Does Your Big Data Strategy Need a Reality Check?

How can financial institutions cut through the noise and hype of big data? How do new roles like the Chief Customer Officer and Chief Data Officer change the game? This interview, conducted by the Chief Data Officer Summit, explores how banks and credit unions can effectively utilize data to improve the customer experience.

CDO: How has the data revolution impacted marketing analytics?

JM: The ‘data revolution’ is an interesting concept because we’ve been working with data in the financial services industry for decades. At the beginning of my career, financial marketers were talking about customer relationship management and were implementing the first real CRM data systems. I think the biggest challenge in financial services, and in any industry, is that you often have the ability to manage data in advance of being able to use that data.

Data officers and people in the data industry continue to say they want more data and data sources, they want to do more analytics, and they want to use the data they have more. But in reality, the technological capabilities have preceded the ability to apply the learnings and the ability to capture data and produce reports has preceded effective utilization.

“The question we need to ask ourselves is whether big data has potentially become a big distraction?”

So, I think the biggest challenge has been that the technology gives organizations more than most organizations can effectively use. We often get caught up in what we can do without really remembering what we should do. The question becomes, is big data becoming a big distraction?

The revolution of data and analytics and structured and unstructured data is a great topic, but I think we get caught up in the discussion of being able to do things and forget about the ultimate benefits from the consumer perspective.

For example, in the financial services industry, we probably have as much data as any industry, yet we find that more than 50% of consumers say they’ve been contacted by their financial institution incorrectly by offering them something they already have or incorrectly addressing them. The result is that this negatively impacts the consumer experience.

If the data we have at our fingertips is not utilized well, possibly we need to look in the rear view mirror and say what should I go back and rework?

CDO: What would be your top tip for moving beyond the big data hype?

JM: As far as utilization or what you do with big data overall, I think in the financial services industry and a lot of other verticals, the first use of big data is with risk management. Big data allows firms to learn about customers to avoid risk. That can be in the pharmaceutical industry, it can be in the healthcare industry, it can be in the financial services industry.

Secondly, and it seems rudimentary, data should be used to correctly address, communicate and provide offers to consumers based on their demographics, their psychographics, their purchase behavior and even their location. Mobile data will provide organizations immense insights into behavior that have never been uncovered before. Financial institutions and other organizations can now also reach customers on their mobile devices, which when done well, can be highly effective.

“The biggest hurdle to moving beyond the big data hype is that most organizations’ data tends to reside in silos.”

Finally, big data can help organizations improve earnings. By looking at different data points and interactions of the data, firms can build more efficient systems and more effective systems, increasing the ability to both increase revenue and reduce costs. Data, when used effectively, can impact both share of wallet and also efficiency.

The biggest hurdle to moving beyond the big data hype is that most organizations’ data tends to reside in silos, and as a result, we utilize data in these silos. When different components of available data are not working synergistically to give you the best answer or resolution, the customer experience is impacted. Today’s customer lacks tolerance when you don’t understand (and recognize) their entire relationship. This gets back to the basics of data management that need to be addressed before we pull back the curtain to the world of big data.

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CDO: Why do you think we’ve seen a rise in the chief data officer role and what impact do you think this role is having on organizations internally?

JM: I think you’re not just seeing a rise in chief data officer, but you’re seeing a rise in chief customer officer and customer experience officer roles that rely on the capabilities of the chief data officer. Again, the important thing to remember is that data is only valuable if it positively impacts both internal and external customers.

For instance, at the best organizations, you now are seeing marketers that are having a much closer relationship with the CIO and chief data officer because customer insight allows them to be more effective in their role. The same is true for product managers, operations managers, channel managers, etc. In some cases, the CDO or CIO help these managers take on some of the data roles themselves.

“Today’s data professionals are at the center of an organization’s ability to generate revenue, reduce costs, improve operational efficiency and enhance the customer experience.”

You can’t be out there communicating to customers, doing product development or changing distributions systems without a clear understanding of where data and insight come into play. The technology of being able to capture and use data today is extraordinary. You have traditional data sources as well as transactional, behavioral, mobile and social media data that can impact results.

