A perspective from Moorhouse Consulting:
Engaging a digital customer requires harnessing the power of data, embedding customer focus across the digital ecosystem, and enabling agility through a technology bedrock.
Technology has made it easier to reach customers and more challenging to impress them. Organisations in all sectors today are desperate to win the attention of customers. For example, consumers can now get 3D printed vitamins, use virtual reality to shop for holidays and even get suggestions on their hairstyle from their smart mirrors. To illustrate the seismic change in consumer behaviours, we use the example of US traditional retail, which grew by 4% in 2016 compared to Amazon, which grew by 40%.
Whilst businesses realise that understanding changing needs and delivering better value to their customers is critical for survival, what is less clear is how to align the focus on customer with digital technology. This in many ways (in our view) is the hard bit. To help guide to some answers, we believe there are three fundamental technological enablers that must be addressed to avoid failure:
Defining effective customer data governance before implementing analytical solutionsEmbedding the ‘customer focus’ into the organisation’s ecosystem Enabling agility through a technology platformLet’s look at each one in more detail.
Define effective data governance before turning customer data into valueIn today’s age of big data where every sensor, touch point, interaction and transaction generate a footprint, customer data has become a critical source of competitive advantage. Organisations today have access to technology that interprets customer data and enables businesses to offer better services that engage and delight their customers.
The challenge is that most traditional organisations have organically grown their technology estate over time. Data has been recorded in multiple ways, making seamless capture of data and generation of insights about customers difficult. Organisations responded by developing data warehouses and service-oriented architectures, deploying solutions from vendors like IBM and Oracle. These vendors use AI to perform index matching, implement big data lakes, and bring in visualisation tools. However without data governance, tools became just new layers in technology stacks, and data lakes turned into data ‘swamps’ with an unclear strategy of what the data is being used for at a great financial cost to the business1.
Before deploying technology to unlock the power of the customer data, organisations need comprehensive data governance and data management from capture to customer value. They must harness data seamlessly across their business, their partners and customers. This includes:
- Developing a data roadmap of all the key components of the business such as customers, sales channels, products and suppliers. Each of these components should reflect the digital journey of any customer and should be classified to enable a unified data model.
- Defining data governance structures to oversee new data capture with an emphasis on triaging and verifying the quality of data as it comes in. Simply feeding historic data sets to an algorithm may lead to incomprehensible results because of the data bias in the recorded information. For example, historical online sales data may be based on behaviours of younger customers that were more active online, rather than their parents.
- Leveraging advanced and emerging data solutions (including machine learning). These should exist on any organisation’s roadmap and will be a key differentiator in engaging the digital customer. The power this will deliver in the future is incalculable. For example, machine learning solutions will have the power to identify when each customer is most likely to purchase a product due to external factors such as weather, political events or even relationships with other customers.
- Not being over prescriptive in what data is captured. Machine learning can deliver insight by triangulating multiple data sources and identifying patterns of customer behaviour to drive growth.
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