Woody Driggs, Principal and Global Lead of the Customer Practice EY Advisory, discusses why data analytics is key to building trusted customer relationships.
The much-lauded TV series Mad Men, about the 60s advertising industry in New York’s Madison Avenue, reinforced the view that marketing is a world of “creativity.” But marketing today is as much about science as it is a creative art. CIOs understand that their CMO counterparts are transforming marketing performance through the science of customer analytics.
As our previous post outlined, EY’s report Building trusted relationships through analytics and experience found that data analytics is key to building trusted customer relationships. Half of those surveyed by EY said the ability to use data to build trust with their customers would be critical as a competitive differentiator over the next two years. The report highlights pioneers:
- A hotel chain that has built a single global customer data repository across its brands, which it uses to personalize offers through multiple channels, from direct mail to in-room entertainment
- A technology company that is employing predictive analytics to turn transactional data into valuable business intelligence
These pioneers are currently in the minority. Our research found that only 37% of organizations say that they can use analytics to direct communications and outreach. It is a particular challenge with the new digital channels. Only 28% said they could use mobile data to uncover customer insights. This shows a sizeable opportunity for many organizations to do more and drive significant performance uplift.
So how can the CIO help the organization build this critical capability?
The voice of the customer
CIOs already have a packed agenda, from ERP upgrades to strengthening cyber resilience. But, with regard to the critical issue of customer analytics, there are a number of priorities a CIO can focus on:
- Driving the use of predictive analytics in building customer trust, particularly in terms of understanding where the customer relationship is likely to be strengthened or compromised. The CIO can lead the development of processes for mining customer data and using that information through statistical modeling and machine learning.
- Guarding against fragmentation in customer analytics technology. Business functions, including marketing, are making unilateral investments in analytics technologies. This poses a significant risk of duplication and fragmentation. CIOs need to ensure that the tools chosen are consistent with the enterprise architecture and platforms.
- Managing the risks associated with protecting and manipulating customer data. The huge opportunity offered by customer analytics also raises concerns about cybersecurity and data privacy. Cyber criminals are becoming increasingly organized and sophisticated. CIOs can ensure they have an effective cybersecurity capability that focuses not only on preventing attacks, but also on detecting, containing and responding to them, as well as ensuring the governance and frameworks are in place to protect customer data.
Customer is king
A company’s ability to build customer trust will govern success or failure in the future. While they have plenty on their plate at the moment, CIOs can help ensure that organizations fulfill this critical mission through effective data analytics. The “Mad Men” of the 60s exemplified the creative art of marketing but, in 2015, it is the science of data that will earn you the trust of your customers.