Category Archives: Data

Big Data: How are you using it?

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How are Organisations using Big Data?The amount of data in the business world has been rapidly growing over the past few years particularly with the development of technology. This data is often collectively and commonly termed ‘Big Data’. When used effectively, it has the potential to become the next frontier for innovation, operational excellence, competition and profit.

Undoubtedly the explosion in the volume of data organisations are capturing about their customers, suppliers, employees, operations and competitors, both directly and indirectly, can generate tremendous insight.  In their 2011 study the McKinsey Global Institute identified potential benefits of this insight across many sectors; from billions of dollars per annum benefits for health care and public sector administrations and increases of up to 60% in operating margins for retailers.  Furthermore, in today’s consumer driven environment, business decisions can no longer be based on what has previously been successful. With the shift in power towards the consumer, there is now a requirement for highly personalised services, recommendations and communication.  Consumers want to receive the right message at the right time through the right channel. If organisations fail utilise their data effectively to surpass these customer expectations, their competitors will leave them behind.

Despite this, a recent study conducted on behalf of Total System Services Inc. (TSYS) has shown that over 30% of organisations are not utilising their data to drive business decisions.  With evidence suggesting that utilising customer data effectively can lead to improved customer relations, customer loyalty and advocacy – why would organisations choose to ignore this important resource?

The issue may stem from the organisational culture – perhaps there is not a customer centric culture, or the decision makers do not understand the value of customer data? Some organisations may argue that they are not equipped to deal with customer data or changes that may stem from customer insight. Or do organisations believe that in simply gathering ‘big data’ they are doing enough?

Me and My Network: Exploring Customer Lifetime Value

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Exploring Customer Lifetime Value and customer networkWhen I was at university, we were taught that the customer lifetime value (CLV) can make or break a company.  And to a certain extent I believe this to be true.  If Jim regularly spends more in a shop than Jane, over a period of time his value will be higher.  But are there any circumstances in which Jane becomes more valuable than Jim? Let’s explore the concept of Customer Lifetime Network Value….

Jim spends £400 on a television, and on average purchases one every 2 years.  Jane only spends £200 on a television, purchasing every 4 years.  In the space of 20 years, Jim spends £4000 with the company, yet Jane only spends £1000.  Jim has a higher CLV than Jane.

But what happens when Jane tells 10 people of her shopping experience? Over the course of the 20 years, that may bring in a further £10,000 (£1000 per person, if they spend in the same way as Jane).  Jim on the other hand, tells only 1 person, who spends a further £4000 in 20 years.  Let’s revaluate. Jim’s CLV (including his network) is now at £8000, while Jane’s has reached £11,000. Jane now has the greater value.

In other words, a customer’s network can make a great deal of difference.  But are companies taking this seriously? Do they understand the value that word-of-mouth like this can have on their business? They may not have 10 years ago, when Jane’s network of 10 may have consisted of close friends or family, all of whom may not have been likely to spend in the same way. But now they may be strangers, reading her review of the product online, with the full intent to purchase. After all, more people are using TripAdvisor now than ever before. So can we afford to ignore the Customer Lifetime Network Value? Or perhaps more importantly, can businesses afford to ignore it?

Social Influence and Customer Service

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A recent Forbes article outlined the plans of how a major customer service solutions provider now integrates Klout (a social media influence measurement metric) into their social customer contact solutions. This comes after a lot of debate around Klout, created by a San Francisco based company of the same name, which measures a user or brand’s ‘social influence’ across social networks like Twitter and Facebook. Klout does this by calculating an overall Klout Score by assessing a user’s presence on social channels, their followers, activity and the popularity of their content. There are other applications that measure social influence, Kred and PeerIndex among them, but Klout is the one that seems to be the most widely accepted.

The entire industry still is in the learning stages when it comes to the use of social media, and while tools like Klout do give us an understanding of how much we influence people with our social media activity, there still exist widespread concerns about the method in which this is done, and how relevant it is to each company. Another Percepta Blogger, Lindsay, previously wrote about the Net Promoter Scoring (NPS) system and its application and effectiveness on social media channels and how relevant it is for companies to use this metric to measure their customer service on social channels. With Klout and NPS 2.0 among the plethora of tools and applications available to analyse your company’s social media presence, a company needs to understand what exactly they’d like to measure, what actually impacts their business and aligns to company goals. This goes right back to your social media strategy – where does social media sit in your business strategy and what do you aim to achieve from it? This is by no means fixed, it will keep evolving as the medium and your company grows, but we know for certain you need to have a vision which these tools, if used correctly, will help you achieve.

