Going Truly Customer Centric
The retail sector has been hugely disrupted in recent years by companies such as Lidl and Aldi. The pace of change in what is still quite a slow moving industry, posting double or triple figure market share growth rates, should be enough to frighten any business that hasn’t experienced true transformation in the last few years. Add to this, in an increasingly digital world (where ‘trying out the new thing’ is a URL away, rather than a half hour trip to a different physical location), retaining and developing a customer focus should be one of the top priorities for any company.
In a previous job, this was nicely summed up to me in a single question from senior management – “What are you doing for our customers today?”.
This goes beyond Customer Experience or Data Science, but rather, is about the mentality of an organisation. Drawing again from retail, for too many years no one tried to disrupt the market and drive down prices – this led to buyers being lazy when negotiating prices with suppliers, and back margin as a main source of profit, rather than trading on increasing volume from customers. With the German discounters in play, this has completely changed the game – the big pressure focus has been, quite famously, on price deflation, and simplifying the user experience – leading to some of the larger retailers looking at the partial or complete removal of promotions and oft-disliked deals such as Buy One Get One Free.
For most businesses, a highly detailed understanding about the customer as well as what about their business appeals to them is crucial. This makes the business successful in being able to push the right products to the right people at the right time and to be able to aggregate a lot of unstructured data in comments from customers and convert into actionable, macroscopic insight. Some interesting examples of such industry leading data-driven business decisions:
- Netflix drive most of their decisions through the use of data, from passing up “The New Jeremy Clarkson Motoring Show” to signing on “House of Cards”. They’ve recently started cutting back on the amount of licensed content they host in favour of original programming as that is the big draw for their customers.
- Uber created a business where people can order taxis to them cheaper, faster, and easier than other methods.
- Google offer a range of free services (such as Google Maps, gmail, Google) which allows them to massively enhance their targeted advertising suite.
- Loan websites use social media data to improve the accuracy in their prediction of default rates by 40% – allowing them to offer better interest rates to the customers less likely to default.
- The banking sector is facing huge disruption in the next few years as banks with extended/ 360 days a year opening hours start up, or as digital-only banks get their licenses and come into the foray.
With digital disruption easier and faster in nearly every industry than ever before, it is vital now more than previously to ensure companies are in a place where they can respond quickly to fast-changing customer needs, and make data driven decisions around their customers.