The ability to analyze customer data and turn that insight into highly relevant customer communications provides a powerful platform that helps brands prepare for the digital future. Since everything marketers understand about customer loyalty is changing, nowhere is that change more profoundly felt than in the collection and use of customer data for marketing.
Hal Varian, Google Chief Economist and Economics Professor at UC Berkeley, believes the new “coin” of today is consumer data. In today’s globalized, fragmented economy, winners increasingly will be separated from losers by their ability to collect, analyze and derive actionable insight from consumer data. Varian has coined a term for those companies who have an edge in customer data insight: the Datarati.
The challenge for these companies lies in making effective use of the data they’ve collected.
Following are 4 key considerations for effective data collection:
- If you don’t use your data, others will. If you don’t collect and use proprietary customer data, other companies, including your competitors, will collect and use data on your own customers.
- Remaining on the sidelines is no longer an option. Every consumer-facing company in every industry must develop, execute and evolve a data-based customer loyalty strategy in order to maintain control of and build value into their customer relationships.
- Recognize interactions as much as transactions. Increasingly it has become important to track and measure customer interactions across every digital channel and communication platform and use those interactions to extend the loyalty cycle. The data we leave on the “cutting room floor” now can be potentially more valuable than the data we do collect. Understanding transactional data is, in many cases, now the “floor” of your customer strategy rather than the ceiling. As our ability to track behavior grows, it is likely that marketers will reward many seemingly mundane customer activities, in addition to the purchase itself.
- Marketers around the globe are engaged in an arms race to ‘connect the dots’ between these varying data touch points. All of us have pieces of the consumer puzzle, and loyalty marketers typically have more of those pieces than most. But the winners will be those marketers who can successfully unite disparate sources of data in order to paint a complete picture of the customer relationship.
A new loyalty hierarchy will emerge, led by the Datarati, and based on the ability to connect those digital dots in service of customer relationships. It’s our view at Aimia that the time to begin connecting those dots is now. Arguably the best way to join the ranks of the Datarati is to adopt at all times the perspective of your customers. Rather than starting with the technology and trying to force fit it into customers’ lives, start by understanding their needs then work backwards. Tomorrow’s winners will be those who reconcile these new data sources with the complexities of consumer life to deliver customer loyalty strategies to the mutual benefit of both companies and their customers.
Rick Ferguson, Vice President, Knowledge Development, Aimia, has overall responsibility for the development and dissemination of loyalty-marketing thought leadership, research and best practices for a global audience of loyalty marketers. Ferguson has published numerous articles and white papers describing the characteristics of marketing programs which seek to change customer behavior. He has consulted for Fortune 500 clients including American Express, Proctor and Gamble, and Visa, Inc.