Today’s customers are online 24/7 and expect personalized experiences in all interactions regardless of the channel they use to communicate with your brand. You, as an organization, have to create satisfying customer experiences by delivering the next best action based on the customer’s priorities.

The question is: why is data analytics a masterpiece in this crucial task?

I have recently had this discussion with my colleague Steven Hofmans, SAS CI Subject Matter Expert in South West Europe Region, and here are the results.

What’s the truth behind the data?

SH: Data holds clues about what your customers want, how they feel, how they like to engage with your brand, how often they would like to get in touch with you and how they react to your actions.

A simple example: Imagine you have to sell baby diapers and you have no data: what is the chance of selling a package of diapers to a random person? What if you have a list of persons with kids between 0-3 ? I bet you sell more.

What’s the relation between marketing analytics and customer experience?

SH: Using marketing analytics you understand and identify the customer needs and can improve the customer experience on different stages of the customer lifecycle.

For example, if a customer buys a product and you fail to delivered it (you delivered too late, product was broken etc..), the action you should take, may vary depending on if this is your first interaction with this customer or if the customer relationship is already established.

You might want to give the new customer a 20 % discount, in order to convince him to order again, and to offer just an apology for the second customer. But you would only be able to know this by analyzing each customer based on the data you have.

How does data analytics impact customer experience in practical terms?

SH: Every customer interaction is an opportunity to improve the customer experience. But you need both knowledge and actionable insights.

• Gathering data from every customer touchpoint and being able to analyze it in an automated way is key for determining what is the right decision for your customer at that moment. This is what customer data and analytics is all about.
• Second pillar is at what speed you are able to take a decision across channels. Sometimes you only have 3 seconds before the customer gets to your competitor’s website, so you need to apply actionable insights in real time. And that’s what real customer experience is about, reacting to a customer’s moment of truth.

What really drives value?

SH: There are three key business challenges I think are the most relevant.

The first is to get complete digital intelligence, and synchronize it with other data sources, including both online and offline interactions. This gives you a holistic view of prospects and customers

The second is to deliver insights at speed. Aggregating and analyzing customer insights can quickly become overwhelming because of the number and volume of data sources, and the challenge is to align stakeholders across the organization.

The third is to find a balance between what the customer wants and what your commercial objectives are as an organization.

Do all this right and you get real value.

Sounds logical. What about the barriers?

SH: In many organizations the customer journey is managed by different departments, with their own strategy. Building a 360 ° customer strategy requires synergies between online and offline, alignment in processes and forgetting about working in silos.

A second barrier is that many organizations struggle with the adoption of customer analytics because some people are afraid of losing control and relevance. Analytics is often seen as too complicated or advanced for marketers while it is the biggest game changer for a good customer experience.

Many companies want to leverage their customer data assets but lack the skills, resources, time and budget to act. Some companies also lack analytical resources and / or skills, and struggle to recruit them. Other customers are simply unsure on how to apply analytics, both the techniques and the processes, for the new digital, and 'Internet of Everything' world.

What KPIs should organizations consider?

SH: Organizations have different goals: to improve acquisition rates and lower acquisition costs by targeting the right prospects who are likely to convert and be profitable; to increase brand loyalty and customer lifetime value by providing a better customer experience, to identify cross-sell and upsell opportunities; or increase retention rates. Other useful KPIs are decrease in churn, or marketing agility. It really depends on the perspective you are looking at.

I totally agree! But what’s really driving the urgency for analytical adoption?

After three years of growth, marketing budgets hit a plateau in 2017, falling from 12.1% of company revenue in 2016 to 11.3% in 2017. The biggest share, 9.2%, went to marketing analytics, so this is clearly seen as a priority by CMOs. A massive 89% of marketers expect to compete on customer experience rather than price in future, and to do that, you have to become data-driven.