There are several ways of looking at the effectiveness of social influence, Klout and NPS on social media customer service. Do you use them for your business and are they important? Let us know through your comments!

NPS and Social Media; Let the Numbers Do the Talking

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There’s no way to avoid it; a lot is being said about the Net Promoter Score (NPS), and it’s not all good.  While there are many who champion the single score metric as a reliable predictor of both customer loyalty and company growth, there are many out there who disagree.  And it was a discussion with a colleague that made me fall into the latter category.  She asked me the question – what about social media and NPS? It is clear that the relationship between the two could be a long and complex one, but for me it is simple. Social media provides a platform for both promoters and detractors, so to understand the potential growth of your business, you must begin to understand the numbers behind this single-question score.

The NPS will split your customers into three categories; promoters (those who would actively recommend your product or service), detractors (those who would not recommend you) and passives (those who fall somewhere in between), and provide you with a single score – your promoters minus your detractors.  And it is this score which is presented to those at the top level of the business, as an indicator of performance and growth potential.  But it doesn’t indicate how many promoters and detractors you actually have.  It is only when you look at some social media numbers that its impact on NPS becomes clear.

53% of consumers say they have recommended a company on Twitter. An impressive figure when you consider that there are approximately 100 million Twitter users in the world (almost 10 million in the UK alone). This means that potentially half of the worlds Twitter users could be recommending your company online at any one time.  Furthermore, the average Twitter user has 150 followers, which means that for every one recommendation, the message is spread to at least 150 people.  And if Lady Gaga, who has 24.5million followers, starts recommending you, then you know you’re onto a winner!

So what do these numbers mean for NPS?  As the number of Twitter users grows (it is expected to reach 300 million by the end of the year), the potential for promoters to spread a positive message is endless.  But the same can also be true for the detractor, who may choose to complain about the product or service they receive through the channel. This ultimately means that half the worlds Twitter users could be spreading negative messages about you at any one time. This in mind, it would prove beneficial for those at the head of the business to understand fully just how many promoters and detractors they actually have (rather than the calculated NPS).

Will social media eventually change the way in which we present NPS? As the number of user’s increases, will businesses remain content with knowing just one figure, or will they need more? Any thoughts would be welcome.

Steven Spielberg’s Next Movie: “ The Data Black Hole”

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“Just because you have not seen something does not mean it doesn’t exist”.  I remember my mum saying this to me as a child.  In those days it usually referred to fairies or in even more serious conversations – God.    Well I’ve taken this term and applied it to more recent events around the world of data and, in particular, the black hole that all the data I send to companies seems to disappear into.

As I say I have not seen this black hole, maybe it’s in a cloud somewhere (ha ha), but it must exist.  The reason I’ve come to this conclusion is that I have, over the years, filled in surveys, attended forums, spoken to sales and customer service people…the list is endless.  I provided these companies with my thoughts on the experiences I’ve had; always willing to state my views on things but I can’t remember anyone who has sent me any feedback following my input.  Did they take any notice or was the data just sucked up into the “The data blackhole”?

A colleague of mine recently wrote a blog on the subject entitled “What do you do with your customer feedback”  which generated a number of comments from people who have worked on customer feedback programmes where they gave examples of where things have been changed due to the feedback that had been received.  I couldn’t find many that referred to feedback, back to the customer.  So I wanted to check.  How many experiences have you had, as a customer, where companies have said “Thanks, we could not have done it without you” or  “Because of you, we have been able to improve the service we give”?

What do you do with your Customer Feedback?

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It might seem obvious to most people that if you spend time, effort and money collecting something then you will want to do something with it. Take my father in law, Brian, for example. He collects old bicycle parts. Specifically, rare bicycle parts from the 1920’s. He really knows his stuff, loves the bikes he builds and is seen as a bit of an authority on the subject. He also makes a fair bit of money from it. Last week he sold a pair of handlebar grips for £250 that he paid £10 for. For Brian, his collecting rewards him with a sense of pleasure, an enviable knowledge on the subject and a tangible financial return. Lucky old Brian.

