Finding the perfect view

As the holy grail of data-driven marketing the single customer view is not easy to achieve, but with many brands having now invested in building one, are they seeing any returns?

The notion of the ‘single customer view’ has been held for more than a decade as the holy grail of data-driven marketing. But according to many marketers, the reality of operating such a database or ‘view’ involves huge and ongoing effort, and is by no means a silver bullet to success.

Speaking at the British Retail Consortium’s Customer Insight conference last month, Caroline Pollard, customer strategy and insight analyst at Debenhams, admitted that although the retailer invested in a “massive” single customer view database a year ago, it is taking “baby steps” with it.

“The problem with this kind of thing is that you tend to generalise,” she said. “You say, ‘this is the customer’, but actually there are 10 different versions of each customer.”

She pointed out that even with a single customer view, it is not always easy to label people nor, of course, predict human behaviour. “With our single customer view database, there are people in the business who expect it to answer every customer query. We have to rein in those expectations,” she added.

From analytical to operational

Speaking at the same conference, B&Q’s director of finance and customer insight Mike Coshott identified that one of the key prerequisites of truly benefitting from a single customer view is moving from an ‘analytical’ to an ‘operational’ mindset, where insights from data translate into real actions. There is also the difficulty of achieving a single customer view in the first place.

Martin Hayward, vice-president of global digital strategy at Aimia, which owns the Nectar loyalty scheme, believes that marketers are “slowly getting there” but that while the technology exists to simplify the task of achieving or maintaining a single customer view, he is seeing little in the way of “sensible or creative use of data”.

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Bathrooms.com has achieved brand differentiation by using a single customer view

He says: “Having this many marketing channels is new, so making sense of it all can be a challenge.” Hayward points out that operating a loyalty card is one way to ‘crack’ the challenge, by giving marketers a means of identifying the customer across platforms.

Big data or small data

DIY retailer Homebase operates the Nectar loyalty scheme and won a Marketing Week Data Strategy award earlier this year in recognition of its effective use of personalisation. Richard Lewis, director of analytics at agency Model Citizens, which has been working with the retailer together with direct and digital agency MRM Meteorite, says that the approach taken was to use ‘granular’ data around items that had been bought previously. People talk about ‘big data’, but often the answers lie in staying in the detailed, or ‘small data’, says Lewis.

Inferences could be made as to the kind of DIY project shoppers were doing from the items placed in a basket, and then subsequent communications targeted appropriately. If a customer bought a kitchen, the cover of a subsequent mailing might display the kitchen and include associated products. Simon Langthorne, Homebase’s customer loyalty manager claims that this customer-led approach has had ”incredible” results.

Peter Markey, chief marketing officer at RSA Insurance Group, agrees that the approach of focusing on ‘next best action’ is a useful way to respond to big data. “Believing in the holy grail doesn’t work,” he says, adding that RSA’s UK business More Than has taken a case-by-case approach, built around segmentation, value-scoring and propensity modelling and which he says has led to improvements in cross-sell and up-sell activities.

“It’s not just a volume game, based on a policy renewal date,” he says. “There is a need to be more segmented and relevant.” 

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Loyalty scheme Nectar (above) which is used by retailers including Homebase (below) hopes to see more creative use of data

Unifying databases

Caravan park operator Haven, which is part of the Bourne Leisure group, also claims to have seen increased marketing effectiveness with a more data- driven approach to marketing. Database manager Kat Miller says that prior to implementing a system from software supplier SAS, the marketing team had to grapple with disparate databases.

It is using a centralised database that enables, for instance, targeted communications to caravan owners about part-exchange models that reflect their brand preferences. Miller also refers to a successful campaign to drive sales of caravans that led to more than £1m in revenue, which would not have been achieved before the single database was operational. “It has saved money on marketing spend but also led to a more personalised service,” she adds.

Haven is now looking to bring in data from sister brand Warner Leisure Hotels. “We are hoping to achieve some synergies,” says Miller.

Head of industry and solutions marketing at SAS Charles Randall says that much of Haven’s success with its data-driven marketing efforts lies in a refusal to over-complicate, and a focus on identifying solutions to specific business problems.

Targeted marketing

But for many organisations, the cost of creating and maintaining a single customer view remains difficult to justify.

Marketing consultant Simon Lilley, a former marketing director at airline Flybe, says that although marketers have pushed their database management into a “far better place” than it has been in before, taking it to the next operational level with a “living and breathing” single customer view is “a new ball game – quite often with serious capital investment that frighten directors”. He believes that for most, the “halfway house” of bulk segmentation is the chosen path.

Homebase-image-store-2014-460

That is certainly the case for Richie Jones, sales and marketing director of holiday parks owner Park Resorts. “You have to link the development of a single customer view to the number of years it takes to get a return, and you may be in a business where you can’t wait for a three-year payback,” he says.

But he points to alternatives, which he describes as “lesser versions” of a bona fide single customer view, and which he says can lead to a good return on investment. “Simple analytics, control group and format testing can work quite well. A single customer view is the utopia but often it is about segments rather than an entirely individual view,” he says, claiming that Park Resorts has seen a “big uplift” following efforts to increase personalisation of direct mail and email.

Jones’ team is also working on the development of an app, due to launch next month, which will serve relevant information based on a customer’s holiday booking number. He believes the app will unfurl numerous marketing opportunities, build loyalty and improve the holiday experience.

Segmentation

Businesses that are lucky enough to have a lot of rich transactional data might do well to learn from those that have very little. David Boyle, executive vice-president of insight at BBC Worldwide, has held senior insight roles at record label EMI and publisher HarperCollins. He says that it is possible to build a three-dimensional view of customers through research and the resulting creation, and ongoing fine-tuning, of segments.

