the future of customer engagement and data driven marketing
TRANSCRIPT
intelligent intuitive
insight Copyright © Ikano Insight 2016. All rights reserved.
The future of customer engagement
& data driven marketing
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intelligent intuitive
insight Copyright © Ikano Insight 2016. All rights reserved.
Introduction
Customer engagement and data driven marketing is changing, and
businesses need to transform their thinking to meet changing consumer
demands as well as keeping up with new technologies and ways to
capture and use data. But, delivery of best in class customer experience
remains at the heart of this. So how is this shaping businesses today?
Are they keeping up, or are they struggling to evolve?
Ikano Insight conducted qualitative & quantitative research to
understand current views around customer engagement and data
driven marketing as well as future trends. An online questionnaire was
sent by email to marketing, loyalty and data professionals across
industries including retail, hospitality, leisure, and food & beverage.
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insight Copyright © Ikano Insight 2016. All rights reserved.
Contents
Key Findings .............................................................................. 3
The Results ................................................................................. 5
Q1. Is customer loyalty dead? ............................................... 6
Q2. Which aspects of customer loyalty, engagement &
insight add the most value to businesses? ........................ 8
Q3. Do businesses currently understand and value
customer insight? ................................................................... 10
Q4. How well does customer data support decision-
making in businesses? ........................................................... 11
Q5. Which types of customer insight would help
marketers and data professionals to do their jobs
better? ....................................................................................... 12
Q6. Who actually utilises campaign results or customer
insights? .................................................................................... 13
Q7. How many businesses have an overall customer
experience budget? ............................................................... 15
Q8. How are businesses currently using customer
loyalty, engagement and insight? ...................................... 16
Q9. What are the barriers to achieving great customer
engagement and insight? ..................................................... 17
Q10. Which trends will affect businesses in 2016? ......... 18
Summary.................................................................................. 20
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insight Copyright © Ikano Insight 2016. All rights reserved.
Key Findings
Customer Engagement & Loyalty
Customer loyalty is very much alive and kicking, but
93% of respondents believe that it needs to change
and evolve in response to increasingly sophisticated
customer expectations around personalisation and
omni-channel customer experience.
Having a solid customer engagement strategy and actionable customer
insights were seen as the highest priorities for all respondents when it
came to adding value to their organisations. However, only 10% of
organisations had a single ‘holistic’ customer experience budget. In
most cases the budget was split across traditional departmental silos;
the drawback of this approach is that the results also indicate that
customer data and insight is not being shared across departments and
applied throughout the whole business. This of course leads to decisions
being made from different perspectives, with conflicting priorities.
Budget is seen as one of the primary barriers to greater levels of
customer engagement, which impacts on other barriers including a lack
of customer data, or the technology to access this data.
Use of actionable Insight
It seems that whilst aware of its importance, few
respondents have a view of the real impact of their
customer insight and engagement activity.
All respondents had some kind of campaign management or CRM
system, but the data and insight coming from these systems is not used
to inform the way their whole business was run. Given the increasing
number of companies who claim to be ‘customer centric’ or ‘put the
customer at the heart of everything they do’ this is perhaps surprising,
and may suggest that more organisations pay lip-service to the idea
rather than display the behaviour within their business.
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insight Copyright © Ikano Insight 2016. All rights reserved.
Data
There is a sense that businesses are generally data
rich but information poor. Data is being collected but
is not formulated or presented in a way that is useful
and relevant across the organisation.
Only 10% of respondents claimed that their organisation was fully data
driven whilst, at the other end of the scale, 20% had only recently
started to use customer information to support decision-making.
Encouragingly, 70% of those surveyed now have some kind of simple
dashboard combining customer data and other business performance
data, showing a promising acknowledgement that the two data sources
should be used in partnership.
The Future
89% of respondents identified customer
segmentation and targeting as the most prominent
trend that would impact upon their business in 2016,
highlighting awareness of the importance of providing personal,
relevant and meaningful communications and experiences to connect
with consumers.
Our survey highlights that businesses are aware that customer
loyalty is changing – and that change is being customer-led.
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insight Copyright © Ikano Insight 2016. All rights reserved.
The Results
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insight Copyright © Ikano Insight 2016. All rights reserved.
Q1. Is customer loyalty dead?
Loyalty is still very much alive and kicking…
…but 93% of respondents believe that the concept of customer loyalty
needs to evolve in order to better engage today’s consumers. Today,
building customer loyalty is less about the psychology of collecting
points, but is about engaging with customers on their terms consistently
through all channels. Areas where respondents felt that customer
loyalty needed to evolve were around:
Moving from incentives to service
Whilst incentivising purchases are still core to many loyalty
programmes, many customers now want more than this and
expect a seamless omni-channel customer experience across all
touch points, regardless of device. Service can also act as an
incentive; for example giving your most loyal customers VIP
treatment with personal shopping experiences or access to
exclusive events.
Creating a more personalised approach
Consumer preference is now at the forefront of building
engagement; from letting them choose when and how you can
interact with them, personalising everything from their name and
product recommendations on your website, through to offering a
choice of rewards from your loyalty programme.
