As I wrote in my recent blog post “Why 2016 is the year of customer intelligence” retailers should be working towards building – not just their customer data capabilities – but their ability to overlay data with emotional insight and use that knowledge to make successful changes across their business.
As part of our drive to understand the level of customer intelligence that exists currently within the premium and luxury sector, we launched the Customer Intelligence Index back in January.
The Customer Intelligence Index enables retailers to benchmark their customer data and insight capabilities with their level of customer knowledge and their ability to use this insight to make successful changes to their marketing and wider business. Once the survey is completed, we produce a report which outlines their capability within the three areas of customer intelligence with recommendations on how they can improve.
The Index has only been live for just over a month, but already, the results have shown some common themes and has highlighted the main areas that retailers need to improve on in order to place the customer at the heart of their business.
Data management and collection
Developing effective loyalty programs that capture useful data
Not only does a loyalty programme encourage brand loyalty and repeat purchase, but retailers can use the data to gain additional insight into customers’ behaviour and preferences.
Tracking customers as they move from key segment to segment
Many retailers have begun to segment their customers into useful segments but they aren’t tracking them as they alter their spending habits and move to another segment. Retailers who cannot track this movement risk delivering very different messages to the same customer or failing to reward them for increase spend and loyalty.
Understanding the value of customers by acquisition channel
Attribution is an important, but a difficult element of customer insight. Being able to use Google Analytics and transactional data to attribute the value of each marketing channel by the value of the customer it drives is proving tricky. This means retailers are at risk of investing in acquisition channels that drive low-value customers or ignoring those that have the potential to drive high value.
Predicting future purchase behaviour
Being able to manipulate data alongside emotional insight has proved to be limited with the retailers who have taken part in The Customer Intelligence Index so far. The results have shown that they are finding it hard to make informed forecasts on what customers will purchase in the future and therefore are at risk of having the wrong product or stock and the wrong time.
Regularly reviewing the customer strategy
Retailers are struggling to develop a ‘test, learn, refine’ model on their customer strategy and marketing activity. With consumer needs ever-changing, actions being taken could be out of line with what customers want or how they are currently behaving.
Lack of resource to track KPIs and collect and communicate customer insight
Many retailers still don’t feel they have the resource in-house dedicated to leading the creation and communication of customer insight. They may be collecting it in different places, but have no flag bearer to combine it and ensure it’s being used across the organisation. The result of this is that any insight collected can be rendered useless as it is not be used in an effective way.
The areas outlined are where retailers have consistently scored less than 40% but are only the tip of the iceberg. There are many other areas being highlighted that are still being scored below 50%, so watch this space as we divulge more results.
Better still, take the survey here and find out where you come compared to other retailers on the Customer Intelligence Index.