In the finance services industry, the information that used to be part of the physical application process isn’t enough to provide the risk management you need to protect against fraud in today’s world. You really need to go outside the normal realm of data to find out more about the consumer from outside sources … to find out what they’re doing socially … to find out what they’re doing from a mobile and transactional perspective.

While the scope of this data can be frightening to some, it helps protect companies against what before was invisible, even with the help of credit checks. This depth of data also enhances the customer experience by providing a better understanding of customer needs and ensuring that you’re going to be addressing the right customer, with the right offer, at the right time. leveraging the right channel.

One of the interesting dynamics today is that the consumer is often ahead of the chief data officer’s ability to deliver because the consumer knows what can be done. The bar is set extraordinarily high, many times being set by the retailing industry. The use of data by both online and store-based retail is usually very effective. I believe it is inexcusable that a local store owner or a retailer should know more about me than my financial institution, insurance company or my healthcare company … especially since I have given significantly more information to these larger organizations.

It usually gets down to remembering who at the end of the day is the person who is going to judge whether or not you’ve done a good job … that’s the consumer.

CDO: How do you utilize big data to drive online and print marketing?

JM: We can’t get enough of data today from a marketing perspective because we’re always trying to eliminate ‘marketing waste’. The waste represents the 95 to 99% of the times we connect with the customer when they are not ready to take action. More (better) data gives the marketer the ability to limit the amount of times they communicate to the customer at the wrong time, about the wrong product using the wrong channel.

One exciting use of data is when a firm leverages insight for digital retargeting. Retargeting is basically the ability to reconnect with a consumer who has shown an interest to buy and we reach them again in another (or the same) channel to reengage. By retargeting, you’re studying the ‘digital footprint’ of the consumer to see what they have searched for and where, and then try to reach them again with your offer before they make a purchase.

“Digital retargeting is one of the most powerful ways marketing can leverage internal and external data sources for improved marketing effectiveness.”

With retargeting, a firm can follow-up on a postal mailing on your computer or even on your mobile device thanks to the data available. At the end of the day, the only way you’re going to make a sale is to get into the customer’s buying cycle at the right time with the right information and, most importantly with the right channel.

With retargeting, a marketer has the ability to use multiple digital and offline channels to reach customers more effectively than ever before. While not a perfect process, it allows the marketer to reach a prospect or customer with a good offer at the right time.

Most consumers understand that targeting by marketers isn’t perfect. The Holy Grail is when you can connect one-to-one with a person, showing that we working on their behalf, are friendly, and we can provide an appropriate value proposition by really understanding them. Understanding their needs, understanding their desires, understanding what they wanted to purchase. This includes potentially knowing your customer’s needs before your customer does.

In essence what we’re trying to do is trying to replicate the one-to-one sales experience through the different data sources we have. We’re trying to think on behalf of the customer and trying not to push something that isn’t best. We want to show that we know the customer, understand the customer and are willing to reward the customer for their patronage based on the hoards of data we have available.

What’s important with the customer experience is not just the data itself, but does the message improve the customer experience and how they select who to give their business to?

CDO: Why is it important for you to share your thoughts with those in the data industry?

“The power of data is not in how much we can collect, but in how we can use the insight to enhance the customer’s experience and potentially improve their lives.”

JM: We sometimes get caught up in the buzz of the marketplace. We get caught up in what can be done as opposed to what should be done. What I try to convey when I’m meeting with data professionals is that, while I may be a futurist, I am also a pragmatist. In traveling globally and meeting with financial organizations of all sizes, we need to understand that the future is in doing the basics right with an eye on what can be done.

It is important for marketers, financial institution executives and data professionals from all industries to eliminate some of the myths that are out there that say that data, by itself, is great. What can be great is how we can use data to alter internal and external customer experiences and to improve people’s lives. But, the key is to work starting from the basics and to avoid big data becoming a big distraction.

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