Digital Transformation: Using Data and Analytics in a Customer-Centric Way

Previous technology shifts, such as the introduction of enterprise resource planning software, tended to be inward-facing, involving little contact with the customer. Things are different this time around. The companies that are embracing today’s digital transformation trend are focusing squarely on the customer—connecting customer-facing initiatives with business processes to stay ahead of the competition.

How pivotal a role is the customer playing? In a recent study by the SAP Center for Business Insight and Oxford Economics, the top 100 “transformative” companies were 2.5 to 4 times more likely to report value from next-generation technologies. More than 90% of these digital transformation leaders have adopted mature digital transformation strategies and processes to improve the customer experience. Nearly three-quarters said digital transformation has generated significant or transformational value customer experience and engagement.

Clearly, the customer experience matters. Here are some ways today’s most transformational companies are infusing data and analytics into their business processes to drive customer value.

They are generating information—and consolidating it. Shoppers are demanding more choice and richer content at all times, on any device. To meet demand, retailers need to deliver more personalized content, faster and across channels. To do this, they need access to data—from every customer interaction, across multiple channels.

The highest achievers are consolidating customer interactions from stores, online, and mobile channels with insight from social media feedback via Twitter, Pinterest, and other platforms. The information serves as the basis for a “single source of truth” to help retailers optimize branding, marketing, promotions, pricing, merchandising, and inventory management processes.

They are using data to reach—and interact with—customers. Today’s transformational companies use data to interact with customers, not just market to them better. These businesses can tap insights from customer interactions—from individuals or from the collective audience—to reach out over different channels with relevant communications. Use of “chatbots” is becoming a popular mode of interaction, automatically improving user experiences based on data.

Data is critical—make no mistake. But it can’t be positioned as a replacement for creativity. In other words, it’s not about creativity versus data—it’s about creativity enhanced by data.

Companies gather data to analyze and improve the customer experience and then to create targeted messages emphasizing the brand promise. But emotion, storytelling, and human connections remain as essential as ever.

They are engaging with the customer of one. The interactions described above are part of a strategic shift where marketers devote less resources broadcasting at customer groups and more at interacting with customers individually. This is sometimes referred to as serving the “customer of one.”

The shift has been driven by improvements in technology. In the past, marketers gathered information about broad demographic groups—men 25 to 49 years of age, women of a particular ethnic group, children living on the East Coast—and pitched broadly to those groups. They made assumptions about their targets’ preferences based on a few demographic points and essentially told them what they should like.

Now, using analytics, machine learning (ML), and contextual information about a customer’s current state, companies can enter into a dialogue with that particular customer. Everything the customer has done on the site and in their public information is similar to a fingerprint, revealing preferences. Segment data is still useful, but it’s less of a focus these days. 

They are developing products and experiences that self-improve. The goal of every business is to continuously improve—to learn from its mistakes, make better products, and deliver better service. In the past, businesses would accomplish this by doing customer surveys and studying their own internal processes. These latter tactics are still important today, but advanced technologies are making the improvement cycle more efficient.

Tesla, for one, has equipped its cars with sensors and Internet of Things connections to gather vast amounts of data. The company collects this data and applies analytics and ML to create a better driving experience. It feeds improvements based on this data back into the cars, creating a better driving experience, which increases the attractiveness of the cars to consumers. Presumably, more consumers then purchase Teslas, which continues the virtuous cycle. Additionally, Tesla might use the collected data for other future business opportunities that are not clear yet.

Expect more of this in the not-too-distant future. More interactions will feed more data back to businesses, which will improve products and sales processes, making customer interactions more seamless and valuable.

They are capitalizing on micro-moments. Today’s customers have dispensed with the old practice of following a linear path to a sale—viewing an ad, clicking through to a website, and then buying what they need. They’re embarking on fragmented journeys that can shift at any time. Retailers that embrace digital transformation are inserting themselves into those journeys to deliver the right information at the right time. They’re hitting consumers with just what they need at what Google calls the “micro-moments” that matter.

Consumers that are in the “I Want to Know” moment are looking for information, not a hard sell. Brands can leverage predictive models to use this moment as a time to deliver instructive content that answers questions rather than pushes a sale. Consumers that have moved to an “I Want to Go” moment will be responsive to maps, directions, and in-stock inventories more than specific product information. To target consumers in an “I Want to Do” moment, create how-to videos to help people use your product or service, whether that means baking cookies or buying a home. Make sure the content is useful when people come to you on mobile mid-task.

Then there’s the holy grail—the “I Want to Buy” moment. Consumers decide to buy from anywhere—the home, the car, the store aisle, or while out on a walk. Use location and device clues to help them seal the deal however they prefer: on your site or app, in a store, or on the phone.

They are treating customer data with care.

It’s important to remember that the companies truly leading in customer experience are those that treat customer privacy with respect and are mindful not to cross boundaries. While opportunities for companies to deliver enhanced customer experiences are greater than ever with the advancement of technology, governance is also at an all-time high. With compliance standards such as the European Union’s General Data Protection Regulation being enforced, companies should make data privacy a top priority and ensure all customer information is handled properly. Data transparency not only allows companies to adhere to regulations, but also helps strengthen customer relationships. This means that at any time, customers can ask a company to show what personal information they have in their databases and companies can easily comply with the request, giving customers peace of mind.

Be Positioned for the Future

Today’s most transformational companies are getting ahead by using data and analytics in an effective, customer-centric way. Whether it’s ensuring each and every message a customer receives is specifically tailored to them, or diligently protecting their personal information, companies need to prioritize the customer in everything they do.

By taking advantage of customer insights, organizations can better serve individuals and interact with them on a personalized level. It’s a practice that will position them well to take advantage of not only the current technology shift but to brace for the next one that comes along.


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