart of business strategy.

Businesses everywhere are under pressure to better understand, engage with and respond to their customers. This requires data, and lots of it. The good news is that there is so much wonderful behavioural data out there, ready and waiting to be put to good use. The bad news is that although the opportunities for harnessing this data are pretty much infinite, the issues are also increasingly complex; particularly as the journey from need or desire through to purchase becomes less predictable than ever before. Analysing your data and quickly acting on the resulting insight is, therefore, crucial. Just knowing what a customer bought, whether a product or a service, is no longer enough; businesses need to understand long term consumer behaviour, what customers are doing before or after they make their purchase, and what their interests and aspirations are.

Digital channels have added a whole new dimension to the data debate, with new streams of ‘live’ data coming direct to a company from their customers. The advent of social media in particular has led to a

huge increase in direct customer interaction and feedback. For those who have been slow to embrace the brave new online world, the rise in social networks has been a rude awakening. Many are now being forced to re-think their online strategies.

Amazon is something of a poster child for Big Data. They have, in essence, a very simple data model. They don’t have stores and they don’t have a loyalty scheme per-se. Their version of Big Data uses the huge volumes of customer and payment data that they have at their fingertips to personalise the online shopping experience and offer products that are related to what their data tells them about the lifestyles and preferences of their customers.

Along with ebay they have set the standard for providing a forum for sharing customer feedback on products (and now partner retailers) and measuring customer satisfaction.

They grow their data asset still further by prompting customers to share more information and confirm the intelligent assumptions that they make based on statistical models. Just glancing at my one ‘Amazon Betterizer’ page shows how well they know me from mining their version of Big Data - they know I am a parent, where I have been on holiday and target incremental spend by offering further categories for me to shop in:

New data sources are appearing all the time

In addition to all the data now being generated through digital touchpoints, new commercial data sources are also available which bring a third dimension to customer insight. Previously, businesses have been able to use their data to see which customers are shopping through their stores and channels, and which of their products they are buying.

A recurring challenge is how to accurately determine what their customers are doing when they’re not shopping with them. Which of their competitors are also on their shopping list? How frequently and how much are they spending with other brands? What does this behaviour say about their customers in terms of preferences, lifestage, purchasing power and brand loyalty?

SpendographicsTM which we’ve developed in partnership with Visa Europe, helps businesses to understand their customers on the basis that ‘they are what, where, when and how they spend’ – a monumental departure from the traditional and, some would say, outdated geo-demographic profiles generally used to drive customer segmentations.

This new segmentation tool improves the resolution at which consumer behaviour can be analysed and works at a market, brand and sector level. Individuals are grouped into 10 different “spender modes”, which comprise people with similar characteristics and behaviours who can be communicated with in a consistent and targeted manner. The segments have been given a name, tagline and pen portrait to help understand their spend behaviour and how to engage with them. This insight can be used to improve business performance at both strategic and tactical level.

SPEND BEHAVIOUR

POS CHANNELS

Urban spenders are very active, using their card a large amount (especially in the afternoon/evening) for both cash withdrawals and card transactions across a wide range of merchants. Being commuter-types, they spend a significant proportion of their budget on TFL and rail tickets. Their social agenda is packed and these spenders often frequent bars, restaurants and clothes shops. They enjoy a high quality of life and are therefore likely to go to a gym or health-club and although they spend less than others in supermarkets (possibly because they like to eat out), when they do they will visit the high-end grocers. They are also active online and use their cards with online retailers and budget airlines.

CARDS - 1.9M OF 68M

3%

SPEND - £12.8B OF £335B

4%

URBAN SPENDERS WORK HARD, PLAY HARDER

£6,908

2%

£26

SALES METRICS

ATV

ANNUAL SPC

INT’L SPEND

97%

1%

3%

CARD TYPE

CREDIT

DEBIT

COMMERCIAL

CARD USE: 5 TIMES A WEEK

TRANSPORT

14%

3%

6*

6%

CLOTHING

8%

8*ENTERTAINMENT

15%

8%

24*

64% 26% 10%

FACE TO FACE ONLINE MAIL / TELEORDER

BUDGET YOUTHORIENTED

MORE LIKELY TO... LESS LIKELY TO...LIFESTYLE INDICATORS

SPEND BEHAVIOUR SHOPPING HABITS

MATUREMARKET

GYM MEMBERSHIPHAVE KIDSHAVE A PETHAVE A CAR CITYSPENDERS

SHOPPING HABITS

TOP THREE SECTORS DIFFERENTIALS

COMPARED TO THE UK TOTAL, THESE CARDHOLDERS ARE MORE LIKELY TO SPEND MORE IN THE AREAS //

WHERE CAN YOU FIND THEM

* NUMBER OF DIFFERENT BRANDS WITHIN THIS SECTOR

ENTERTAINMENT15%

SUPERMARKET14%

TRANSPORT14%

TOP THREE SECTORS BY SPEND8%AV. 18%AV. 3%AV.

AV.

AV.

AV.

AV.

AV.

AV.

£6,908

2%

£26

SALES METRICS

ATV

ANNUAL SPC

INT’L SPEND

AV.

AV.

AV.

97%

1%

3%

CARD TYPE

CREDIT

DEBIT

COMMERCIAL

AV.

AV.

AV.

19%AV.22%AV.59%AV.

SOCIALHOMEIMPROVEMENTS

SUPERMARKET14%

18%AV.

TRANSPORT14%

3%AV.

ENTERTAINMENT15%

8%AV.

So, where to start?