So why would you collect something, and go to great efforts to gain what you are collecting, only to do nothing with it? It might seem mad, but it appears there are many commercial organisations in the UK that are doing just that. The thing they are collecting is customer feedback (either on a small or grand scale) and then coming up with a Customer Satisfaction or Net Promoter score. They take this score into the boardroom, discuss it amongst themselves, either pat themselves on the back or point fingers at each other, and then put the scores in a drawer. Very odd. Thankfully, there are some companies that use their customer feedback to drive continuous improvement through their business by focusing on how they can give their customers a better experience. These companies invariably benefit from an increase in turnover and profit, a reduction in operating costs and create customers that spend more, stay loyal and recommend them to others. Which is what we’re all trying to achieve in business, isn’t it?

I was interested to find out what people’s views were on this matter, and what they did with their   Customer Feedback, so I posted a discussion on LinkedIn. The comments are posted below and it makes for fascinating reading. However, here is a short summary of the key points from organisations that seem to be getting it right:

  • Equally involve your customers and your employees in the experience improvement process and incentivise their buy-in from the top down.
  • React to negative feedback swiftly, and on an individual basis, to influence those customers back into passives or, best of all, advocates.
  • Make a big deal about customer compliments, especially regarding individual employees. Build customer centric targets and objectives into every employees job role.
  • Remember, ‘satisfied’ customers will only stay satisfied until something better comes along…invariably a competitor. You need to aim for ‘delighted’ customers.
  • Make small changes and check customer feedback to evaluate the impact. Sometimes, the smallest improvement can have the biggest positive effect on the customer.
  • Only by analyzing verbatim customer feedback can you gain true insight into what really matters to customers. ‘Yes’ ‘No’ answers only scratch the surface.
  • Ensure your marketing and brand promise is delivering against your service delivery experience. If it isn’t, you’re heading for an increase in dissatisfied (ex) customers.
  • Always look at your business from the outside in (the customer view). Your view is not real and is rarely, if ever, seen by the customer.
  • If you don’t do anything to improve customer experience after you’ve gained feedback you might as well stop doing it and spend the money on a nice holiday…while you still have some customers.

The Miss-Information Superhighway

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Is it just me (quite possibly) or is everyone being swamped by the information superhighway these days? The internet, smart phones, tablet computers, a couple of old tin cans and a piece of string… all seduce us further and further into the world-wide-web where all of our questions can be answered and all of our dreams will come true (okay, I just made that last bit up but I live in hope).

As a person interested in the ‘inform’ part of the information superhighway I often wonder just how much we are being informed, how much time we waste in trying to get that information and how often are we being misinformed. It seems to me that what we really, really need (and sooner rather than later) is a bit of good old fashioned housekeeping and a wee bit more honesty about where our information comes from and how accurate / reliable and, as importantly, original it really is. In the old days (remember them?) information was stored in books and journals. These were often the result of a single author or in the case of academia potentially a number of authors (with antecedents carefully cited in the bibliography). Single authors had / have the benefit of editors and publishers to vet their work. Academia had / has the discipline of peer review to keep things in check.

Today however, (in the ‘bad new’ days) anyone can put whatever they like on the internet and a) claim it to be their own work, b) claim it to be true, c) post without peer review. A recent example of this has been the now notorious “Gay Girl in Damascus” blog (bizarrely revealed to be a US man living in Edinburgh and studying at a Scottish University). His / Her blog even raised the eyebrows of the US government and was, as many blogs are, increasingly followed by journalists and activists around the globe. The cracks began to appear when a photograph, purporting to be the blogger was publicly revealed (on BBC’s NewsNight) to be that of a woman living in London whose social media ‘snap’ was re-used without her knowledge – putting not only her but her family and friends in potential harm’s way. So, this stuff really does matter!