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Finding insights from a wealth of data
With a sea of big data at your fingertips it can be difficult to
know where to begin, so make sure you’re only collecting data
that is relevant - ask yourself ‘So what? What’s the data telling
me?’ This is your first step to producing actionable insight, and
together with a greater knowledge of customers’ needs and
desires you have the possibility to segment and target different
customer groups with relevant messaging in order to drive the
relevant behaviours and increase the ROI of your marketing
spend.
Driving repeat purchases
The insight gained from analysis of customer spend behaviours
will build a picture of their characteristics, enabling you to
develop better targeted triggered communications with the right
product at the right time to drive repeat purchasing. Combine
this with a loyalty programme, and you will further incentivise
and encourage your customers to spend more per transaction
and increase the frequency of their spend.
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insight Copyright © Ikano Insight 2016. All rights reserved.
Q2. Which aspects of customer loyalty,
engagement & insight add the most value to
businesses?
In order of importance, respondents rated which aspects of customer
loyalty, engagement and insight would add the most value to their
business:
1) A customer engagement strategy
2) Analysis of customer data to deliver actionable insight
3) Campaign management & CRM
4) A simple dashboard that combines business and customer
data
5) A tool to manage customer loyalty
6) CRM software
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insight Copyright © Ikano Insight 2016. All rights reserved.
70% rated customer engagement strategy as their first priority, with
analysis of customer data to deliver actionable insight a clear second
priority at 69%. This isn’t too surprising, as engagement and customer
insight work hand in hand. By conducting data driven marketing
activity you can track customer engagement patterns and behaviours
across multiple touch-points. This allows refinement and targeting of
marketing efforts through CRM campaigns (rated as the 3rd most
important) - for example, creating relevant content that makes your
brand more ‘sticky’ to the customer.
Interestingly, whilst campaign management and CRM (segmentation
and targeting) were rated 3rd place, actually owning a piece of CRM
software was rated as least important in terms of adding value to a
business. Without the software it would be impossible to complete any
segmentation or targeting, suggesting that businesses may be
considering outsourcing their CRM activity.
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insight Copyright © Ikano Insight 2016. All rights reserved.
Q3. Do businesses currently understand and
value customer insight?
Interestingly, no respondents said that their business was already using
customer insight to inform the way their whole business was run. 60%
were making some use of customer data but felt they could better
utilise the learnings they received.
No respondents said that customer insight wasn’t a priority, implying
that whilst most are aware of the value of insight there is still a way to
go in terms of integrating and using it to make meaningful decisions
across businesses.
Customer data should provide the insight to understand customer
patterns and behaviours so that you can align your entire business
around actual customer needs and demands. According to research by
Deloitte, customer centric businesses are 60% more profitable than
those who don’t focus on the customer.
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insight Copyright © Ikano Insight 2016. All rights reserved.
Q4. How well does customer data support
decision-making in businesses?
Just 10% of respondents said that their business was already fully data
driven. 20% had just started to understand their customer data whilst
the vast majority (70%) felt that more could be done to use and
understand the customer data that was available to them.
Similarly to the previous question, we can see that businesses are
aware of the value and variety of customer data available to them but
they are not actively using it; and it is apparent that data driven
decision-making is an emerging concept. The results may highlight a
possible knowledge gap on how to apply insight to data, or how to
aggregate data sources - suggesting that businesses may need
external support or training to create a bigger picture from their data.
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insight Copyright © Ikano Insight 2016. All rights reserved.
Q5. Which types of customer insight would help
marketers and data professionals to do their
jobs better?
Clear themes emerged in how customer insight can be used more
effectively to:
Map the full customer journey
Understand how and why customers use different channels
Link CRM activity to purchase patterns, customer
behaviours and value
Learn which factors drive the purchase decision, including
behavioural triggers and the range of competitors that
customers consider on the path to purchase
Understand the help and assistance customers are looking
for
A key pattern which runs through the above themes is linking data
and/or customer research (which probably already exists within the
organisation) to the reality of customer behaviour; understanding why
and when customers purchase and through which channels.
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insight Copyright © Ikano Insight 2016. All rights reserved.
Q6. Who actually utilises campaign results or
customer insights?
Responses show that within most businesses, there is an absence of
leveraging customer insights across the organisation. Just 60% of
businesses use customer insights and campaign results within their
marketing department - the one business area that you’d most expect
to be using insight to drive campaigns and strategy.
Insight doesn’t just come from simple click-throughs or social media
likes; but from far richer sources such as purchasing and web
behaviours, customer reviews, call listening, feedback surveys, on-
premise activity and wider consumer trends to name a few. These
sources of data sit across the whole business and so it’s remarkable
(but probably not unexpected) that very few departments make any
use of the valuable insight that could be gained. Take the
merchandising team for example; knowing which products are selling
best in a particular store or which ones receive top reviews is surely a
simple and yet incredibly powerful insight to inform their decisions?
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insight Copyright © Ikano Insight 2016. All rights reserved.
