With data earning it's voice in the boardroom, it is now having to prove its value. David Reed reports on a roundtable, hosted by Tree London, at which data practitioners from leading end-user organisations discussed what their newly-found status really means.
DataIQ: For the last five years, data has been on a rise - attracting investment, recognition as an asset and as a potential driver of performance in a counter-cyclical way. Right now, it is coming under pressure to report and deliver in the way other functions do. What are your experiences of the status of data within your organisations and what it is now being asked to do?
Max Kelly: Virgin is quite a “gut feel” organisation - my history was asking, “why are we starting up the companies which we are starting?” I got excited about data, because if you can understand customers’ needs, it is easier to compete. I had to pitch that in 2007 to say, bring together all the data across the Virgin group and do something with it. Data was seen as a grubby area, but it got exciting.
We started by doing cross-selling. I did a straw poll of the business owners in the group asking how many customers they thought had multiple products - they thought between a quarter and half. Turns out it was actually just 10 per cent, or a quarter of the customers of any given company. We saw that number triple.
Ultimately, the data for tracking that was under the control of each company - only the analytics was centralised - and they started saying, “those cross-sales would have happened anyway.” There were huge steps forward as each company hired analysts and we started doing much more clever stuff, but we didn’t track that back to value.
Sanjeevan Bala: At Channel4, the catalyst was looking forward, seeing convergence of devices and content and how we would play in that environment. Our new CEO, David Abraham, started talking about how we should put data at the heart. That created a top-down change momentum.
We don’t have a direct relationship with our viewers. So how do we justify capturing their data and how do we then leverage that data commercially? We created the insight team separately from marketing, built a single customer view and saw the opportunity to understand viewers and build a relationship with them.
We are also a not-for-profit organisation with a public service remit, so we do grapple with balancing those two things. How can we justify capturing postcode from viewers? It does allow us to monetise better, so commercially it makes sense, but we need to balance that with the essence of the viewer promise.
Data sits as a central function called audience technology and insight which reports into the CEO. It helps the product teams, like 4OD. We have to influence them to capture data, then use that data to influence commissioning and marketing decisions. Commissioning is very “gut feel” and creative - how do we enhance that? That is a longer-term challenge. Commercial teams are now looking to get data into the deals they do, which is quite a switch.
Phil Stephan: Sport is a bit behind the curve. At Chelsea, the drive has come from us looking for an angle to compete as one of the biggest clubs in the world. Football is now a global business - we have a huge international fan base. We introduced a single customer view in 2008 which was very much traditional UK-based ticket and season ticket holders. What we’ve been trying to do is build a direct relationship with as many Chelsea fans both domestically and internationally and ultimately create value from these relationships. Data and insight has now become a central component of our partnerships at Chelsea.
Our fans in London have a very different relationship to the club from our fans in Laos. Here the average length of support for a team is 10+ years, over there it is two or three years and the opportunities for engagement are primarily digital. Having a Facebook Like is fine, but developing a true relationship with them is central to the business and that is reliant on data. So everything we do is about giving our fan base back something of value for sharing their information with us - relationships are building a really valuable base for us.
Jonathan Boase: IBM is currently sponsoring a sports organisation and part of that deal is that we do all of the analytics. Those sorts of deals are becoming more interesting - my analytics consultants are getting more engaged. It is less about fee-earning, it is about supporting the clients’ marketing with analytics.
It is a very new model that is stretching us - helping our own guys and the client. It is a much more intertwined relationship.
DataIQ: Financial services is a mature market in terms of data usage. How does Ageas 50 get to fall in love with data all over again?
Stuart Gale: We are an over 50s insurance provider with two brands in the market - Castle Cover and RIAS. Between 2006 and 2008, when we just had one brand in the market, there was a sea change in our thinking. Previously all of our data was processed monthly by an outsourced provider and there was little consideration to what was changing from month-to-month.
We’ve said, what are we going to do differently? That led to bringing the data processing and campaign creation in-house and creating a SCV. The starting point was saving money on buying prospect data and reducing duplicates and wastage. Now it is about creating intelligent marketing campaigns.
Now Ageas UK has bought Castle Cover and has two brands to play with, we are integrating them into the SCV so we can decide who to target with which brand.
The SCV has allowed us to build propensity models and improve our marketing response rates. The challenge in 2013 is to make more use of our data to create profiles and integrate those insights into our marketing campaigns. We always have a challenge to capture data from customers, so we work with our contact centre colleagues to capture relevant information, especially insurance renewal dates.
Also, a number of our customers are the same people who fill in the surveys and feed the data industry’s cold prospect pools. We need to identify the audience we don’t know about. Our marketing director is focused on what proportion of customers are new to the brand rather than just moving between each of the two companies.
Insurance is not always that exciting to individuals - consumers usually don’t want to talk about it unless they have a gripe. However, customer feedback is valuable and we ultimately want to integrate information from customer service and complaints into our retention models.
DataIQ: Readers of DataIQ will be familiar with the business intelligence function at O2 - do you in marketing see the tipping point for data towards sweating that asset now?
Stuart Maciver: This is the most exciting portion of my career so far. O2 is really committed to its customers. Over the last four to five years, strategies have evolved to counter the conditions of our market where margins are eroding. It is about leveraging our unique position as a route to market, holder of customer trust and also holding the most amazing data I have ever seen.
Our core goals are how to retain our customers and grow new business. Some are obvious, like home broadband - seems like a good idea, but how do you bring differentiation into an over-competitive market? We are feeling our way into new spaces, like SmartStep which tracks movement in any retail space to create a marketing opportunity for retail brands or any organisation with a geo-specific location.
Our business is falling into three: evolution of data outside of classic cross and up-sell towards giving new value to customers; developing new businesses based on the information we have; and what can we do about aggregating information and sharing it.
We are running - being obvious in some spaces, making mistakes in others. It is about moving away from the traditional ways of doing business to doing more innovative things with information, like layering data into virtual reality goggles. The trick is to begin connecting the market to the information to the customer in a way that adds value for the customer, but is properly industrialised so it adds value to the business. In a traditional model, why would I care if somebody is in a casino? In a media owner model, I might want to offer them gambling apps. It is about how you capitalise on those opportunities before your rivals do.
We have a company, Weave (formerly O2 Media), which is about using intelligence to deliver offers to millions of subscribers on our network - and we are not getting any pushback at all. When I compare that with targeting products by demographics and profiling, it is a marketplace that is more tolerant, even though the value proposition is only at a basic level right now.
DataIQ: As an agency, Tree London handles a lot of the analytical work for clients that involves looking at sensitive data. Is there an overt filter that says we can identify a lot of behaviours, but targeting some would be a step too far?
Steve Mattey: Those conversations absolutely take place. I still have a feeling that a lot of organisations get data by sleight of hand, however well they have set out their data capture piece or publicised their privacy policies. There is also a commercial balance - when a business is under financial pressure, the temptation is to do just that little bit more to the customer base.
It is often our role to be a little voice saying, do you think you ought to do that because of the long-term effect on ROI and customer relationships? We have to operate as the voice of conscience. A lot of client organisations look inwards, however much they say the customer is the heart of the business. That gets skewed by commercial realities.
DataIQ: In that respect, data is no different from marketing which is constantly looking to stretch the boundaries. Data has just not yet found what those boundaries are.