What does this mean for internet users who increasingly use it as their reference library? Who do they trust and how can they validate that trust? I wish I knew the answer to that one… but I have an idea that might be worthy of a moment or two’s consideration…

It’s a bit geeky but… bear with me… How’s about this as a starter for ten? You’ve heard of an IQ (Intelligence Quotient)… How about a DQ (Darwin Quotient) for everything on the world-wide-web? A way of tracing the origin of the species of an idea… How would it work? Everything placed on the information superhighway would be time and date stamped (as most of it already is) and geo-tagged. It surely can’t be beyond the realms of the possible (for a race of beings that put a man on the moon in 1969 – allegedly) to invent a way of watermarking everything that is created online. A DQ of 1 would indicate an original posting. A DQ of less than 1 would be indicating how far away the post was from being original. By that I mean the ratio of other’s content to original content.

By way of example, how often have you gone onto a product review site and read exactly the same product review elsewhere (and wasted your time)? In the olden days of the early internet, attribution was done by posting a link to the source material – admittedly for the very practical reasons of not having the space to re-quote fully. Nowadays, more often than not, stuff is just lazily cut and paste into a blog, website or whatever without acknowledgement. A long time ago and far away this would have been called plagiarism. It is the bane of schoolteachers and lecturers everywhere who don’t want their students just cribbing ideas, fully formed, from the web. There are even websites that help them out by calculating the probability that a student’s text could have been copied from the web – using search engine technology. For the really geeky or mathematical amongst you there is a ‘simple’ formula that does likewise, http://www.plagiarismchecker.com/copying-from-internet.php.

Even the mighty Google might be encouraged to seek out DQ1 material and place it higher on its search engine and thereby increase its credibility. If users saw this as valuable (and let’s be honest what price an original idea?), then I’m sure they’ll find a way of monetizing it.

Questions, Questions, Questions…

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It seems that everywhere we go businesses want to ask us questions. Retailers including Boots, Sainsbury and Co-op display questions on their chip & pin terminals asking things like – Did I know I can pay bills in store? Was the queue time acceptable? Was the store clean and tidy? Would I buy a TV from them if they started selling them?

Voice of Customer is big again and accessible through channels that weren’t available before. Who thought we would be answering questions on terminals while waiting for our shopping to be packed?!

But what happens to the data?

Voice of Customer has been around for a while and if you want a truly customer centric business it always should be. Business Intelligence and Customer Insight appear to be making a resurgence…not simply asking the questions but knowing what to do with the information collected.
At what point does the voice of your customers become loud enough to make a change? This can be dependent on a variety of business factors; financial investment available, appetite to change, financial returns and current business strategy.
BBC’s Wonders of the Universe, for example, received over 100 complaints for the soundtrack being too loud which prompted the BBC to re-edit the remaining episodes. Is this good customer service or not? Considering 3.6 million viewers watch the programme…that’s only 0.003% of the viewing population who complained!

Thousands of people complain about mobile phone contract terms and conditions and over a million people marched against a war but their voices don’t seem to be heard. Mary Portas’ Secret Shopper series showedt that company owners aren’t willing to look in the mirror and recognise their own flaws. By recognising Voice of Customer as constructive criticism companies are given an opportunity to take action and flourish. Alternatively it can be a great way to collect real-time positive feedback.

Do businesses really want to listen to their customers? Or are they only listening to those that match their agenda?

Measure anything that moves…

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… and if it doesn’t move? Measure it until it does!

Statistics are all around us and I got to thinking, how much do we depend on analysis and are there times where they are just not worth paying attention to?

Before I continue, and at risk of a contract being taken out on my head by an axe wielding numberjack, I do think that some of the data analytics that are performed by our own Business Intelligence department (who have the coolest department name in our company) not only add value to our service delivery but they also help our clients understand their business better than they ever have before thus giving them the ability to perform better than they have ever dreamt of. From my point of view this type of reporting and analysis is very valuable and I rely on good data to make relevant decisions in the workplace all the time.

In the workplace we can use statistics & analysis to help us understand specific trends, patterns, cycles, behaviours etc. Where statistics start to lose credibility for me is when they are presented with a specific bias in mind. I recall the itv news at ten showing, with the same snappy graphics as they use for their ‘Happiness Index’, the shift in voter faith in the coalition government and other related questions. The part that struck me wasn’t the message that they were driving home; it was the percentage of people who had answered “I don’t know”. On some questions this category made up almost half of the responses but clearly it didn’t hit home a hard message that indifference rules, instead they opted to focus on something that would either create a skewed positive or negative message to make it news worthy.

