While Big Data helps companies understand the unique needs of individual customers, it is not the complete answer to customer loyalty. Chris Brahm, a partner with Bain's Advanced Analytics practice, discusses how the human element retains an essential role in a customer-centric culture.
Read the Bain Brief: What Big Data Means for Customer Loyalty
Read the transcript below.
CHRIS BRAHM: Big Data is incredibly important to the next generation of customer-loyalty innovations. But it is not the complete answer. Many of the fundamentals in providing great customer experience are unchanged in a world of Big Data. Where does Big Data help? Big Data helps in dealing with scale, the mass of customers, and the incredibly unique needs and experiences that each individual customer has had.
Data is required to enable you—whether it's a frontline worker or a web interface or an e-commerce site—to effectively deal with each customer. You have to have data to do that at scale, because each of our experiences, each of our needs, each of our wants, are unique. And for a company to deal with those in a highly personalized way, you need data at scale.
The airline that doesn't understand that you've been delayed three times, and has to send out a survey to try and understand that, is going to lose out to the airline that is constantly monitoring its systems and sees that a set of passengers had been horribly delayed, they understand that you're one of their more valuable passengers, and they send you an email immediately after, apologizing and offering a credit.
That is table stakes in the modern world in terms of how you provide great customer experience. Every step along the customer journey can be automated and instrumented to collect data and analytics to better understand your customers. But collecting data in and of itself doesn't really help.
And there are many, many organizations that have terabytes of data on their customers that aren't really using it in any purposeful way to enhance the customer experience. And here's the rub—that it's still all about people. Fundamentally, you have to have a customer-centric culture to really deliver great experiences.
Data can help with that, it can provide feedback to the front line, to management, on how the experience is working. But it's more important things around what you recognize in an organization, what you value in an organization, what you reward in an organization, that drives how people behave day-to-day and whether they fundamentally care about customer experiences.
Ironically, the enterprise software industry and SaaS companies, SaaS applications in particular, have very low customer-advocacy scores, and yet these are the most instrumented products, where literally every keystroke, every interaction point that a customer has with that product, they understand how it went.
And yet they have low customer-advocacy scores. This is a human issue, not an advanced-analytics issue. So, Big Data is an incredibly important element of future innovation in customer experience. But it is just one element. And all the fundamentals still apply. You need a customer-centric culture. You need the human aspect of wanting to provide great experience to the customers you're serving in order to make any progress here. Big Data is no substitute for that.
Big Data without that doesn't work, in fact. So, you need it, but it's just one element of a great customer experience in the future.