Companies are collecting more data than ever on their customers. But what’s the point of collecting all that data if they aren’t going to use it to improve the customer experience?
Some companies are starting to use it more – to the benefit of their customers.
I recently came across an Amazon product with a message underneath it that I hadn’t see before: “Most customers keep this item.”
In an intriguing use of data, it turns out that Amazon has begun a limited test in which it lets customers know whether those who order an item tend to keep it – or not.
“Frequently returned,” the warning label advises, in what a company spokeswoman said is an effort “to help our customers make more informed purchase decisions.”
The move by the e-commerce giant, already known for its prolific use of data, highlights a growing trend in which brands are making better use of the reams of data flooding in with the advent of the digital age. The information about consumers, often driven by advancing technologies such as artificial intelligence and machine learning, is used to help brands understand their customers better so they can provide a more targeted, personalized experience.
As one online reputation management firm concisely put it: “How do you provide a positive customer experience that will enhance customer loyalty and create brand ambassadors? The short answer is data.”
Digital Natives Lead the Way in Leveraging Data
Many of the practitioners of data-driven customer experience are indeed, perhaps not surprisingly, online enterprises. Netflix, for example, collects a ton of subscriber viewing, demographic, and other data, stores it in a centralized data warehouse, then uses data analytics including machine learning algorithms to analyze it.
The result is those detailed content recommendations familiar to any subscriber, designed to improve the user experience – and, of course, bring in revenue.
Brick-and-mortar brands are also embracing data. Grocery giant Kroger has won plaudits from experts for its use of so-called big data to personalize old-fashioned direct mail coupons to customers, which are returned at a high rate.
The increased use of data is a smart display of a key customer experience tenet: do the simple things better. While the process of accumulating data incorporates some of the most complex technologies, the notion behind it could not be more simple: If you are taking the time to collect customer data, it only makes sense to use it.
Otherwise, why collect it in the first place?
A Flood of Data in the Digital Age
While companies always collected data about their customers – who they were and what they did and did not buy – the digital revolution has brought with it an ocean of customer data. The challenge? Using data to improve customer experience effectively, fostering a sense of trust and brand loyalty in an increasingly competitive market.
After all, the more we know about our customers, the better we can tailor their experiences, turning casual visitors into lifelong patrons.
Some say too much of that consumer information still goes unused. “The amount of data that businesses have access to is growing every year, but few companies are taking advantage of these large datasets as they should,” says Adobe, which advocates using data to improve customer experience and offers platforms to do it.
Ignoring the gold mine of data can lead to missed customer experience opportunities, with customers feeling disconnected or misunderstood by the brands they engage with.
Many brands are now aggregating consumer data through Voice of the Customer (VoC) programs, which are designed specifically to discern consumer needs for the purpose of creating better customer experience. This is an example of combining VoC with “AoC” – Actions of the Customer. This includes browsing patterns, social media interactions, and even geolocation data, which all play pivotal roles in molding the modern customer experience.
Examples of Companies Using Data to Improve Customer Experience
At Airbnb, data experts mine user search histories to determine customer preferences – and offer personalized listings to match.
The company also uses data analytics to evaluate user ratings and reviews to better inform search results, along with looking at user IP addresses and GPS data to base results on their current or desired location.
“By embracing data as the invaluable voice of the customer, Airbnb can continuously optimize its user experience,” raved one data analytics site.
Music-streaming app Spotify also embraces a data-driven culture, analyzing listener data through machine learning and other tools to make personalized recommendations designed to improve user experience.
Back in the brick-and-mortar world, Marriott Hotels have tested facial recognition check-ins to make guest stays more convenient and started putting Amazon Echos in rooms, allowing guests to use Alexa even on vacation.
Companies Should Keep Using Data To Benefit Customers
Customer experience leaders are embracing these approaches, saying companies should take advantage of the new technologies and use data to understand customer behavior like never before.
That will result, they say, in more personalized service recommendations and targeted interactions that build brand loyalty – and provide a more delightful customer experience.
That seems like a wise approach. Those who interact with customers should be adopting a customer-centric approach as a guiding business principle.
If the data is there to help, customers and brands will only benefit.
As the landscape of business evolves, the brands that will truly thrive will be those that not only collect data but use it in insightful, innovative, and ethically responsible ways to continuously elevate the customer experience.
Have you seen a unique use of data recently? Share it with Dan! You can email him directly at firstname.lastname@example.org.