The 2019 Mood of Marketing report shows an industry in flux. Growth in revenue, acquisition and EBITDA is getting scarce, highlighted by less than 30% of our companies reporting growth.
Finding growth in today's world
Savvy organisations are still finding that growth, leading the way and ring-fencing value for themselves. As the customer assumes a lead role in many organisations, a number of shifts are occurring. Businesses are moving from short term acquisition, instead embracing a longer view of success. Brand equity and loyalty are moving to the fore, balancing a focus on top and bottom lines. And the ways organisations define success are also shifting, with engagement, NPS and reduced churn accelerating in importance.
Underpinning these shifts is our old friend data. Successful organisations tend to be data driven. They rely on data to show them the way, and are often best in class with analytics and modelling. By focusing on data early, these organisations are ahead of the pack, cementing their advantages and taking a larger slice of success.
The changing value of data
I’d like to focus here on another fundamental shift - the way organisations use data itself is changing. No longer the trigger for short term functional acquisition offers, organisations are now working their data a little harder. They are using it to gain a deeper understanding of customer, in turn giving them permission to build richer, more personalised customer experiences. And these experiences are usually based on a data-driven understanding of individual customer pain points, targeted to smaller segments and often designed to retain a customer through building loyalty.
This shift is marked. An overwhelming number of respondents this year told us that personalising customer experiences was the trend to watch in the next two to three years. Not that this will be easy, as 51% also told us they expected personalised experiences would be their biggest challenge, given their business’ current state of readiness.
Changing your organisation's view of data
So what does the journey from a product to a customer-centric mindset look like? What are the steps you need to go through along the way, and most importantly, where are the watch outs? To get a deeper view of this process we went back to one of our respondents, a marketing leader in the finance sector.
Three years ago their organisation committed to change their data use. Three years on that decision is providing significant value. We started by asking ASB GM Marketing, Shane Evans, to describe ASB’s approach to data three years ago. “We had a wealth of first party data but we weren’t using it effectively. And we weren’t using the data we had to deliver what our customers really wanted,” says Evans.
Building effective foundations
The first step meant foundational work on their data foundations. “When we first started we had to spend a lot of time organising the data, and building capability in our enterprise data warehouse to help us manage it all,” says Evans.
“The real difference came when we added a marketing decision engine over the top. Suddenly we could see opportunities in the data - for each individual customer - and we could deliver timely, relevant and personalised interactions to drive better customer outcomes,” says Evans.
The next step was building a more nuanced understanding of customer. This unleashed latent potential in the base, and revolutionised the communications approach.
Although building the capability to get the most from the data was a challenge, Evans says this process has exposed more of the company to data-first-thinking and encouraged them to think about how to use the available data to drive better outcomes. He says getting that understanding of customer changed the game.
“Our focus is on driving those better customer outcomes. We have over 500 conversations in our library that can be triggered by customer’s behaviours on a daily basis. We don’t talk about product offers so much; it’s more about what is the right action a customer can take to ensure they are financially better off. One of our most popular conversations is ensuring customers are in the right interest bearing account”
The value of better customer outcomes
The ROI is significant. By providing relevant and data-driven experiences to their customers, open rates sit around 50%. Letter drops are no longer used except in rare cases, and the feedback loop from customers interacting "with the experiences presented to them is building a true virtuous circle - the better the data, the better the experience, the happier the customer.
“The trick is not to spam. Don’t ‘sell’ anything except valuable conversations to your customers. People are time-poor so messages should only be useful or important, or targeted to what the customer needs. With people visiting branches less and less, we see this as an opportunity to still have these conversations by using carefully chosen data driven experiences, delivered digitally,” says Evans.
The other change was a shift in KPIs. “We don’t measure success through revenue so much. We are far more focused on engagement. We are confident if we get that right, the revenue will follow.”
Shifting an organisation’s view of data’s value is not an easy task. It requires alignment between multiple functions, and an understanding that brand and a longer view can deliver the revenue. Customer experience is now being driven by data, placing customers at the heart of New Zealand’s most successful organisations.