Turn on a dime: Business agility starts with customer data management
Business agility requires great customer data management. Understand customers with a single, enterprise-wide view of data to pivot on a dime.
Not long ago, a business executive asked me, “Everybody is saying that data is the new oil, but what does it mean for our company? What’s the value of our customer data?”
Let’s stop for a moment and think about this question. Would you have an answer for your organization?
A study by Forrester suggests that data-driven organizations are growing at an average of more than 30% annually, outpacing their competitors.
Having the right data and leveraging them is a way to execute better strategic decisions, optimize marketing spending, create superior customer experiences, and much more.
Enterprise, meet your customer.
Interactions, data, front and back office – connected.
It starts here.
An interesting study by Ocean Tomo highlighted another important element that helps us to get a better sense of the magnitude of the value of information: In 2020, 90% of S&P 500 market value is related to “intangible assets” – including data and software.
Data – and in particular customer data – today represent a key asset for an enterprise, but what’s their value?
Value hinges on a customer data strategy
In principle, the value of your customer data is equal to the incremental profit that you can generate from it. (Stock investors might see the parallel with enterprise market value – i.e., the sum of its future earnings).
There are many opinions on this topic. However there’s one point on which everybody seems to agree: in order to harness the value of customer data, enterprises need to take actions on them. Otherwise, capturing and maintaining customer data is nothing but an IT cost.
In other words, unleashing the value of customer data requires a customer data strategy.
But what is exactly a customer data strategy?
Google “data strategy definition” and you’ll find many different answers. However there are some similarities among the most authoritative sources, which tend to define it as follows:
- Customer data strategy is how a company will use data to generate value and achieve business goals
- It describes how a company manages data to generate value, i.e. collecting, storing, processing and distributing data
- It describes the changes the organization needs to make to maximize the value of its data activities
Redefining your customer data strategy for amazing results
New research shows how companies are taking a more comprehensive and customer-centric approach to customer data with an eye on a big payoff.
Start with customer obsession
Having a clear end in mind is always a good way to start, but many companies struggle when it comes to getting value from their customer data. Sometimes an IT organization implements a customer data platform and then looks back at their business colleagues to sadly realize that part of their effort was basically useless.
The business teams sponsoring the project and the perfect “customer 360 view” hope that it will miraculously tell them what to do next. It doesn’t work that way.
The right way to start deriving the most value from your customer data is… the customer!
Consider:
- At what time and on which channel I can best reach them?
- How can I immediately solve their problems when they’re on the phone with my call center?
- What’s the most relevant content to bring when I meet them in person or virtually?
- How can I turn a difficult situation (such as a late delivery of their order) into a positive experience?
Coming up with a list of three to four high-impact use cases is an exercise that requires a multifunctional team effort with a strong customer-obsessed mindset.
A siloed approach won’t work. For example, if the marketing team creates a new way to better target a specific audience, but doesn’t include the sales team (to consider which customers are driving more impact on revenues) or the call center (to consider complaints) or the operations team (to ensure that orders aren’t late), customer experience will suffer.
Customer centricity explained: Why CX matters in the data-driven era
Customer centricity is the act of putting your customers at the heart of everything an organization does. To be customer-centric, brands should consider a customer data platform - here’s why.
Calculating customer value
The selection of the right use cases – and consequently, your decision about what value you want from your data — is sometimes influenced by what you consider as easily available. This isn’t totally wrong, however, you might miss key details.
To illustrate the concept, here are a couple examples:
- If you have 50 unfulfilled orders, how important is it to ensure that — as soon as goods are available – you ship orders to your most strategic customers first?
- If you’re re-targeting your most important customers for a campaign, do you classify them as “most important” just by looking at their revenues? Wouldn’t it be better to rely on more relevant KPIs, such as returns, influence on social media, customer-level COGS, and spend your marketing budget based on the real customer lifetime value?
These examples lead to a couple of observations:
- The definition of “strategic” or “important” customer is always key information for any use case. Efficiency is a priority, and the ability to discern between high and low-value customers is more critical than ever.
- The value of customers must be calculated based on transactional elements (such as purchases) as well as back-office processes (returns).
Customer data platforms help companies make the right decisions based on data from both back-end processes (returns, profitability, real-time inventory) and customer-facing touchpoints (portals, e-commerce websites, apps).
CDP use cases: From marketing and CRM to the enterprise
Learn how customer data platforms have evolved beyond marketing to provide a deeper view of the customer for better CX and bottom-line benefits.
Strategy and team effort
The FIFA World Cup showed us that the value of a team doesn’t simply depend on the quality of the players, but also by the coach’s strategy and how defense, midfield and attack positions collaborate to execute it.
In a similar way, customer data can give your company competitive advantage if you’re able to define a clear strategy and act upon it in a collaborative way across functions.