It’s not as hard as some are making out to make Big Data deliver a quick return for your business. The mistake many companies make is trying to bring all of it together, all at once.

Take the time to understand what your version of Big Data needs to look like for your company and your customers; then pick one area of focus and put your energy and resources into that.

Collecting, interpreting and acting effectively on your customer data can be a real differentiator in terms of developing positive customer relationships and loyalty. It can provide the best possible competitive advantage; it is your chance to make sure that you put their needs at the heart of your decisions around product, price, place, promotion and people (yes, that old marketing classic).

LOCAL MARKET DATAGeography housingtypes competitors

PRODUCT DATABrand Style type

etc.

Financial Sales

Warehouse Store COMMUNICATIONSAND PROMOTIONS

Online Customer behaviour

www.

Purchases Reviews Searches

Feedback, reviewsprice comparison

Home

Customers

CUSTOMER DATABasket and trolley

data overtime

Payment Cards

Loyalty CardsE-mail, Address, Name

Voice of theCustomer

Customer Care

Focus group

Service and product.Feedback and opinions

LOCAL MARKET DATAGeography housingtypes competitors


etc.

Financial Sales



www.



Home

Customers


data overtime

Payment Cards



Customer Care

Focus group


From this...

To this...LOCAL MARKET DATAGeography housingtypes competitors


etc.

Financial Sales



www.



Home

Customers


data overtime

Payment Cards



Customer Care

Focus group


Understand what your version of Big Data needs to look like for your

business and your customers.

Short term rewards reap long term gain

Although true customer loyalty is about long term retention and engagement, in today’s challenging economic environment retailers need to act fast to entice new customers and win back the lapsed. Customers are less and less likely to wait around for their reward; they want instant recognition and gratification. The trick for retailers is to deliver this loyalty kick without devaluing their brand offering. We all know of high profile retailers that are all about discounts and vouchers; savvy customers will rarely buy from them at full price when you can search online for a 20% off code.

For example, Beyond Analysis is working with a leading South African retailer to use their loyalty scheme differently in order to:

- Drive more spend and visits from their top shoppers- Win back dormant and lapsed customers, and- Ensure customer retention in key categories and locations

We used customer behavioural data to construct campaigns which were both relevant to customers and met the client’s strategic objectives. Using 12 months’ worth of data, we undertook a customer behaviour analysis, identified core target segments and built tailored offers to meet their needs.

These offers were delivered to customers in 32 different campaigns over 8 weeks.

The results have been astonishing: an overall redemption rate of 13% across all campaigns, with some cells getting as high as 54%. We won back 3% of customer who had not visited a store for 6 months. And we identified the categories with the best opportunity for retention.

Interestingly, new media channels were a key component part of the success of these campaigns, including the use of optimised barcodes for SMS. And it doesn’t end there; the results of these data-led tests have formed the foundation for the business case to apply the benefits of insight to all areas of the business, from promotions to store merchandising.

This is the power of data in action.

Where to begin your Big Data journey?

1. Be clear on your business objectives, and those of your customers

2. Understand what data you have right now (and what you don’t)

3. Align 1 & 2 and then create your own Big Data plan

4. This should NOT be a 3 year, all-singing all-dancing plan; plan in detail for the first 12 months, then in high level for years 2 and 3

5. Only include actions that can be tested and measured – so you can learn and develop proof points

6. Be committed to your data; if you’re in it for the long haul, so will be your customers

Here’s the Beyond Analysis 6 point plan for getting started:

To data infinity … and beyondThe future is about intelligent customer engagement. It’s about marketing to and engaging with the individual. To achieve that, we need to know what customers think, and to understand what they do and why. In order to know all that, we need to listen.

In today’s challenging and competitive economic climate, we must reassess whose views matter. Our employees, partners and customers could just be the best people to tell us how to make our business succeed.

Do it right and do it consistently, and loyalty and engagement will be the happy result.

Since graduation Paul has spent the majority of his professional life working in data insight consultancy and customer strategy.

His core skills centre upon strategy development, programme design and stakeholder engagement with the focus on delivering actionable insight that make a tangible difference to the organisations with which he works.

Paul is passionate about ensuring Beyond Analysis does everything possible to enhance client understanding of their customers and maximise the value of their data asset to provide relevant information that has a meaningful commercial impact.

In his spare time Paul can be found persuading his 3 year old son Lucas that Liverpool FC are the team he should be supporting and serving charred meat at family barbeques, whatever the weather.

About Paul Hinds

Paul Hinds

[email protected]

London office0208 875 7099Please contact Paul Hinds for further information about the paper and for enquiries regarding how Beyond Analysis can help your business.

Author

Beyond Analysis Limited. Registered Office: Unit 10 - 12, 116 Putney Bridge Road, London SW15 2NQRegistered in England. RGN: 06059028

T: +44 (0)20 8875 7020 W: www.beyondanalysis.net F: +44 (0)20 8875 7099

About Beyond Analysis

Beyond Analysis is a leading customer insight and strategy business. We believe that the customer should be at the heart of everything we and our clients do. And we’re passionate about using the power of data to

achieve this: finding it; collating it; interpreting it; unlocking its value.

We work with some of the world’s largest consumer brands to harness the power of their data and adopt a customer-led approach to their decision making. We bring together multiple data sources to interpret

consumer trends and give our clients a clear line of sight to help them grow their business.

We have offices in London, Sydney, Singapore and Denver.

Beyond Analysis 2012Thought leadership series

beyond analysis: big data touchpaper dec 2012

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