For Marketer’s any change in customer behaviour is a “gold mine”. Marketing
to customer’s whose behaviour is changing is far more rewarding than marketing
to “static” customers! But sometimes there is "too much change" and in today's market that is exactly what is happening. Marketer's need ,what we at Cequity, call a Modelling factory approach-How to build models at speed!
chief economist Dennis Jacobe concurs that "a fundamental change is taking
place" in the behavior of U.S. consumers, even if it's not clear how
permanent it will be.There is, of course, the irony that as consumers do the
right thing for themselves by saving more, they hurt the economy's chances of
revival by spending less, the "paradox of thrift" as put forth by
John Maynard Keynes.
behaviour and Analytics practises are definitely out of date in today's era of large changes in customer behaviour. Radical changes in
patterns of consumption are here to stay. Even a reduction of the Bank
rate to 0% is not going to impact consumption. The economy needs a much
bigger shift to ignite the circular flow of income from customers to suppliers
of services and goods.For example, a scoring model might lose its predictive
power during a recession if the characteristics entered into the model or the
underlying customer population are sensitive to the economic cycle. As a consequence,
tomorrow's business decisions are driven by models that meticulously
encapsulate yesterday's reality.
Consumer Intentions & Actions Survey monitors shopper behaviour and has
this interesting insight!Shoppers are increasingly rethinking some of their
purchases before they head to check-out counters…close to three in five
(58.1%) say they’re focused on needs over wants, up from last month (57.6%) as
well as last year (51.0%).
it’s obvious that consumers have put the pinch on spending during this
recession, can we expect long-term changes to shoppers’ spending habits?
90.7% of consumers say yes…overall, it appears consumers will simply be more
thoughtful when spending over the next five years, with the majority saying
they will consider each purchase more carefully (55.2%) and/or become more
price conscious (50.7%) when buying food or clothing. Additional plans
include sticking to a budget (48.1%), dining out less (46.3%), and vowing not
to incur a large credit card debt (43.4%)
In the past maybe companies could get by without building analytical capability. But in today's hyper changing market scenario companies need to invest in bringing about a data based marketing culture-without which their ability to respond to quick changes in customer behaviour will be limited!
Read more about how the impact of a recession could have a long term effect on spending patterns of the Boomers segment!
Gut feeling based decision making! All of us do it all the time. But doesn't data have a role to play? Wouldn't we be more effective if we can use data to conduct the equivalent of laboratory experiments! Managers now have the tools to conduct small-scale tests and gain real insight. More than the tools however,testing is actually about the discipline that an organization has to put in place a "fact based decisioning environment". Often many companies find it difficult to build the "eveidence based culture"-an environment in which everyone needs compelling data to take important decisions.
But what is too much testing? Thomas H. Davenport explains the ups and downs of testing in analytics.
For years Banks have relied on "push marketing". Manufacture a product (say a credit card) and then go pushing it into the market using the most "intrusive" methods possible. DSAs(direct sales associates) in the Indian market perfected this art and they would push a credit card to you outside an airport in a mall and in fact anywhere.This push marketing got the banks huge increase in acquistion rates and thereby the "Cards in force" jumped up but not the quality of the customer! And that has led to todays situation where most bank credit card portfolios are under threat with large deliquencies.
How do Banks and other Financial services marketers move from a paradigm of push marketing which is essentially choosing the "Banks time to market" to a new paradigm where the bank chooses "Customer's time to market" by observing changes in behaviour which occur in the customers life.A sudden substantial balance in a customers savings account should trigger a bank's campaign to sell insurance or a mutual fund.
Customers always have a reason behind their actions and the banks have all the data in which customers are actually leaving their "footprints behind". If companies deduce these reasons, event based marketing can positively exploit all customer database to draw a winning marketing strategy. Dan Smith talks about how Event-based marketing (EBM) has emerged as a new paradigm to turn traditional segment-centric direct marketing on its head.
When will Politics start using data analytics at an individual customer level. Apparently the Obama campaign did just that and made the political campaigning process that much more efficient. When will smart data usage for politics become a reality for the world's largest democracy,India.
Compared to Business marketers, perhaps political campaign strategists can find even more useful data, or more sophisticated analytics can make outreach even more effective. Imagine if they tapped into shopping behavior, economic status, and social network/Internet pattern use databases. Micro-targeting could allow a campaign to put resources where they would have the most impact. It could also provide individuals with an understanding of a candidate's position on issues of most interest. Some people might fear this level of knowledge is personally intrusive, but according to Steve Polilli: "I have to believe it would make candidates more responsive to the needs of the electorate. I also hope that it would alert the campaigns that some people such as me are completely turned off by negative messages".
The Obama campaign won more than only because of his motivational speeches. See how data was a key lever to this political campaign shown by Steve Polilli.
Imagine a world where political organizations have the ability to use a precise mathematical fact-based science to create a one-to-one communication with voters based on in-depth personalized information culled from all available data. Check out more on this at:http://callcenterinfo.tmcnet.com/analysis/articles/21964-political-campaigns-discovering-predictive-analytics.htm
The complaining customer - we just can’t stand them! Well, most of us can’t stand them. The reality is that business organizations should love them. Shep Hyken comments that "A complaining customer tells you where you can improve. They actually come forward and show us where we make mistakes. But, most of the time, people hate to hear the complaints. First, a few facts you should know about people who complain. Most of the time, when people have a complaint, they complain to everyone else rather than the person or people who caused the complaint. If you resolve your customers’ complaints, you will keep them most of the time. But first you have to know there is a complaint. So, how can we find those complainers? Well, most likely customers won’t tell us, so, we have to ask them. It is that simple. Call them up or ask them in person. Actively solicit feedback to find out what they are thinking."
And most criticaly use Customer behaviour data to spot Customer service failures as they occur. Customers are constantly leaving behind a data footprint of "failed brand promises". Direct data analytics to spot incidents of customer promises "not met". The crux of " Analytical marketing" is using data to drive an improved customer experience. Imagine if a bank were to call you up and say " I am sorry sir ,we are one day behind schedule on your cheque book request,please accept our apologies and your cheque book will be with you tomorrow morning". Or better still build predictive models to find customers where "service levels are likely to slip" and then proactively monitor that customer's transactions to create a moment of delight. And when you find a problem or complaint, resolve it on the spot. No company is perfect. So find out what those imperfections might be. And, when you hear about a problem, fix it. And make sure you give that customer a reason to come back so you can do it right the next time. Take that moment of misery and turn it into a MOMENT OF MAGIC.See what Shep Hyken has to say about ‘The Complaining Customer’http://www.hyken.com/Article_11.html
Do Marketing guys need to understand technology? Why should CMOs really try to understand what turns the CIO on? Well the truth is that Marketing has silently changed and in many busineses it is more closely wedded to technology than you can imagine.Especially in Services marketing-in banks,Retailers & telecom companies, the Marketer is hugely dependent on technology to drive customer engagement.But often the Marketing team sees its role as the sexy part of business and IT as only the "grunt part". IT organizations often would spend much more effort in the "mission critical" part of the business rather than in enabling marketing. This requires the Marketing organization,especially the CMO, to invest time & effort in communicating their vision to the IT team.
Chris Curran, a Partner at Diamond and the firm’s Chief Technology Officer has this interesting take on the CIO
Also check out this article at the CIO.com about the various kind of CIO personalities. http://www.cio.com/article/162250/State_of_the_CIO_What_Kind_of_CIO_Are_You_