A white paper discussing that surveys such as VIRTUATell’s IS the “missing link” when using technology analytics.
- Using Analytics alone, is like looking at a house through a letterbox!
- Analytics is an overview only – customers are individuals
- Analytics can give a false guide
- If you use analytics you must use something customer specific as well
- Using Analytics only is like looking at a house through a letterbox (we could do with some cleverer images to describe analytics)
The gap between data analytics and research is now being closed as marketers realise how valuable this marriage can be for customer insight. Louise Druce looks at how firms are putting this into action and what it means for customer experience.
By Louise Druce, editor
Businesses are in no doubt that customer insight is invaluable – and moreso than ever during a downturn. Yet, despite this, market research and data analytics haven’t always gone hand in hand. Now, however, agencies on both sides of the fence are wising up to the benefits of such a union – and presenting customer-focused businesses with an appealing proposition to deal with their traditional research and analysis challenges.
In February 2009, data solutions provider EuroDirect and communications and insight specialists Broadsystem became the latest firms from their collective fields to merge, forming Callcredit Marketing Solutions. With Broadsystem specialising in customer insight and touchpoints, and EuroDirect owning a wealth of data assets and capabilities, the merger allowed the two sides of the business to be brought together in order to provide clients with a more joined up, comprehensive service.
“The issue with customer insight is that many businesses start research projects but fail to follow them through and utilise the results properly.”
Caroline Worboys, managing director, Callcredit Marketing Solutions.
“The issue with customer insight is that many businesses start research projects but fail to follow them through and utilise the results properly,” says Caroline Worboys, managing director of Callcredit Marketing Solutions. “Many companies undertake qualitative research programmes in order to build customer profiles, using simple techniques such as focus groups and questionnaires. Where they struggle is then overlaying the findings from these sessions onto their wider customer base, and using this information to deliver effective communications strategies. For example, if the qualitative research shows up 10 different customer types or segments, the trick is then how to effectively divide up your customer database so that it fits into these segments.”
She says one solution is to build your research panel using people who sit within specific classifications in your existing database. This means that attitudinal data can then easily be fed back into the system, without having to work out new classifications. “This approach means that a lot less work is needed to match the research with the data, leading to a swifter, more effective result for clients,” Worboys explains. “Another advantage of adding an analytical approach is that your data will be more robust and multi-layered as a result. For example, if geo-demographic data gained through analysis is added to the attitudinal information acquired through research, marketers are then better placed to gauge consumers’ preferences.”
She believes the benefits of combining research techniques with data analysis are considerable for both clients and their consumers. “For clients, it enables them to establish which of their customers are more likely to have specific attitudes and, as a result, they can feed this information into their database and deliver targeted and relevant communications,” says Worboys. “For consumers, because their attitudinal and prospect data is combined, they will be treated less like numbers in a system and, instead, will receive information and services that are specifically tailored to their own needs and requirements.”
Full view of the customer
Dorothy Kelly, senior manager at business consultants Distinct Consulting, also demonstrates how research and analytics were successfully brought together for improved marketing insight in a mobile telecommunications company. “After years of growth through acquisition, there was a move in marketing strategy to bring the customer to the centre of the organisation. It was recognised that propositions should be developed from true customer insights,” she explains
“At the time, analytics sat in operations. Their work had little strategic context and was primarily driven by user requests. Once analyses were delivered, they would often need to be reworked as they answered the wrong business question. Research sat in marketing. The work was request driven, ad hoc and not strategic. The research would be delivered, used for one purpose and forgotten. Customer insight was not seen as being something just analysis or research could produce in isolation, so the organisational structure was reviewed.
The aim of the review was to ensure a consultative approach to insights generation with a solid strategic context and to use a full view of the customer when addressing business problems. With this in mind, a customer insights team was created, consisting of market research, data mining and analytics, and campaigns execution, with the head reporting to the marketing director.
