A successful digital strategy #3: From big data to smart data
Improving the customer experience and meeting growing customer demands: according to the results of the "Global Customer Experience (CX) Benchmarking Report” by Dimension Data, these are the two main aims of European firms in the development of digital strategies.
The second part of our series talks about why customer orientation has a major part to play in a successful digital strategy. Fact: It is essential to follow and above all to understand customers throughout their entire customer journey. Personas, Customer Experience Maps and Touchpoint Strategies have become tools of the trade for modern firms. However, the actual situation within firms often does not correspond to these findings.
A frequent inhibitor of digitisation appears to be the use of big data. The necessary customer focus cannot be put into practice without the intelligent use of data. Data is the “food source” of computer brains and promotes effective machine learning – every analytics system is only as intelligent as the data that feeds it.
“Knowledge has become the key economic resource and the dominant, if not the only, source of competitive advantage.” Peter F. Drucker, US economist
From big data to smart data
The amount of data available is not the problem – never before have firms had access to more customer data than they have today. In the digital age, almost every action generates new data: every click, purchase or purchase cancellation, every login and every search in an on-line shop is recorded in addition to important logistics data such as quantities stored and production bottlenecks.
This creates a huge volume of valuable data! However, business models such as omnichannel and click & collect result in this data being increasingly fragmented and available at different points in the customer journey.
The first challenge, therefore, is to prevent the formation of isolated data silos and to centralise data from different channels, segment it in a meaningful way and reduce its complexity.
The second, far greater challenge involves obtaining valuable findings from big data which can subsequently be used in targeted strategies and activities. The best data management in the world is pointless if the data obtained does not help to optimise processes and customer relations.
“We are drowning in data and thirsting for information.” John Naisbitt, futurologist
Nearly 50 percent of respondents in a Roland-Berger study consider big data analytics to be the most important skill to be learned by firms between now and 2020. Whether online or in shops, at the end of the day, what matters is making the customer journey as smooth and pleasant as possible with the help of the information generated.
The road ahead for big data
Cleverly used data helps customers to obtain individual advice and optimises the purchasing experience. Modern technology provides numerous possibilities for creating personalised offers: Algorithms create suitable recommendations in real time on the basis of previous purchasing behaviour and customers are “re-targeted” with specific advertisements after they leave the shop.
The salespeople in the shop are also informed in real time about preferences, orders and support requests. If there is a risk of a delivery bottleneck, the IT system automatically checks in real time which subsidiaries, warehouses or suppliers still have the product in stock. The possibilities for using Smart Data are developing all the time: Technological trends such as AI and augmented reality are offering completely new ideas in terms of sales approaches and customer loyalty.
If used cleverly, prognosis and pricing tools, Web chats, chat bots and sales and delivery robots will create major competitive advantages in the future. Conclusion: The time for gut decision-making at management level is over. Nearly all modern business models and forward-looking technologies are dependent on a strong data basis.
A sound understanding of big data and the performance of innovative data analysis tools therefore forms an integral part of the management DNA of successful leadership teams. Very shortly we will be presenting the main technological trends that you should bear in mind when developing your digital strategy in part 4 of our blog series.