Some savvy organisations have overhauled their entire businesses by listening and responding to customer’s wants and needs through the collection and analysis of real-time customer sales data.
The problem with this is that some people regard it as a little too close to Big Brother type behaviour for comfort. But to dunnhumby and the companies we work with including Tesco, Casino, Kroger and Macy’s, we like to think of it as ’personalisation’ that leads to a win-win for both shoppers and businesses.
It’s all about listening to the customer
Through customer sales data these companies have become more relevant to their shoppers and helped give them exactly what they want. It means more tailored products, services and advertising for customers. It means more rewards – being given out and shoppers being thanked by companies for sharing their data.
It also means less wasted advertising and less wasted direct mail. And it means more customer focus – with companies putting customers at the heart of their strategy. We’ve found that if customer data is used to listen and then continually improve and personalise the service to the customer then they are more than happy with the arrangement of data sharing.
We reckon this is far removed from any type of Big Brother activity. Thankfully, most customers agree because they’ve shown they don’t mind exchanging the necessary information, providing they get something in return.
Sharing data is the future
At dunnhumby we believe adopting a customer-centric approach with transaction data and analysis at the centre of a business is the only sustainable valid strategy for the future. And we’ve been able to convince some extremely big companies that taking this stance is the best way to proceed.
The likes of Tesco, Kroger and Casino are all converts and have been able to subsequently help their suppliers such as Procter and Gamble, Coca-Cola and L’Oréal to also use the customer data to garner insights on the performance of their own brands.
They’ve benefited massively because such is the speed at which the shopping data can be analysed that brands can swiftly change their marketing strategies if repeat purchases of new products are looking shaky, for example. By lessening the chance of a failure and optimising sales, crucially this also ensures that customers are getting the products and services they really want.
From acorns of personal information grow oaks of shopper insight
Also helping counter the Big Brother accusation is the fact these major brand owners are not able to see individual customer information. They are only able to view trends by customer-type. The transactional data and personal details of each shopper remain with the retailers.
Adding yet further to the Big Brother defence is the dunnhumby ’Rolling Ball’ algorithm discussed in the previous column. This involves the creation of a unique DNA profile for each shopper based on the correlations and classifications of products in their shopping basket. But behind all this the basic customer information is remarkably unobtrusive – it’s simply a list of products they’ve bought. It’s hardly Big Brother.
Mutual benefit of sharing
Although the spectre of privacy concerns looms above predictions of what customer data might look like in the future, it’s very much a two-sided story. Of course, it’s good news for companies – it means they can take the guesswork out of marketing and start offering customers what they really want – but as highlighted above it also has massive benefits for customers,
One specific marketing benefit is the eradication of irrelevant direct mail. While the industry average for opened direct mail is a shockingly low 1%, as many as 98.4% of Tesco vouchers that are sent out with its quarterly statement are redeemed by customers. This success is down to the relevance of the offer and this relevance can only be derived from knowing the customer intimately through transaction data.
Relevance is key to targeted marketing
This relevance means cat owners will not be sent promotions about dog food, vegetarians will not be sent coupons for steak, and teetotalers will not be sent price reductions on wine. For this reason, Tesco customers don’t regard their Clubcard statement as junk mail. Quite the opposite in fact, it’s something they’ve signed up for and want to receive.
We believe if customers cannot see the benefit from their behavioural data being analysed, then they will choose not to allow it to be used – and we agree with them. The onus therefore is on all of us to ensure companies forge a responsible contract with their customers, a contract that says ’thank you’ and gives them something in return for their data.
Data must be respected by all
At dunnhumby we take our role as a customer data pioneer very seriously. By analysing shopping behaviour we are able to help retailers and brand manufacturers provide a more satisfying shopping trip, more relevant communications, better offers and welcome rewards to millions of customers around the world.
Companies like Tesco, Kroger and Casino also understand the importance of forming an honourable contract with their customers. Like dunnhumby, they are also customer data pioneers who appreciate that they must offer something in return to say ’thank you’ to their customers for sharing their personal information.
In the future, as more data sharing takes place, this issue of mutual benefit will become a sticking point because consumers will not be prepared to share their valuable data with companies they do not trust and who do not give them something back in return. And why should they?