By Will Lowe, Chief Data Officer at consultancy Engine Transformation
These are tough times for many businesses, and that was before the global pandemic. Businesses are divided between those who are disrupting and those being disrupted, and their battleground is customer experience.
Disruptors know their value lies in the data and technology platforms they’ve created as start-ups, while established businesses need to invest to catch up. Investing in martech is easy to do with 30% of marketing budgets in 2019 being spent on technology, up 30% on 2018 – it’s a massively powerful enabler.
But if a business wants to transform its customer experience, investing in martech is not sufficient in isolation. There are 5 key ingredients for business success.
1. Setting clear objectives. It’s important to start with the end in mind. The business objectives around sales, margin and market share need to be translated into customer objectives in terms of targets for customer numbers, value and therefore rates of acquisition and retention.
Define the customer experiences required to deliver the customer objectives and what needs to be true from a data, analytics and technology perspective to make it happen. Look, for example, at Monzo’s and Revolut’s customer experience in personal finances compared to established banks, allowing greater visibility, immediacy and range of services.
2. The data and analytics platform to provide the right customer understanding to deliver the experiences. This requires the most rounded view of each individual customer through matching and de-duplication for accuracy. Value exists in customer insight, but business growth is delivered through experiences that deliver incremental behaviour, so being able to apply predictive analytics is essential in pre-empting and meeting customer needs.
For example, car brands bringing together their CRM data on length of ownership, with servicing data from dealerships and financial services data on contract lengths and residual value to predict who’s in market for a new car and using engagement data to predict the model of interest.
3. Technology platform. Businesses should be striving for always-on acquisition and retention, moving from batches of activity to many through reach, to targeted and personalised communications to groups and individuals with relevance. Technology needs to understand existing customers and prospects and be listening for signals and ready to react with communications across channels.
This workload has to be automated which requires the data platform to be reliable, the technology to be maximised and skilled people to be overseeing the activity. For example, DIY retailers moving from one email a week to their entire customer base showcasing great deals before the weekend, to communications that select the products, channel of communication and timing based on learnings from previous engagement and current propensity scores.
4. The right team of people and processes with appropriate skills, aligned with the business’ natural rhythm and ways-of-working. Moving from businesses operating in silos around channels, to a shared view of the customer across channel. This often requires changes to how commercial teams budget and structure themselves and their activities, including the KPIs they set and how they report.
Everyone needs to understand the levers they have and the KPIs they impact through the funnel from awareness to loyalty. For example, part of the decision to buy martech is whether the business is going to in-house or outsource its operation. Martech is expensive so it has to return value and that requires expertise which often doesn’t exist internally.
5. The right culture, obsessed with customer experience and delivering targets for customer numbers, customer value and satisfaction. A culture that is committed to be constantly testing and learning, driven by data and optimisation. Businesses need to bring the culture of pure ecommerce into their practices, with measurement through the funnel to understand how the targets are being missed or met, looking at volumes, values and conversion rates.
This is true right across Amazon’s business from individuals picking products in their distribution centres to those managing categories for new sales and returns. Realtime scorecards show performance against benchmarks and targets allowing immediate decisions on how to improve performance.
Some of these are foundational, some may always be works in progress. But none of them can happen overnight.