Insight can drive a business’s future growth by ensuring that all
departmental budgets are spent efficiently and effectively to deliver
maximum revenue.
The results highlight that departments are very much operating in silos
and data is not shared or used cross-departmentally. To utilise the full
value of customer data, it needs to be made relevant to all support
functions as well as customer-facing parts of the organisation.
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insight Copyright © Ikano Insight 2016. All rights reserved.
Q7. How many businesses have an overall
customer experience budget?
Just 10% of businesses had a single customer experience budget
that covered all aspects of customer engagement.
For 80% of respondents, the budget was split across different
departments within the organisation, reinforcing our opinion that many
departments are still operating in silos. The previous question showed
us that not all of these departments have access to the same
information and the same ‘customer view’, and so the customer
experience budget is likely to be spent in an uncoordinated way.
It’s now time to invest in teams that focus on optimising the customers’
journey, interactions and experience across all of the different touch-
points. As we’ve discussed, customer experience impacts on all areas
of the business and it is crucial that a culture of customer centricity is
reinforced and maintained to ensure that you are an agile, customer-
focused and forward-thinking business that can withstand the changing
consumer landscape for years to come.
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insight Copyright © Ikano Insight 2016. All rights reserved.
Q8. How are businesses currently using customer
loyalty, engagement and insight?
All respondents use some kind of CRM campaign management to
segment and target customers; with a nearly 50:50 split between those
who do this in-house vs. those who outsource. In addition to this, over
50% outsource their CRM software. Whilst some respondents are
happy to run their own campaigns, few have their own in-house tools
and so rely on external suppliers to provide them with the technical
software and/or campaign management.
78% coordinate their customer engagement strategy in-house; however
an equal percentage do not use any tools to manage customer loyalty,
suggesting that they do not run a loyalty programme. This is an
interesting response considering that many respondents highlighted the
importance of becoming a data driven organisation and also their
belief that customer loyalty needs to evolve – all of which could be
delivered through a modern loyalty programme which engages the
customer on their terms.
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insight Copyright © Ikano Insight 2016. All rights reserved.
Q9. What are the barriers to achieving great
customer engagement and insight?
Budget was the biggest barrier to achieving greater customer
engagement and insight. Whilst there are many variables in how much
a customer insight and engagement strategy will cost you, there are
options available for all budgets.
44% said that knowledge gaps, lack of customer data and not having
the right technology in place all got in the way of achieving greater
levels of customer engagement, all of which may be a reflection of
budget constraints.
Not having suitable technology in place is linked to a lack of customer
data - to collect and analyse data from disparate sources you must
have technology which is fit for purpose and ultimately delivers you
with a Single Customer View to understand your customers and drive
behaviours. Data driven marketing is completely measurable, and its
use allows you to prove a case that for every £1 spent you could
achieve a £6 return (as some of our partners have).
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insight Copyright © Ikano Insight 2016. All rights reserved.
Q10. Which trends will affect businesses in 2016? 89% of respondents identified customer segmentation and
targeting as a key trend that would impact upon their business in
2016.
Segmentation provides you with a view of your core customer types
and enables you to understand the best way to drive value; which
channels to use; how to retain customers; and even who to ignore -
creating a long term contact strategy for each customer type, which of
course will feed into your campaign targeting.
Whether in-store, online, or on-the-go; customers now expect
personalised, relevant and streamlined experiences across all channels.
Technology brings with it a plethora of data and targeting
opportunities, including demographic segmentation to send timely and
contextual communications using location-based technologies: to the
right people, in the right place, at the right time.
To segment successfully, always start with the data and ensure that all
relevant data is considered (e.g. calls into your call centre, social media
data, purchasing history). The better you know your customers and
communicate accordingly, the more likely they are to stay loyal.
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insight Copyright © Ikano Insight 2016. All rights reserved.
Q10. Which trends will affect businesses in 2016?
(continued)
Linking social media engagement data to customer data within a
CRM system was another emerging trend.
This is an area that we are particularly interested in, and have recently
published a guide on Linking Social Media & Customer Loyalty. The
data leveraged from those who opt-in to share their social media
activity with you creates a more sophisticated picture of your
customers, as well as a depth of understanding which can be used to
segment and target specific groups. But, for a customer to grant you
access to their digital lives, you must give them something in return, for
example rewarding them for engagement or connecting their social
media profile to their online account.
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insight Copyright © Ikano Insight 2016. All rights reserved.
Summary
Customer loyalty needs to change and evolve in response to
increasingly sophisticated customer expectations, and so a solid
customer engagement strategy and actionable customer insights are
essential for businesses to meet this demand.
Rather than operating in silos, insight and budget needs to be shared
and allocated accordingly in order to deliver customer experience
excellency. When collecting data, make sure that it drives the
actionable insights which support decision-making and helps you to
deliver personal, relevant communications to your customers.
The successful businesses of the future will be those who
genuinely become customer centric and understand the impact of
all major business decisions on their customers.
intelligent intuitive
insight Copyright © Ikano Insight 2016. All rights reserved.