BEST PRACTICES IN BIG DATA AND ENGAGEMENT Capitalizing on Big Data Opportunities White Paper December 2013
Introduction Marketers have long struggled with data, and it is certainly not a new challenge. In a study conducted by the CMO Council in 2007, senior marketing leaders agreed that data trapped in functional silos significantly stymied their ability to engage in more personalized and targeted communications. But as digital platforms have advanced and customer data repositories have swelled, new issues have emerged that require a new partnership between marketing and IT resources to better power customer engagement platforms while optimizing data aggregation and analytics. In early 2013, the CMO Council refreshed its review of the relationship between the CMO and CIO, identifying the key challenges that separate the two functions as well as the points of mutual interest that have brought the two roles together. Interestingly, while both functions admitted to strains in the relationship caused by everything from 61 Percent of Marketers and 60 Percent of IT Executives Say Big Data = Opportunity and Obstacle platform ownership to governance and budgeting data and identifying solutions to turn big data into actionable intelligence and insights emerged as the key points of synergy that are driving a deeper bond between the two teams. Big data, as seen by both marketing and IT, is part blessing and part curse. While critical to achieving a customer-centric enterprise, big data is widely believed to be as much of an opportunity as it is an obstacle, according to 61 percent of marketers and 60 percent of IT executives. As organizations press forward to demonstrate their dedication to delivering a customer-focused experience, 52 percent of marketers and 45 percent of IT professionals believe functional silos block the aggregation of data from across the organization, making it difficult to achieve customer centricity. *Source: CMO Council Similar sentiment is revealed in a Forrester study specific to applying personalization in customer engagements as more than 70 percent of marketing executives participating in the study believe that personalization can have a significant (or very significant) impact on everything from customer retention rates to customer lifetime value. While marketers are eager to deliver more personalized and relevant experiences, the Forrester study goes on to reveal that few are able to actually follow through. Only 14 percent of the marketers surveyed are actually personalizing across all channels. While 80 percent are using customer-specified preference data to personalize experiences in some channels, a staggering 78 percent admit they are actually struggling to deliver consistent personalized experiences across channels. However, marketers also believe that any challenges of personalization will change drastically within the next three years. Take email, for example. Forty-one percent of marketers are personalizing email communications today, but 75 percent say personalization will be part of every email interaction in the next three years. 78 percent of marketers struggle to deliver consistent personalization across channels. * Source: Forrester In order to reach these levels of rich customer engagement and personalization, marketers are looking to best practices and leaders who have already taken the leap into customer centricity. The CMO Council has identified three organizations that have leveraged big data to improve experiences and personalization across a multitude of channels. Burberry The global fashion leader, headquartered in London, operates 206 stores, 214 locations within department stores, online stores and 49 outlets. Burberry s commitment to the market leader in Copyright CMO Council. All Rights Reserved. 2013 2
innovation has included significant investments and top-down dedication to advancing digital customer experiences to provide a highly personalized, cutting-edge shopping experience. Burberry has become the standard for advancing into this digitally empowered customer landscape. In an article from the The Guardian, the iconic UK brand was lauded as a clear leader in developing a new, fresh customer experience. There is no doubt that Burberry is one of the most successful examples of a luxury brand that has harnessed digital channels as a way of delivering unique experiences, explained the article. In fact, their customer experience has been so noteworthy that another brand known for innovation and advancing the experience recently hired away Burberry s CEO, Angela Ahrendts, who will now oversee the refresh of Apple s retail strategies and customer experience. So what has been the secret to Burberry s customer experience success aside from being a luxury product coveted around the world? Arguably, Burberry has harnessed the power of big data to create a real-time, data-driven, highly relevant customer experience that is seen as a value rather than an intrusion. When Burberry revamped its London flagship store, it introduced garments with radio frequency identification (RFID) tags attached, allowing the brand to trigger everything from interactive video displays that showed how individual pieces could be styled to additional products that could complete an outfit. These new smart garments could also provide rich