In the recent Oldham East & Saddleworth by-election each political party relied heavily on trends and past statistics to get their excuses in early. On the lead up to the election each party had already peddled their statistic driven reasons for potential failure either by referring to tactical voting or previous outcomes where the sitting party ‘never wins’.

This also happens in televised sport, in the pre-match build up a barrage of statistics will be shown of past form in previous encounters. Often these mean nothing but at best it gives the pundit something other than idle banter (or sexist comments allegedly from Andy Gray & Richard Keys) in the low points of the game.

I have already had a pop at the media in another blog posting so, in an attempt to provide other examples, I will move to advertising. If you haven’t done so already, the next time you see an advert for a new shampoo or cosmetics line coming on the television or in a magazine or newspaper, take a look at the small print which will tell you the actual percentage of the people that agreed with the fact that the shampoo is the best around. More importantly it will also refer to the sample size. In some cases I would be better asking my extended family for their opinions…at least I could trust them to tell me the truth and I would have more respondents. Granted, a positive response from the general public to a survey can offer backup to the claims being made but when the advert on the TV for shampoo sees the model with hair extensions, really how much faith do they  have in their product?

As we move more and more towards social media as a driving force for public opinion I often wonder whether the rating that something has received has been a push-up by the creator/owner/business and often I am left still making up my own mind…

I would really like to hear your opinions on this topic. Do you trust and rely on statistics in your professional and personal life in the same way? Or do you think that a statistician is just a person who draws a mathematically precise line from an unwarranted assumption to a foregone conclusion?

Answers on a correlation diagram please.

Working with Customer Satisfaction Survey data…

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Many companies use Customer Satisfaction surveys as a means to gather feedback on various aspects of their business, whether it be employee performance, the customer’s viewpoint of the processes employed, pricing, product quality or loyalty. Understanding the Voice-of-Customer (VoC) has very self-evident benefits and can be used effectively as a learning and continuous improvement tool.

Having worked with the Customer Satisfaction Survey as both an external and internal tool for the best part of a decade, the following considerations I believe are key to maximizing their potential:

Don’t just focus on the bottom line!

Knowing that the needle has moved for the overall metric will likely still tell you little about HOW this has happened? Understanding the drivers of the metric is crucial. Several statistical techniques can be employed to this end and a good starting point is a correlation matrix, multi-linear (or binary logistic) regression of the data. In this way, you will be able to have a handle on what drives the variability in your overall metric and allow you to focus efforts on identifying and managing the drivers of performance.

Use the Verbatim!

If you decide to leave the opportunity for free text, it is only right that a process is in place to utilise the information therein. It does take longer to analyse, but reading and/or coding the Verbatim is ultimately very worthwhile. The customer has taken the time to complete this and therefore you have a responsibility to understand what is being said – this can prove a very rich seam of information to be mined and often gives a clearer insight into what the customers are passionate about or more information on the nature of their complaint or compliment. There is also a corporate responsibility to feedback internally on this, and where possible, address any unmet customer needs that have arisen.

Don’t knee jerk if performance fluctuates…

Again, some understanding of statistics helps here, but it is important to understand the Confidence Levels and the Margin of Errors with your sample data. Understanding what constitutes a statistically significant performance improvement (or degradation) helps –that way there is no euphoria or full-scale enquiry when the numbers shift but are likely simply explained by the vagaries of the sampling process.

Align internally (where possible)…

Customer Satisfaction surveys can become the heartbeat of your company if you align the goals accordingly. Being able to report on individual, team or departmental performance ensures greater accountability and manageability and there is a great opportunity for goal alignment. Using performance indices can also add value, being able to explain the contribution of individuals or departments towards the overall mean score. In this way, you are able to manage performance in bite-size chunks as opposed to mobilizing full-scale improvement initiatives when the numbers move. Should you have internal Quality Assurance processes for your employees, it is a pretty good idea to ensure that these are calibrated with your VoC where possible. Ultimately, there is some work to be done if your internal and external metrics are divergent..