Broken Data Smart Data Collective

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EBook On Dealing With Big Data with Esteban Kolsky, Brent Leary, Tyson Hartman and myself

Transcript of Broken Data Smart Data Collective

  • The Broken Data Promise:How CRM Failed, and Why Businesses Need It More Than EverBrought to you bySponsored by 2011, Social Media Today, LLC
  • FOREWORD 1 2 3 4 CONCLUSIONSThe Broken Data Promise:How CRM Failed, and Why Businesses Need It More Than Ever3 Foreword4 Customer 360 Esteban Kolsky6 What Customers Want Brent Leary9 The Rise of Analytical CRM Mark Tamis12 Big Data, Big Problems Tyson Hartman14 Conclusions15 Author Bios16 About Us
  • FOREWORD 1 2 3 4 CONCLUSIONSForewordDuring the 1990s and early 2000s, the so-called golden years We will take a two-pronged approach. First, well exploreof CRM deployment, CRM vendors made a promise to their what is necessary to achieve a holistic view of our customers,clients: If organizations bought and implemented complete what data must be collected, and how that data can beCRM suites; theyd be rewarded with 360 portraits of their used. Well also examine the benefits of this approach, andcustomers. These portraits would be generated by the large look at case studies to better understand why organizationsquantity of transactional and operational data that CRM must meet the data produce. Vendors claimed that by gathering alldata about all interactions between the organization and its In the second part, well explain how to monitor and storecustomers, companies could then leverage analytical tools the data needed to create useful customer profiles, andwithin the suite to build deep, meaningful relationships leverage those profiles in different functions. Finally, wellwith customers. present a case study of one organization that successfully used a CRM system to profile its customers.This became the 360 view of the customer promise. It wasnever kept. Its not because we didnt try. We kept detailedrecords of all interactions, all transactions, everything thecustomer did and said. We gathered more information oncustomers during the last 10 years than we had since theinvention of data collection.Despite all this data, we still cant begin to understand whatour customers truly want or need. Worse, we cant use thedata we collect to improve our customer relationshipsoneof the core goals behind the CRM data promise.How is that possible? How could we fail so completely inthe single most important promise made by the most criticalpiece of front office software to be released in our lifetimes?This eBook will explore the answer to those questions. 334
  • FOREWORD 1 2 3 4 CONCLUSIONS1 Customer 360 Esteban Kolsky It may seem obvious, but still needs to be said: This is accurate predictions about behavior within our segments. all about data. If you want to create a complete profile Nevertheless, all this operational and transactional data is of any customer segment, you need to collect, store and still being stored today, and is still being used as a partial analyze lots of data. The data we need falls into four predictor of future behavior. main categories: Attitudinal This is the missing behavioral link. Demographic this is what we traditionally think of when Organizations tend to collect and store behavioral data we talk about customer data. The core data points are name, from their perspective: What is the customer doing and address, and phone number, but we also retain gender, age when? But these questions dont capture the reasons group, education status, income, race, and similar data why customers do what they do, because organizations that will help us classify customers in different segments. dont see the world from the customers perspective. One such group might be males aged 18 to 24 years living The point of gathering attitudinal data is to close this in New York state. Initially we believed that members of gap by asking customers why they would buy a product. these segments would all behave in the same way, but we What circumstances determine the attitude that drives found that isnt always the case. Nevertheless, gathering the behavior? We collect this type of data via surveys basic demographic data still helps us identify customers for and other feedback events, which normally include different purposes. satisfaction questions. Behavioral The promise of CRM systems was that if Sentimental Sentimental data refers to the emotions and we retained and analyzed sufficient transactional and feelings that a customer has towards the organization, its operational data about customers, we could determine products, and the relationship as a whole. It has traditionally how they behaved and make predictions about their future been materialized in metrics like satisfaction, loyalty and behavior. If certain males aged 18 to 24 living in New York advocacy. Sentimental data can only be captured by direct state perform a specific action at a specific time, we can feedback, and can never be inferred from other metrics. infer that the rest of the group will behave in a similar way. This was one of the biggest pitfalls of the original CRM Thus, when a 19-year-old male New Yorker interacts with promise: The original systems tried to guess sentiment by us, we can offer him a particular product with a certain analyzing behaviors, yielding poor or erroneous data. degree of confidence. Later, of course, we discovered that Continued on next page we were missing other core data points needed to make 344
  • FOREWORD 1 2 3 4 CONCLUSIONSCustomer 360 (contd)In short, a complete customer portrait would tell theorganization who the customers are (demographics), whatthey do (behavioral), what they want (attitudinal), andwhy they want it (sentimental). Such profiles allow anorganization to tailor solutions, products, services, andinteractions to what its customers are looking for. 354
  • FOREWORD 1 2 3 4 CONCLUSIONS2 What Customers Want Brent Leary About a decade ago, Mel Gibson starred as marketing their concerns, likes and dislikes freely via social channels. executive Nick Marshall in a movie called What Women Want. We can pick up extremely useful insights by knowing where Nick thinks he can use his charm, powers of persuasion, and to listen, what to listen to (and for), and, maybe most especially his perception of feminine desires in order to important, how to listen. land a major sportswear retailer as a client for his firm. But he never tries to understand whats important to women The tools for listening and engaging are already plentiful, until he gets passed over for a major promotion. and will become easier and easier to use as time goes by. But we still need a strategy for collecting and analyzing Shocked, Nick immerses himself in trying to get inside what we hear, so that we can translate it into solutions the minds of his customersnot because he really cares that solve the challenges our customers and prospects face. what women want, but to prove that he shouldnt have While listening to our customers and analyzing what they been ignored. say, we are also creating meaningful interactions with them that lead ultimately to stronger relationships. After adjusting to his new powers, Nick starts exploiting what he hears for personal gain. He eventually realizes The more active our customers are on Facebook, Twitter that misusing his new power is an overall negative, and other social networks, the more data they create. so he starts listening in order to really understand women, This presents an opportunity to better understand and and not just to validate his preconceived notions. Having engage our customers. It also challenges us to integrate changed his own thought processes, he finally learns how this information with transaction data, activity data and to care about womens needs and concerns, which helps other information that adds up to a layered customer him connect with the audience that he originally took portrait. While the challenges are not trivial, the payoff for granted. can be substantial. While this is only a movieand I sincerely hope there will Lisa Larson, director of customer care at online pharmacy never come a time where people can hear whats going Drug