insights into the shopper, allowing Burberry to gain access to real-time behaviors and information about the customer. For many, this influx of in-store, real-time data could have proven to be paralyzing. However, for Burberry, it provided an opportunity to craft a new, relevant, service-oriented experience that could directly benefit the customer. The Challenge: Create an omni-channel customer experience that is completely integrated across online and offline channels to deliver a unified and relevant customer experience, which creates loyal and engaged customers. How They Did It: Implementation of an analytics platform that could aggregate data and insights across purchase, preference and social media repositories to deliver real-time insights and intelligence to empower instore sales teams to deliver a more personalized, real-time experience Brought the digital world into stores with tablet devices fueled with predictive analytics to help provide recommendations and streamline the shopping experience In-store innovations like RFID-tagged clothing provide new sources of relevant data about customer preferences and behaviors, allowing the brand to know more about the customer to deliver an even more personalized experience. To read the complete Burberry case study prepared by Bloomberg BusinessWeek, visit But RFID-enabled experiences were just the tip of the big data iceberg for Burberry, who recently launched a program they have dubbed Customer 360 a digitally driven experience platform that invites customers to immerse themselves in a new in-store, digitally enabled experience. The program relies on customers who opt in to share their purchasing history and their RFID shopping experience, as well as their social feeds and various points of insight around preferences and expectations. Through its Customer 360 program, Burberry has crafted rich, comprehensive customer profiles that combine information from social media profiles, purchasing histories and stated preferences. These profiles, updated and accessed in real-time, enabled in-store sales consultants to further personalize and customize a shopper s experience by accessing information on digital devices and providing a personal shopping experience on the spot regardless of location. This has allowed Burberry to deliver the same luxurious, personalized service to a customer whether she is shopping in her hometown or across the country. A sales executive can greet her by name, Copyright CMO Council. All Rights Reserved. 2013 3
leverage predictive analytics to make relevant recommendations on products, and help locate a garment instantly should the customer prefer to pick it up closer to home. In a case study of Burberry s real-time computing advancements written by Bloomberg BusinessWeek, Burberry s former CEO is quoted as saying that in this new digital world, the brand is looking to break down the barriers between the digital and physical spaces for the customer so that walking through the doors is just like walking into our website. In Burberry s case, with a strong culture of customer centricity in place and the platforms, tools and analytics needed to manage the complex and constant flow of both structured and unstructured data, they are able to truly deliver on the luxury brand s promise of quality, service and style. CenterPoint Energy When the CMO Council asked 1,300 consumers about their relationship with their utilities for its report, What s Critical in the Utilities Vertical, it was clear that identifying savings and getting more value were top of mind. Some 72 percent of respondents admitted to actively seeking cost savings and ways to lower their utility bills. When asked about their primary complaints in engaging with their utilities, high costs topped the list, but 36 percent said they were troubled by increases in cost that were not accompanied by increases in service value. Consumers were also concerned with long wait times for customer service, persistent service outages or interruptions and the length of time it took to resolve issues or make repairs. Serving more than 5 million metered electric and gas customers across the southeastern United States, CenterPoint Energy was certainly experiencing these customer sentiments. As the energy industry began the transition to smart grids as a way to better deliver service and maintain networks, CenterPoint Energy made the bold decision to fully commit to this new technology and the wealth of information and data that could be collected and aggregated through these new systems. Today, CenterPoint Energy leads the United States in Smart Grid Maturity, according to GTM research. While the program has helped consumers significantly control and even lower their energy consumption and use, the smart grids have also enabled CenterPoint Energy to amass a huge store of information about the performance and efficiency of the grid, from the meters and transformers to the expanse of other technologies and systems that are needed to provide electricity. In a case study written by Bloomberg BusinessWeek, Dr. Steven Pratt is quoted as saying, We used to read 88,000 meters a day manually, and now we can gather 221 million readings a day electronically. While the real-time technology has created clear operational efficiencies, by leveraging its big data repository, the