CREATING CUSTOMER INSIGHT

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CREATING CUSTOMER INSIGHT SALLY CAREY DATAMINE LTD

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CREATING CUSTOMER INSIGHT

Organisations have discovered that the merging of their market research department with their database marketing team has not necessarily led to a stream of insights that revolutionise their business.

This paper introduces what is meant by customer insight and the building blocks involved with creating insight. Common issues that get in the way are outlined together with a framework for insight. The skills required to create an effective insights team and some of the commonly used techniques for uncovering insight are introduced. These techniques are covered in more detail in separate documents.

INTRODUCTION

There is plenty of discussion within organisations about customer insight, and a lot of questions are being raised. Where is the customer insight? We have lots of data, but no insight. What is the return on our insights team?

Organisations have discovered that just merging their market research department with their database marketing team hasn’t led to a stream of insights that revolutionise their business. Filling the role that arose from merging these departments, the Customer Insight Manager is now faced with a huge task. It seems that they are expected to possess an amazing array of skills in addition to a direct line to their customers’ minds!

Let’s start with what a business is trying to achieve with customer insight, and what having customer insight really means. An organisation wants to understand their customers: customer needs, customer behaviour, and customer frustrations that all come from dealing with the organisation.

The identification of customer insight should not be a small, tactical initiative undertaken by a team of people working in isolation from the business. Organisations need to focus on marketing effectiveness, by eliminating wasted spend and aligning marketing investment with the organisation’s main priorities. This requires the right amount of analytical effort to be put into tracking the effectiveness of the organisation’s large investments.

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2 CUSTOMER INSIGHT DEFINED

Customer insight means having knowledge about customers and markets that helps structure thinking and decision making. It’s about having the whole picture, visible to the whole organisation, from executive to customer service.

Creating customer insight is another step in the evolution of organisations. After all, many changes have gone before. For example; merging departments managing individual channels, such as call centre and e-channel, into the delivery channel’s department, moving from product marketing to customer marketing and sharing accountability for brand, not just the brand manager and advertising agency, etc. All of these have led to organisational change, so does the implementation of customer insight. The need to break down functional barriers, for example between marketing and customer service, continues. Marketing needs strong influence over the customer touch points such as branches, website and call centres.

From a reasonably simple statement - the desire to understand customers - unfolds the complexity. Complexity arises from the need for cross functional (IT, marketing, customer insight, product, operations, service) department co-operation, getting departments clearly aligned with organisational goals and investment in people, technology, systems and processes.

THE SOURCE OF INSIGHT

Customer insight comes from combining data from a number of sources. It is about using all data sources and applying the correct weight to them.

Insight comes from compiling and combining evidence, from data, to paint a picture. Merging the market research and database marketing teams is a step in the right direction, but it’s only part of what is required to create insight.

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3 ISSUES THAT OBSTRUCT INSIGHT

There are many issues that can get in the way of creating insight. These include: • Unclear business vision and strategy

• Analysts doing reporting • Analysts running campaigns

• Insights team detached from the business • A chasm between the business and the geeks • Poor briefing

• The analyst went off to do it, and didn’t come back… • No SCV

• Inaccessible data

• Lack of resource (people with time) • Poor communication

• No interpretation of analysis

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4 The remainder of this paper, and reference to other papers, cover how to address most of these

obstacles.

THE REQUIRED SKILLS

We will start with considering the skills required by the leader of customer insight, the Head of Customer Insight, the Customer Insight Manager or GM Customer Experience. Above all else, they need the ability to collaborate (with internal departments and business partners), and the drive to seek out evidence in support of customer management decisions. The Head of Customer Insight needs to be collaborative by nature, able to see the big picture and driven by making evidence based decisions.

The customer insights team comprises the following roles: database designer, modelers, data analysts, campaign analysts, reporting analysts, systems support, market researchers, database marketing manager, CRM manager, direct marketing specialists and translators – business to technical and back!

In particular, the data analysts and modelers need to be curious, pragmatic, clever, nimble, and to have a ‘can do’ attitude. The translators need to work closely with marketing, operations and service and form the bridge between the technical and business worlds.

INSIGHT FRAMEWORK

Assuming that you are on the path to insight and have an insight team in place, the following questions provide a simple framework for insight.

 What is the aim of this organisation?  What is the organisation’s strategy?

 What do we already know (not think we know)?  What do we need to know?

 Where are the knowledge gaps?  What data do we need to collect?  Are we adhering to privacy laws?

 How are we going to prioritise what is needed?

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5 The following diagram provides many of the questions, which, when answered, provide insight.

TOOLS AND TECHNIQUES FOR UNCOVERING INSIGHT

Based on the assumption that you have a single customer view there are a number of tools required by the technical team for creating insight. These are a database platform, SQL, excel, a statistical package e.g., R, SPSS, SAS Enterprise miner, and visualisation tools including mapping e.g., MapInfo, Maptitude.

Technology has provided people with easy access to more information - purchasing at the click of a button. Given the need to respond to market changes, information is needed quickly in order to react appropriately.

Some common analytics processes for uncovering insight include the following:  Customer acquisition analysis

 Knowledge discovery

 Customer profiling and mapping  Customer retention and churn profiling  Segmentation

 Loyalty program evaluation

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6 SUMMARY

Customer insight is not employing an analyst, or even a team of analysts. It requires organisational commitment to change. If it was easy, every organisation would have customer insight sorted.

The building blocks of insight are:

 Clearly defined company aim and objectives  Customer driven marketing

 Organised and accessible data  The right people in the insight team  Knowledge management

Key to achieving insight is to work co-operatively, to have a clear data strategy and align what you are looking for with the organisation’s needs.

BRIEF AUTHOR BIOGRAPHY

Sally Carey

Sally is Director of Datamine Ltd, a New Zealand based analytics consultancy that moves its clients beyond guesswork. Sally has over 25 years of B to B and B to C marketing and using quantitative approaches for business decision making. Sally has an MBA from Bradford University (UK) and is a Fellow of the Institute of Direct & Digital Marketing (UK).

Sally believes that extraordinary results are achieved by a combination of analysis and intuition, and have even been referred to by some clients as magic.

Key words: insight, data strategy, understanding, analytics, planning, acquisition, retention, data mining, analyst, profiling