“There is effort involved in getting more technical resources to think like marketers and research resources to grasp more complex analytical concepts.”
Dorothy Kelly, senior manager, Distinct Consulting.
An insights generation process was developed to provide a framework for the collaboration between the two disciplines to:
* Define the business problem from the customer’s perspective.
* Build a view of the key questions that need to be answered to address the business issue.
* Identify existing data sources (across research and analysis) and identify gaps.
* Build an analytics and research plan to fill the gaps.
– Review all the resultant data sources in a workshop with relevant business owners, identify trends and generate insights.
* Build action from the insight.
The collaboration also facilitated the development of hybrid marketing tools such as a customer segmentation based on cluster analysis of transactional data, augmented by research, to understand the usage groups’ differentiating needs and motivations.
“There is effort involved in getting more technical resources to think like marketers and research resources to grasp more complex analytical concepts. But the crossover of skills such as statistics, analytical capabilities and seeing the customer in data aided in their respective up-skilling,” says Kelly. “There have been issues in identifying senior resources with skills in both areas to head up such teams, highlighting a need for effective succession planning.” However, she adds that the effort is relatively minor in the context of the potential benefits of such an organisational structure and processes including:
* Cost reduction – reusing existing research and data
* Moving from reactive ad hoc work to proactive true insights generation.
* Developing a 360 view of the customer.
* Ensuring research is in context and not used to answer questions that can be addressed through relatively low cost analytics.
* Enhancing analytics with the customer perspective only provided by talking to them.
Ian Robinson, chief intelligence officer at digital and direct marketing agency TMW, also agrees that the fusing together of market research and customer database insights can be of massive value. “Customer databases provide detailed information about the behaviour of individual customers which can be invaluable in driving personalised CRM communications. However, this gives a limited perspective as it only tracks customer interactions with the brand that owns the database,” he says. “Add in market research and you can then see the wider context in which they take place – and this can put a very different complexion on the customer.”
The firm carried out a database segmentation of an airline’s frequent fliers, which revealed eight distinct segments comprising fliers that varied dramatically in their extent and nature of their airline patronage. The segmentation insights helped to tailor CRM communications to stimulate higher frequency flying and greater usage of profitable premium cabins. The greater relevance resulted in marketing campaigns that generated a healthy ROI. However, focus groups were then conducted with members of the segments to provide a more holistic view of their overall business flying across all airlines. This revealed a hither-to undiscovered dimension of behaviour which revolutionised its thinking behind the way in which frequent flier programmes (FFPs) affected airline choice.
“Metaphorically, we had been given a brand new pair of 3D glasses.”
Ian Robinson, chief intelligence officer, TMW
“We identified that FFP members viewed the reward of air miles, redeemable against personal flights, as an important work benefit, and they had an interesting way of maximising this,” Robinson explains. “They knew that rewards increased if they achieved ‘silver’ or ‘gold’ status as they would be given a higher air miles earn rate. They also knew that long-haul flights were rewarded with generous quantities of air miles, but they travelled long-haul much less frequently. As a result, members tended to give all their short-haul flights to the airline, which enabled them to reach silver or gold status more quickly. Once this had been achieved, the obliging airline would then also receive the profitable long-haul business class flights so it was possible to earn even more air miles.”
He says the strategic implications of these findings were immense. “Many low value members were never going to reach silver status as their short haul flying needs could not be met efficiently by the airline’s schedule. Any communications incentivising short-haul to these members were, therefore, a complete waste of money. However, offering incentives on the less frequent but highly profitable, long-haul flying where the airline’s departure times were not so important was far more effective,” says Robinson. “Conversely, it became clear that ring-fencing frequent short-haul fliers against competitors who offered viable alternatives was an essential tool in protecting the lucrative long-haul custom.”
Robinson claims that without research, this behaviour would never have been identified and without the database, exploiting the opportunity would not have been possible. “Metaphorically, we had been given a brand new pair of 3D glasses,” he concludes.