Professional Documents
Culture Documents
If you’re lucky enough to fly First Class or stay in a great hotel, you’ll soon realise
the best part of it is the service. The human touch is really what sets the
experience apart - not the food or the furniture, but the flight attendant offering
you a blanket if she spots you being cold, or the concierge recommending
attractions or activities in the city.
Great customer service is what all businesses should aspire to -- not just meeting
the minimum of customer needs, but anticipating them before they arise, and
being able to intelligently make recommendations or suggestions.
This, then, is behind the drive towards customer data and better analytics:
businesses want to better build a better model to better understand the
customer. Better understanding leads towards a better product; and more data
collection - while it may seem intrusive -- is all in the name of service to the
customer.
But the key insights here is that more data isn’t necessarily better. Banks
and financial institutes might claim to have big data, but so much of their data
exists in terms of financial transactions that it is only a very narrow, limited view.
Imagine trying to learn about a group of people by only looking at their wallets;
that is the situation banks are in today. They know how much you earn, how
much you spend, and where you spend it -- but that is it.
Banks lack crucial data that could help them understand why: why spending
might go up (because you started a family), why earning might go up (because
you changed industries), or even why you stopped making transactions on one
account (because you’re trying to use a new credit card to gain points).
The banking & financial industry have become complacent, and complicit in this
illusion that they own plenty of valuable data. It doesn’t matter how many
gigabytes or terabytes or even petabytes of data - if you only have transaction
data, you will only be able to make accurate predictions about transactions. This
is the reason why brick-and-mortar retailers are being soundly trounced by
online retailers.
These numbers are useful, but they provide no insight into the purchasing
process: why a customer purchased one item over the other, or which shoppers
browsed but left the store without buying anything at all.
Delving deeper ‘upstream’ into the customer journey gives online retailers a lot
more insight into how to make more sales – should we limit the number of
dresses on offer, or mark the new products for SALE, or make product
recommendations as they search? These additional features of data help them
build a better understanding of how customers shop, and this in turn generates
a better shopping experience.
Plus, online retailers can easily gain greater insight into customer motivations.
Simply by offering free gift-wrapping options, a retailer gains fresh insights into
which products are commonly gifted, and when the optimal gifting periods are
in a year. Recording such data manually for traditional retailers would be
tedious, if not impossible - to note each product or item wrapped.
Armed with information about pricing points, seasonal purchasing patterns and
customer reviews, Amazon can build a better product than even the original
manufacturer. Meanwhile, by becoming the retailer, the product manufacturer
and the payment gateway, Alibaba and Amazon lock you deeper into their
ecosystem and make it harder for their competitors to catch up.
Banks can take a leaf out of the tech playbook with this, by pooling data with
other companies. For example, a cooperation between a bank, a telco and a
retailer helps banks better understand spending patterns and cross-reference
that against locations; whether people shop more from their homes or Orchard
Road or their offices.
It’s important to note that some customers will be uncomfortable at the use of
data; they may feel uncomfortable about sharing too much personal data, or
they may receive automatic product recommendations that may be
embarrassing or demeaning. If you accidentally click on a Bruce Springsteen
video on YouTube, you might be frustrated how often other related videos show
up as recommendations. Unfortunately, these moments may cause customers
to be turned off or to stop using such products or services, so marketers need to
be savvy in making use of the data.
In data science and machine learning, a strong data set isn’t just concerned
about the depth, but also the number of features – identifying characteristics
that define the parameter. The more information about one transaction, the
more detailed the information, the better we understand the consumer, and all
the better to know whether to recommend one airline over the other, or the
right time to offer the customer a blanket and a cup of tea.