company can proactively manage service issues, eliminating key concerns that customers often have while boosting bottom-line strength thanks to clear operational streamlining. Big data and analytics have become key components to CenterPoint s customer engagement strategy, leveraging the intelligence gathered through individual customer meters to provide better service and resources to help customers manage their own energy consumption. Mitigating service issues has been a large part of CenterPoint s strategy. Thanks to the real-time data being analyzed, the utility can identify small fluctuations that may go unnoticed by customers but could be indicators that a larger issue is imminent. Not only is CenterPoint leveraging smart grid data, but by pulling in external data like weather forecasts, future events like storms or severe weather warnings are analyzed to predict potential outages or interruptions based on historical data or the age of equipment. By understanding these patterns and predictions, CenterPoint can plan for potential scenarios and ensure that service is restored as quickly as possible. Copyright CMO Council. All Rights Reserved. 2013 4
CenterPoint has also changed the way they learn about and understand their customers. Once relying on customer satisfaction surveys, the utility struggled to get a true picture of customer sentiment and experience. With its newly launched Customer Vision Platform an integrated services application that is currently being developed and deployed CenterPoint will soon be able to pull data from across the business and get a clear picture of the customer s total experience. The goal for the platform is to allow the company to streamline the customer experience across all touch points and channels. The company also has plans to leverage the analytics and big data platform to better target and segment its customers and market so that a more personalized level of service and engagement can be achieved. If we can provide specific energy services that will truly make our customers lives easier, we know we are using the data to serve them better, Pratt told Bloomberg BusinessWeek. And that s what big data and analytics [are] all about. Conclusion In a time when marketers are leading organization-wide dialogues around where and how data must be leveraged to optimize performance and create new opportunities to exceed customer expectations, each of these case studies demonstrates that big data can return big rewards in customer experience optimization and operational excellence. Both Burberry and CenterPoint, while addressing drastically different issues from two very different industry perspectives, are very similar in their commitment to placing customers expectations at the core of their big data strategies. Neither brand started with a perfect system, but they did have a clear mandate to better understand and embrace the customer, delivering a highly personalized and relevant experience to customers, regardless of channel of engagement. This commitment to the customer has led to a natural commitment to big data. It has opened the door to utilizing predictive analytics and sentiment insights to develop profitable engagements without sacrificing operational performance and excellence. These case studies demonstrate that the path to knowing about the customer s expectations without sacrificing the organization s operational requirements and expectations runs directly through big data. The opportunity for the senior marketer is to become the champion of developing a big data-driven customer experience strategy, bridging conversations across the organization and ensuring that the customer s voice is not lost in the big data discussion. Perhaps CenterPoint Energy s Dr. Steven Pratt said it best in his interview with Bloomberg BusinessWeek: The value of data mining is finding out what you don t intuitively know. Copyright CMO Council. All Rights Reserved. 2013 5
ABOUT THE CMO COUNCIL The Chief Marketing Officer (CMO) Council is dedicated to high-level knowledge exchange, thought leadership, and personal relationship building among senior corporate marketing leaders and brand decision-makers across a wide range of global industries. The CMO Council's 7,000-plus members control more than $350 billion in aggregated annual marketing expendituresand run complex, distributed marketing and sales operations worldwide. In total, the CMO Council and its strategic interest communities include more than 35,000 global executives in more than 110 countries covering multiple industries, segments and markets. Regional chapters and advisory boards are active in the Americas, Europe, Asia Pacific, Middle East, India and Africa. The council's strategic interest groups include the Coalition to Leverage and Optimize Sales Effectiveness (CLOSE), Mobile Relationship Marketing (MRM) Strategies, LoyaltyLeaders.org, CMOCIOAlign.org, Marketing Supply Chain Institute, Customer Experience Board, Digital Marketing Performance Institute, GeoBranding Center and the Forum to Advance the Mobile Experience (FAME). Learn more at www.cmocouncil.org. ABOUT SAP As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable more than 238,000 customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit www.sap.com. Copyright CMO Council. All Rights Reserved. 2013 6