Real time customer analytics can improve bottom line but most brands still falling short says study
With the convergence of digital technologies, such as artificial intelligence (AI) and the internet of things (IoT), opportunities for brands are surging to use advanced analytics to learn – and deliver on – what their customers expect in any given moment and place.
A new study, conducted by Harvard Business Review Analytic Services and sponsored by SAS, Intel and Accenture Applied Intelligence, reports that companies using customer analytics are already achieving notable gains. Yet most believe themselves to be a far cry from effectively servicing their customers in real time.
According to the report, “Real-Time Analytics: The Key to Unlocking Customer Insights & Driving the Customer Experience,” 44 percent of respondents noted a “significant increase” in both growth and revenue generation as a result from their customer analytics efforts; 58 percent reported significant improvements in customer retention and loyalty. But only a surprisingly low number – 16 percent – considered their brands “very effective” at delivering real-time interactions across various channels, with 30 percent indicating they were “not effective at all.”
This raises red flags as the clear majority (60 percent) of business leaders surveyed believe the ability to deliver real-time customer interactions is “extremely important” today, and an even larger portion (79 percent) said it will be within two years.
“Real-time customer analytics are a strategic priority – now and in the future,” said said Alex Clemente, Managing Director, Harvard Business Review Analytic Services. “The study shows that early adopters are already reaping tremendous benefits on the engagement and revenue front. That said, there are still significant obstacles to overcome. Strategic alignment and a willingness to constantly retune analytical methods are critical to those most successful in creating personalised customer experiences at scale.”
Building an analytics program capable of achieving real-time customer engagement has proven to be a roadblock for many organisations. Just one in ten respondents (11 percent) indicated that they have has a solution in place that enables this kind of customer interaction. Common barriers to entry are lack of infrastructure to access customer data, an organisation’s culture, and the right technology, according to the study report.
“Operationalising real-time customer analytics will require enterprises to modernise their data infrastructure. Data silos and lack of a well-defined data strategy continues to be an impediment for many,” said Maneeza Malik, global analytics and AI manager at Intel.
Despite the challenges, organisations like H&R Block and Telefónica Chile understand that each touch point with a customer matters. Both companies are continuing to grow their real-time offerings in complexity and customisation, and are seeing results. “Real time adds value,” said Mike Weger, manager of direct marketing and corporate analytics at H&R Block in the report. “It’s not just about driving profits, but also increasing satisfaction, which leads to customer retention and ultimately better profitability.”
Who is responsible for customer experience? Survey indicates CMOs cook, CIOs shop for the groceries
To overcome the challenges inherent in becoming a real-time organisation, transformation must start at the top and be a company-wide effort. As the survey results underlined, there are often multiple executive roles involved in the various pieces of customer experience strategy. For example, when asked who owns the organisation’s overall customer experience strategy, 36 percent of respondents said the CMO and 25 percent said the CEO. But the responsibility shifted when asked who owns for the supporting: CIO (30 percent), CTO (23 percent), CMO (12 percent), and CEO (6 percent).
“To differentiate their brands and deliver on customer needs, successful brands have a customer experience management strategy, at the heart of which is predictive analytics,” says Tiffany Carpenter, Head of Customer Intelligence, SAS UK & Ireland. “Then issue becomes less about who owns customer experience, but how the entire C-suite executes on it. When CMOs, CIOs and other C-level execs unify customer data and apply smart, robust analytics, they will inform marketing activities, uncover new opportunities, and even influence the business well beyond marketing.”
Clearly, executive alignment in the organisation is critical. Of those respondents who rated their real-time customer analytics efforts very effective, 64 percent indicated that their stakeholders are well aligned.
“Customers expect super-relevance, localisation and tailored offers that fit their needs and preferences”, said Dr. Athina Kanioura, chief data scientist, Accenture Applied Intelligence. “Successful brands deliver on customer expectation by building hyper-personalised, real-team customer experiences on three capabilities: a unified customer data platform, prescriptive analytics powered by machine learning, and contextual interactions across digital and physical touchpoints. Real-time customer analytics is the platform that enable these strategies at scale.”
Other key findings include:
- Just over half (51 percent) of those surveyed say their use of real-time customer analytics has provided them with a significantly better understanding of, and strengthened, the customer journey.
- Many organisations shared the tangible impact of customer analytics on their bottom lines. Nearly half (49 percent) stated significant revenue growth as a result of their efforts; 44 percent noted an impact on both growth and revenue generation.
- Nearly three-quarters (70 percent) of survey respondents say they’ve increased their spending on real-time customer analytics solutions over the past year.
- Eighty-three percent stress the importance of an organisation’s ability to translate data into actionable insight at the optimal time; only 22 percent of business leaders say they are successful in this.