Missing the Data Point.

It’s true we’ve seen an explosion of data and analytical tools over the last few years, all with tremendous upside for marketing and sales. And that’s come with a lot of high expectations and hype. I think many companies miss the point about the power of all this data. I see two common mistakes:

1.    Using data to sell, not serve

If you approach data as a means to cross-sell vs. truly surprise and delight your clients with great experiences, you are missing the point. Clients expect firms to use data to anticipate their needs and make their lives easier, not to sell them new things. Consumers will likely know the difference and vote with their wallets and their referrals.

Let me give you an example that a colleague shared that is a simple, but a good, example of how a company effectively used data with the goal of serving, not selling. And, not surprisingly, this instance led to more sales:

After my colleague ordered kids’ snowshoes from an online retailer, one of their customer service representatives called her before the order shipped to offer advice about sizing snowshoes for little kids. Turns out it’s hard to buy shoes for kids, much less snowshoes, without trying them on. It was a consultative conversation that ensured my colleague got the right shoes the first time. It also saved the retailer from having to handle a return if the shoes weren’t the right size. As a result of that call, she purchased several additional items and has returned to their site multiple times since.

The retailer clearly used data to identify items that have high rates of returns which are a business cost – restocking, processing and driving down customer satisfaction – and turned it into an opportunity to surprise and delight the customer while growing her loyalty to company – a virtuous circle. 

2.    Focusing too much on third party data when you don’t understand your own data

A lot of companies get excited about third party data because it helps build richer, more meaningful client profiles. This makes it easier for a company to design custom offers, products and services based on what we know about the client. I get excited about those things as well, and at Schwab, we are always looking for ways to broaden our understanding of our clients.

But what use is third party data if you don’t understand the data clients provide by their actions within your company’s platforms? In 2017, it’s a very reasonable assumption that a client or customer expects you to know everything about their interactions with your firm. Here’s another example from another colleague:

My colleague has earned top loyalty status at major global hotel chain, and, as such, she often gets highly customized offers that reflect her status, her preferences, travel patterns, etc. The offers reflect a deep understanding of the client and she values these. It’s an example of a decent use of data to bring value to the client.

At the same time, she frequently stays at one of the hotels in the chain each year. She estimates she’s there about 20 times over the year, which is about 50 to 60 nights. Every time she checks in, the front desk asks her which newspaper she would like, as if it is her first time there.

Forget the fact that, on a human level, the front desk employees should recognize her, which we can excuse for one reason or another. But consumers won’t excuse the fact that a basic CRM platform doesn’t exist internally to recognize and acknowledge her loyalty and preferences at such a critical interaction with the brand.  It’s a great example of a company that has invested in third party data to better understand the client, but doesn’t understand the core interactions the client is having with their brand when it matters.

These examples provide good illustrations of how important it is to understand your clients and use that data to personally connect with them - to make them feel like we know who they are vs. seeing them as a profit point. It’s on all of us to ensure we use data to truly surprise and delight and make the lives of our clients easier. That’s what they expect from us and it is key to long-term brand loyalty.

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