9 Nov, 2021
The traditional model of approaching and engaging with customers in a corporate or segment is fast changing. The shift is individualistic where ‘n= 1’, i.e., personalised and specific to the customer. Given this trend, expectations, and demands from today's digital age customers, 'data-driven analytics' is the only way to understand and truly know your customers. The golden days of knowing your customer physically by face, name, and neighbourhood are non-existent now. Hence the need to leverage the data being captured at every touchpoint.
I believe the key to unlocking many of these opportunities is data-driven Customer Value Analytics (CVA). The excitement over customer analytics is not mine alone; it’s born out of trends in the market such as loyalty programs, coupons, nectar cards, free Wi-Fi in airports, shopping complexes, town centres, pubs, and much more.
To respond to widespread interest in analytics and recognise its potential around new ways of working, my data science colleagues and I will be writing a series of blog posts to demystify this topic. We aim to share insights from business, technical, operations, and skills perspectives.
CVA Business Value
Most of my conversations with operational heads, finance and senior business leaders tend to focus on cost savings, efficiency and sometimes touch upon data monetisation. Whereas my discussions with sales, marketing, customer services, and digital program stakeholders primarily focus on:
- Understanding citizen behaviour to increase voluntary tax compliance or improve engagement and experience.
- Understanding customer behaviour, the propensity to drive cross-sell and up-sell.
- Suggesting next best action for existing customers.
- Ability to run personalised campaigns with a high return on investment (ROI), using digital assets including social media and other new-age channels
- Predicting customer churn (churn for low-value customers, protecting high-value customers).
- Identifying citizen populations that need certain types of care or services.
CVA can help address these challenges and many more. However, the true power of analytics is the ability to mine business insights even when you don’t know exactly what you’re looking for. This is why we often don’t spend much time asking clients to define their challenges; instead, we outline the most common challenges and suggest the best course of action for harnessing the power of data-driven analytics.
CVA Powered by Data Science & Machine Learning
Customer Value Analytics is a compelling way to address these challenges. It’s an approach that uses our CVA framework, predictive analytics models and data science to bring out business insights in a way that has never been done before!
CVA can be extended to any analytics where there is a customer dimension to it. The B2C market has found this to be really powerful - for example, the UK’s telecom, retail, utilities and public sectors, which are regulated industries and, at the same time, face the complexity of engaging with millions of users in a competitive market. Our CVA solution has been able to make a significant impact with millions of pounds in cost savings and top-line growth.
The corollary question that quickly comes up for discussion in all my customer meetings on this topic is ‘data privacy, protection and security'. How do you target personalised or customised offers and campaigns without compromising guidelines or legislation? How can you demonstrate to regulators that these have been adhered to?
The key is to leverage non-personalised data by mining large sets of corporate systems data and new-age digital assets, applying data science, and deriving insights that can be applied to individuals with a high degree of potential success. One of the most enticing aspects of the CVA approach is that it leverages cutting-edge big data platforms that are open source, which means projects can be kickstarted with minimal technology expenditure.
CVA in Action
Our solution page has more details about how this works. In this blog post, however, I’ll focus on a specific area of opportunity for tax authorities, media, and local government public sector market in the UK.
Traditional customer analytics in the UK market is, at best, to have Business Intelligence (BI) and Management Information (MI) reports and dashboards by querying the database such as:
- Enterprise resource planning (ERP) back-office analytics report pack
- Top 10 customers/tax defaulters, customer churn
- Golden group of customers/high-value customers
- Reactive reports of defaulters in payment and spend (read: waste) money in chasing
This is carried out based on the money the customer spent with the organisation, which is not necessarily the best approach. Some organisations find it even challenging to be able to do the above, let alone leverage data-driven analytics to increase top-line proactively.
Now, imagine, you are able to combine the data from CRM systems - new-age digital assets including social media, unstructured data from customer chats, emails, calls - and apply a data science approach to develop models to understand customer behaviour, value, and predict future relationship trajectory. This is the power of CVA and a true example of delivering business value using data-driven analytics.
Now, let’s look at another example in the public sector – local councils and governments are beginning to respond to the digital paradigm shift. A key driver in this industry segment is cost savings. CVA can be leveraged to identify the levers to move citizens from higher-cost channels (telephone, email, face to face, chat) to lower-cost self-service digital channels. Our CVA solution can tremendously help these organisations leverage data-driven analytics to identify and predict citizen segments that are likely to make this transition. Again, a myriad of data-driven analytics using CVA is possible for populations’ analytics – predicting vulnerable children and adults, social exclusion, and citizens in need of special needs – to proactively engage with them. This can potentially save billions of pounds for the UK public sector. Possibilities and opportunities are endless using Customer Value Analytics.
You can explore insights from a prototype CVA solution in as little as eight weeks, using technology frameworks and working with just a couple of data scientists to define your requirements. A complete CVA solution links customer data insights to your sales and marketing strategy, which drives higher customer satisfaction, improved marketing ROI, and ultimately, top-line growth. This is also where you can drive significant operational benefits, such as fewer troubled families intervention, care home admissions, the ability to target services to promote better wellbeing, and lower costs.
I hope this overview has triggered some ideas about how your organisation could benefit from Customer Value Analytics (CVA). It’s an exciting area to be involved in, from a business and a technology point of view. I’m keen to discuss any future opportunities so feel free to get in touch here.