Were you surprised to read the title of this post? Do you believe that using technology to understand customers is the only way today? Then let me explain why I believe it’s not quite that simple.
In today’s data-rich environment I’m not really suggesting that you actually ignore data nor technology! However, in working with clients around the world as well as in numerous industries, I have found that many are lost by the wealth of information that is available to them.
In fact it seems to drown out their reasoning of what to do with all the data and they remain frozen in indecision. Or worse, they invest in the latest platforms and systems in the hope that using technology to understand customers will help them with their knowledge void. Is this your case? If so, then just follow the steps I detail below and you will soon be doubling, quadrupling, if not getting 10x the ROI from your data.
The Current Situation with Data
Data is everywhere and most organisations are drowning in it! Technology is being blamed for disrupting businesses, but in most cases these companies have simply not adapted to this new data-rich world.If you're drowning in data, perhaps you have still not adapted to today's data-rich world. #BigData #Analysis #Customer #CustomerUnderstanding Click To Tweet
I admit, a lot has changed. Consumers are adapting their behaviours to the trading of their personal information. Companies are changing business models as their value shifts from products to services, or even to the sale of the information they gather.
Some organisations are reinventing themselves to take advantage of these changes. Others are ignoring them – at their peril – since they are at risk of becoming the next Kodak, Borders or Blockbusters. And of course the latest covid-19 epidemic will hasten many others to unfortunately follow suit in the coming months.
If you’re interested in reading an analysis of the US Retail Apocalypse and the 23 big retailers closing stores then I highly recommend this post on Fox Business from last year. No doubt it will need updating in 2021 when the fallout from the current pandemic becomes clearer.
So what should you do? Well, I believe that you should start by renovating your business model to take advantage of the countless new opportunities all the data and new technologies open up for you. And in my opinion, you had better do it sooner rather than later, because your competition will almost certainly be investigating ways to make use of it all!
Yes you have data and information, but if you’re a regular reader of my blog, you will know that you have to turn these into knowledge to understand your customers. And then develop insights and actions. But this can only be done by asking the right questions of your data and information. The latest technology is not going to make up for your lack of thinking!
If you are struggling to take needed action despite a wealth of information, then this is certainly where you should start making changes – fast!
A 2015 Capgemini and EMC study called “Big & Fast Data: The rise of Insight-Driven Business” showed that:
- 56% of the 1,000 senior decision makers surveyed claim that their investment in big data over the next three years will exceed past investment in information management.
- 65% admit they risk becoming irrelevant and uncompetitive if they do not leverage data. This is especially true given that non-traditional providers, like startups thriving on big data processing, are moving into their industries.
- Although companies realize they desperately need to dig into data analytics to maintain their business position, 45% surveyed think their current internal IT development cycles are not sufficient for new analytics and don’t fulfill their business requirements.
- Making matters worse, over half (52%) of those surveyed see the speed of their organization’s insight generation from data analytics as constrained by its existing IT infrastructure.
So what has happened in the past couple of years? Not a lot in terms of usage, but a lot in terms of data gathering; just check out the graph below from Kleiner Perkins for current and estimated growth of data volume. It is expected to more than triple over the coming five years.
Of course big data has been big news for years, thanks to its 5Vs (volume, velocity, variety, variability, value). These were the driving forces behind the need and finally the upgrades in computing power that made it possible to adopt a new and significantly faster way of analysing it all.
This article by Olivia Ryan sums up the “6 ways big data expansion can significantly damage our privacy.” These are the same major points that the GDPR hoped to address.
The EU’s GDPR (General Data Protection Regulation), with its stricter rules that came into force last year, focuses on many of the data privacy issues that have people the most concerned. It is definitely worth checking out the details here if you have still not made the necessary changes within your own organisation.
Interestingly, there is no equivalent federal law in the US (for now), but that doesn’t mean you can ignore it if your business is based there. Find out more in this other excellent article on Forbes.
It’s true that companies do recognise all the threats detailed in the earlier mentioned study, and while startups flourish in every industry, the mastodons of commerce are generally much slower to change, hence the need for GDPR. (see below for an alternative approach to individualised data utilisation)
An Alternative Approach
Data comes into its own when used for personalised engagements. However, there is an alternative or complementary approach that some organisations are now using. This is to address global issues such as resource management, water usage or pollution, which certain customers feel passionately about.
Coming back to the title of this post, as you can see there is a lot to consider before using technology to analyse all the data you have. And probably it’s a lot more than you even know about at present, at least from my experience!
You can’t go wrong if you start with the customer and identify what you need to know and understand about them, in order to go beyond their expectations.You can't go wrong if you start with the customer & identify what you need to know & understand about them. #CEX #CRM #Customer Click To Tweet
Make a list of all the things you want to know and then see if you have the information to answer them. In many cases you do, it just hasn’t been analysed in a way that makes the solution obvious. That’s when you should review and eventually update your platform and systems, not before.
Doing this any earlier will be like buying a fancy new hammer to crack a nut! What you need to understand is the best way to crack the nut; often times your current hammer is fine for cracking if you use it correctly.
If you’re drowning in data and thirsting for actionable insights, then we should talk. Click the button below and I’ll give you some ideas on how to crack your own nut!
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This post was first published in March 2018 and has been updated regularly to reflect the latest ideas, research and opinions.