Banking on data

Causata’s CEO Paul Phillips (left) moderated a panel at the BAI retail banking conference in Chicago last week.

Paul was joined (left to right) by:

Michael Wexler, Director of Digital Insights and Marketing Effectiveness at Citibank

Mike Olson, CEO at Cloudera

and Andrew Rosen, CMO at Bank of the West

The panel topic was “Winning and Losing with Customer Data in an Accelerating Digital World”. Michael and Andrew shared some illuminating stories about how important they see customer data and just how big an opportunity there is to impact their business and the customer experience. Paul and Mike gave their Silicon Valley thought leader take on where the technology is today and how companies should best take advantage of it. There was a clear consensus that the companies that embrace data will be the ones that win.

Determining the value of your data

John Lovett has a thoughtful post at Clickz.com summarizing many of the struggles enterprises are having with Big Data. One problem is enterprises often store as much data as possible, for as long as possible, fearing they’ll be discarding valuable information if they don’t. Enterprises struggle to understand which data-points are valuable and which ones aren’t. Lovett writes:

“Understanding what data matters to your business requires empathizing with business stakeholders, examining marketing programs, and getting to the mission-critical values of the organization. In my experience, I've found that simply asking business stakeholders what metrics or KPIs are most important to them is a futile endeavor.”

At Causata, we believe that the relative value of data should be determined by how it can be used to drive your business forward and help you achieve your goals. We begin by organizing all of the data around a customer. You should be able to see every interaction a customer has had with your company. Those interactions should be stored in time order, so you can see how events in the past, predict future behavior.

The next step is to understand your business goals. Most often these are centered on increasing profit either by selling more products and services or increasing customer satisfaction. Take reducing attrition. You’ll need to understand the behaviors that lead customers to terminate their relationship with your company. You may look at things like: How many products did a customer browse online in the past week? How many times has she called to register a complaint over the past month? When was the last time she visited a store location? Leverage as much of your data as possible, especially web and mobile data rich with customer intent. Now conduct an analysis to see how each of these behaviors is correlated with customers who end the relationship with your firm. In the process you’ve transformed your data into customer intelligence. This intelligence can be used to power campaigns to reach out to those customers most likely to attrite.

This is a tremendously valuable view of the data because it gives you the power to anticipate dissatisfied customers and reach out to them before they leave. In doing so, you’ll be able to significantly increase your business performance.

This can be extended to any business goal. In the end you’re left with thousands of data-points that express customer intent. This, in turn, can guide an assessment of the relative value of various data-points. More importantly, it can be used to help you really understand how customer behavior relates to your business performance.

A look at Causata

There's a good post about Causata by James Taylor on his blog Everything Decision Management.

Gareth

Management doesn’t value marketing

According to a study cited in this article over at Marketing Week, 73% of CEOs believe that marketers “lack business credibility because they fail to quantify the success of their campaigns”. It goes on further to state that: “marketers focus too much on the ‘arty and fluffy’ side of marketing and not enough on its business science”.

Putting a hard number on the value of a marketing campaign is an ongoing struggle for many marketers. It requires a complete view of the customer, something that marketers may not have access to. Imagine a marketing campaign for a bank that leverages banner advertising, call center and direct mail with the goal of increasing product holdings among existing customers. Management rightfully wants to understand the business value created through this campaign.

To begin to answer this question, you’ll need a complete view of the customer, both before and after the after the life of the campaign. This complete view includes all customer interactions along with all other customer attributes. What banners was the customer exposed to? How many did she click on? Was she targeted for with direct mail? How did she respond? What are her total account holdings before and after the campaign? And so on.

Without this view it’s almost impossible to understand the cause of changes in product holdings because you’ll only be analyzing part of the story. This leads to approximations that can be divorced from business reality. Marketers are often forced into approximations because some number is considered better than no number at all. But this can lead to a big problem: When marketers report numbers that fail to align with financial statements, distrust of marketing grows.

Developing a complete view of the customer is a necessary condition to truly understand the success or failure of marketing campaigns. Marketers are going to continue to have trouble understanding the value they’re creating without it. And without understanding the true value they’re creating, business credibility may continue to elude them.

A CMO's Most Important Task

The CMO Council’s report Renovate to Innovate: Building Performance-Driven Marketing Organizations (1) suggests that the most important task for CMOs is to drive their organizations to execute strategic, cross-functional campaigns:

“Most importantly, chief marketing executives have to revitalize marketing group cultures and mindsets. Narrowly focused, risk-averse managers in isolated silos of tactical execution (research, PR, advertising, events, marketing services and Web) must be integrated into cohesive, cross-functional campaign teams.”

Prior to integration of this sort, organizations must first understand the lifetime value of each customer regardless of how the customer chooses to interact with the organization. Only then can cross-functional teams can be organized around a common goal: maximizing lifetime customer value.

In the past I worked with a major retailer who failed to understand the drivers of lifetime customer value. A tension quickly emerged between the brand team, who viewed value creation on a long-term horizon, and the e-commerce team, who wanted to maximize in-session purchases. The question became: What metric should we optimize for?

Without an understanding of lifetime customer value, there is a significant risk in failure of cross-functional team alignment as each team clings to the metrics its used to. More importantly, there’s a real risk of creating teams that optimize the wrong metrics.

Understanding lifetime customer value requires organizations to:

1. Connect the data: Connect data from different channels organized around the customer.
2. Understand the data: Understand the key drivers of lifetime customer value. It’s just as crucial to understand how this changes over time.
3. Act on the data: Leverage all the data in any channel, ideally in real-time.

A common understanding of lifetime customer value will provide a solid foundation for these cross-functional marketing teams. Enterprises risk misalignment and suboptimal performance without it.
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1. http://www.cmocouncil.org/resources/forms/download-report/index.php?id=204

Podcast: "Real-time customer intelligence with Paul Phillips"

Causata CEO Paul Phillips was recently interviewed for Beyond Web Analytics by Adam Greco and Rudi Shumpert:

Join Adam and Rudi as they talk with Paul Phillips of Causata and real-time customer intelligence. Paul provides the team with insight on what exactly Causata is and the business problems that they are helping their clients solve. The conversation explores the real-time customer intelligence, pulling multi-channel data into a single source, and dives into what this means for companies of all sizes.

The full podcast is here.

New Causata whitepapers page

We've gathered together all the Causata whitepapers on a single page for easy access. In addition to the whitepaper entitled Web data integration: Build or Buy? two other technical whitepapers are available.

Causata Distributed Data

At Causata’s core is a data structure that captures every interaction between your business and your customers.

Causata Identity Association

Causata has an identity association layer that disambiguates customer identity information to maximize the use of data.