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“You need to focus on how you can use the data, what you need and how you get it. If you ask these big strategic questions, then you can lean on research to get the answers,” he says.

A brand’s database can be an all-singing, all-dancing, true feat of modern day marketing engineering, but that is no substitute for a product that resonates with its audience and is being packaged and delivered in the right way, and at the right price.

Matt Button, head of customer relationship management at The Folio Society, warns: “Marketing and CRM only take you so far. It is also about the experience, the pricing. There is always a need to address fundamental issues such as who is buying the product and can it compete with its competitors.”

That said, Button is a believer in the power of data and its ability, in particular, to enable marketers to automate previously labour-intensive efforts, and to free up creativity. “That is the beauty of it,” he says. “Your marketing can take off, and it becomes about reacting to what your customers are doing.”

Q&A

Ian Monk
Founder and chief executive Bathrooms.com

Marketing Week (MW): Is achieving a single customer view important for your business? 

Ian Monk (IM): It is very important. It has helped us to achieve some differentiation. But one of the key challenges is in identifying that customer in the first place. They use different laptops, different channels. I have seen nothing in the market that answers that challenge.

MW: How do you manage the sheer volume of data that is available?

IM: We have had experiences where we brought people in and they have got lost in the data. You do not need to go into the data every day, but you do need to monitor shifts or patterns. You can definitely have too much of it. Data is about looking at how to use it operationally in order to provide a better service.

MW: What would you say is the key barrier to achieving a single customer view?

IM: By its nature a single customer view transcends all departments. Buy-in from the top is needed. Setting up the required internal processes is the key challenge. We have separated those who collect the data from those who interpret it. One works in IT and the other is typically in the marketing team.

MW: Have you implemented any new technology to help you optimise your data-driven marketing?

IM: We have been using Aptus on the website for the past six months, which identifies groups and tailors what appears according to their likely preferences. It might display a shower over a bath for a family, for instance, or a walk-in enclosure to a city-dweller. It has not been too expensive, you can negotiate. Often it gives the supplier a marketing case study.

MW: Do larger organisations with more data have an advantage over smaller companies?

IM: If you are like Amazon and have a user visiting your site frequently, you can build up a very detailed picture. But for most retailers users visit their website only once or twice a month, so it can help to put them into groups or ‘pots’. For us, there is the family, the DIY person, the city type. They all have different wants and needs. I think this kind of approach is key to differentiation and a growth area for the future.

MW: What is your advice to other marketers?

IM: It is easy to be overwhelmed. Take small steps. We use voice over IP [voice over internet protocol or VoIP] for our calls, which means we get a lot of data. When a customer first places an order, we pull everything together and also spend a lot on pay-per-click. Being able to see customer journeys, what they looked for, is important to understand the overall journey.

Case study: EeBria

EeBria, an online marketplace for UK craft alcohol producers, launched last August. Founder David Jackson says that it has received £90,000 from crowd-funding, which will be used to drive its marketing, including improvements to its website.

“Everything we have built is bespoke,” he says. “All the data is new. We do clickstream monitoring: tracking how a customer gets to us, which keywords lead to our site and how that translates into repeat purchases.”

Analysis of the data has led to important discoveries. For example, generic key words such as ‘buy beer’ lead to more of a ‘discovery approach’ on the site, versus more educated buyers, who may be driven by price.

Jackson was the online marketing director at ticket marketplace Viagogo, and says his experience gave him the confidence to launch EeBria. At present, the data analysis is done in-house. “We like to control how things will interact with our database and what we can pull in,” he explains.

He adds that it is a priority to automate as many tasks as possible. This approach also boosts marketing efficiency for craft producers and helps to keep cost down, enabling them to compete with larger rivals. 

Sponsored viewpoint

Jim Kelly
Product strategy director
Blue Sheep

Many people believe they have a single customer view because someone in the organisation has told them that, but when they use it, they find out it is inaccurate or not comprehensive. That means many businesses do not know answers to important marketing questions such as how many customers they have, or the average order value.

But a single customer view should always be the underpinning facet of everything brands do with data-driven marketing. They need it for knowledge, measurability and compliance. Not having one is like having no foundations under your house.

Many organisations consider building a database as an IT function, but customers are human beings. The data might be geared towards accuracy or frequency of updates or compliance but it is important to remember that a single customer view is about customers’ perception of your products – how businesses engage people. They need to know what a brand is doing and why.

There is no point in building a single customer view once a year as it will be quickly out-of-date. It has to update frequently and be self-monitoring.

Being able to incorporate data from social channels is the utopia. The difficulty is that social platforms are about unstructured information, and mainly they are about sentiment.

If you put a single customer view in a big data platform, have you thought of the implications? Some businesses are doing it because they think it is cool, rather than having a business reason. Social is about engagement and strategic marketing rather than a personal marketing relationship. Social media is above-the-line advertising at the moment and often people have different accounts to portray different identities, which is not about the customer, but having a voice.

Marketers have to approach the problem as though they are the customer, and first and foremost think about what they want to achieve. There is no point having a daily update if you have a one-month sales cycle and there is no point having a six-month update if users are on your site daily. Do not aim for real-time unless you need to and do not aim too high. A single customer view is a living, breathing thing that needs care and attention. Do not try to do too much.

Brands have to build trust in their database and see it as a marketing asset and not an IT asset. There is a saying: ‘there’s only one thing better than a 10 per cent increase in response rate and that’s knowing how you did it’. A single customer view is like a memory bank of what works and what doesn’t. And if you think about all your close relationships, they are based on these shared memories and shared ‘journeys’.

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