The fact that High Street retailers are struggling in the current economic climate won’t be particularly shocking to many, nor will the news that many companies are seriously thinking about boosting their database marketing, with big data remaining a key talking point in the boardroom. It’s great to see people so enthused about big data, but are enough sectors really using it to full advantage?
Is the data available on consumers being properly collected and used to improve relationships with customers - ultimately boosting sales while maintaining loyalty? It would be a huge waste if the answer was no, but surprisingly our latest piece of research seems to indicate that too many marketers have failed to grasp the importance of big data.
Gathering the information and using the proper technology to analyse and use it effectively isn’t completely straightforward, but when done properly the rewards are more than worthwhile. Take supermarkets, for example. The loyalty schemes that some of the key players offer enable them to gather a huge amount of data on customer behaviour while providing a platform for communicating with them and sending offers that maintain customer loyalty and encourage higher and more frequent spending.
This isn’t easy for all sectors, however, as our recent study has shown. The 2013 Customer Intimacy Index asked 1,000-plus respondents to rate “your supermarket”, “your bank” and 14 other types of businesses - with the scores representing levels of familiarity ranging from “knows me like a close friend” to “treats me like a total stranger”.
Unsurprisingly, supermarkets came out on top, while banks were second and mobile service providers third. It’s these sectors that have the most interactions with their customers with weekly food shops, regular bank transactions and service usage providing a picture of the individual consumer’s activity and preferences. Once the data has been gathered, it can then be used for more targeted and effective marketing.
It’s the companies that ranked at the bottom of the table that need to look at the Index a bit more closely. Alcoholic drinks came last, followed by car manufacturers, computer/tablet manufacturers and home furnishings/DIY. The poor result is easy to explain: these are the companies where purchases are more likely to be big, one-off buys, meaning these retailers have less opportunity to collect customer data and glean much on their buying habits. Similarly, the direct contact that certain alcoholic drinks brands have with customers is often through third parties such as supermarkets, making it difficult for them to build strong customer bonds.
All is not lost for the companies holding up the bottom end of the table, however. These sectors would be foolish not to learn some valuable lessons from the results of the Index. Firstly, customers are far more likely to become regular and loyal ones when they feel a company truly knows them, and a customer loyalty scheme is an indispensable tool when it comes to tracking buying habits.
In the big data era, companies are almost spoilt from the amount of information at their disposal, but it is up to individual companies to put the measures in place to properly collect and analyse it. Companies in the lower scoring sectors have an excellent opportunity to gain an advantage on their competitors if they take heed and recognise the usefulness of properly collecting and analysing big data.
Any company which does not believe that the precise targeting, tailoring and personalisation made possible by proper analysis of big data are necessary in today’s business environment is destined to struggle as more savvy competitors utilise all of the tools and information available to them. The consumer landscape is constantly changing thanks to the increased amount of technology available to glean customer data, so companies need to make sure they have the proper strategies in place to employ this effectively. In addition to helping retailers hold on to the loyal customers they already have and create a bond that encourages them to spend more, this can also attract new customers.