technology
‘Developing an analytically driven
capability within an organisation requires vision, sponsorship from the top and a commitment to continuous improvement’
invest in the technical or people infrastructure.” An example of how this might work would be a tele-
coms company buying in expertise in building a propensity scorecard. In this case, the company would provide its data to a service provider, which would in turn cleanse the information offsite, build the propen- sity model and hand back a lead list. “The telecoms company would then go and outbound those customers to either try to cross sell to them or, where they are at risk customers, talk to them to understand what could be done to entice them to stay on.” For organisations that want to create single-user
customer data extending across all of their touch- points, the solution is a lot more complex, says O’Neill. “Where you build this kind of capability, however, it means that every time a customer contacts you, and it could be across multiple different functions, you have a list of transactions against that one single customer. This allows you to analyse their dealings with you. “You can better scrutinise how they’re behaving and
you can build models that will indicate how they might behave in the future. It also allows you to develop a bet- ter reporting capability. However, getting that single customer view can be quite a complex task from the perspective of technology, data quality and process.”
Preparation Before developing any analytics capability, O’Neill says it’s vital to put the customer at the centre of the think- ing process in order to really understand the objectives of a business analytics strategy. “What are your customer experience goals? What
sort of product or service are you providing and where do you want to be in the market? The next step is to really understand the customer’s requirements and how you go about meeting these. You also need to understand the benefits and implications of providing them. Then you can move into developing the solution.” The organisation also needs to decide what its
requirements are, whether this involves increasing profitability, driving revenue, reducing churn, or just improving the customer experience, says O’Neill. “And you need to align your own requirements with the cus- tomer’s requirements.” According to O’Neill, financial services company
62 Irish Director Winter 2010
Capital One is an excellent example of an organisation that has consistently placed analytics as a central enabler of its strategy. “They developed a micro-segmentation view of the
credit card market in the States a number of years ago,” he explains. “On the back of really analysing their customer data and seeing that there was quite a signif- icant differentiation across their different customer segments they introduced the whole concept of the bal- ance transfer programme, offering customers a lower introductory rate of interest. As a result they saw mas- sive conversion ratios in what was at the time a very undifferentiated market.” The company followed up by introducing data-driven
mapping of customer behaviour. “They logged all their common customer problems and preferences and analysed buying patterns,” says O’Neill. “This allowed them to create a system where customers ringing in could be mapped to different service agents according to their behaviour and segment. So, for example, a cus- tomer who had a likelihood of switching or not paying on time would be recognised and transferred to the appropriately skilled agent.”
Embracing the vision Developing an analytically driven capability within an organisation requires vision, sponsorship from the top and a commitment to continuous improvement, says O’Neill. “This type of vision absolutely needs to be led at the executive level, right up to chief executive. Your ops manager or director will be the leader in terms of implementing the change that’s required. Your finance person will ultimately own the management informa- tion component and the data. But I think it needs to be led by the chief executive. “Things have become very similar across many indus-
tries now. Products and prices are very, very similar across providers. There’s no real service differentiation because of the whole idea of globalisation. And people are much savvier and that’s reflected in consumer sen- timent and also how people use the internet. Tapping into all those things to allow you to make better deci- sions about how you target and serve your customers can all be helped by having a better handle on an ana- lytics capability,” he affirms.
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