Brett King

Posts Tagged ‘analytics’

What is in a Twitter name? That which we call a customer…

In Customer Experience, Retail Banking, Social Networking, Strategy on August 13, 2010 at 02:10

Apologies to Shakespeare for the modified Romeo and Juliet reference, but the question is valid – what is in the ‘name’ of a customer these days? I’m on Twitter, I’m on Facebook, I have various other profiles online on sites like LinkedIn, etc but none of this information appears relevant to most of the service organizations I interacted with daily. But if this identifies who I am – why is that no one asks me for my Twitter name in customer interactions these days?

Why is it that today that there are many banks who won’t let me open an account unless I have a home telephone number (a landline) – which quite frankly I haven’t used for a number of years now (in fact I don’t even know my home phone number) – and yet in respect to mechanisms which I use a whole lot more frequently than a home telephone number for communication, namely FB and Twitter, they completely ignore me? I have to say these days I’d probably be a whole lot more likely to talk about my bank on Twitter, than I would wait for their call on my home telephone number, which I don’t use.

Customer profiles are out of touch

Understanding customer behavior and how we are ‘tribally’ connected to our peers in the social networking landscape is a pretty fundamental requirement for service organizations these days if they want to influence brand perception. At a minimum, a bank should be ready to respond to me via Twitter, Facebook, Mobile or similar mediums, but in respect to traditional customer profile information like my home telephone number, my home address (which is increasingly irrelevant to my bank relationship), my employer’s telephone number, and such – this type of data is practically useless from a behavioral or service enablement perspective these days.

Your customer profile today is about two things for a bank, namely KYC and Segmentation. KYC is a industry compliance term which refers to “Know Your Customer” – it is seen as the basic information or data set that a bank needs to know to assess your risk profile as far as likelihood of issues around AML (Anti-Money Laundering), etc as is required generally as part of a process by regulators for new customers. On the segmentation front, the classic method of segmentation these days is still based around demographics such as age, salary, where I live, how many kids I have, etc and informs classic marketing campaign development.

Increasingly both of these outcomes are out of touch with the reality of the digitally enabled customer. I am here to tell you that despite all the KYC information my bank has captured about me, that in respect to my risk on a financial basis this data is almost certainly irrelevant. Far more important for them would be information on where I am travelling to, which partner ATM machines I use when I travel, how I conduct cross-border transactions, who is having access to my basic information that could threaten the safety of my identity, and how I manage my finances on a daily basis. The fact is, I’ve never been asked about any of this stuff, which is far more informative to my transactional risk profile than what my monthly salary and deposit patterns are.

Bank's often talk about customer knowledge as a differentiator...

The role our digital footprint plays

The key information for a bank moving forward is not demographic data, it’s not about where I live or what my home phone number is, it is about what I do…

In that respect, the data trail I leave for banks is extremely informative. The interactions I have with the bank are likewise hugely instructive from a future service and risk perspective. For example, my bank has data on which retailers I like to shop at, which airlines I travel, the cars I drive, the laptop I own, the mobile devices I utilize, the properties I own, the property I live in, and a bunch of other extremely useful information in respect to offers they could present me with. However, this data is just never used.

I get credit card usage offers from retailers I never frequent – why doesn’t the cards team send me offers for retailers where I’ve shopped before? I get offered personal loans and increased credit card limits when I don’t need them – when I might be interested these offers are nowhere to be seen. I get offered opportunities for new credit cards for airline loyalty programs that I’m not affiliated with – why can’t they work out which airlines I use and proactively offer to transfer my credit card points to my airline program?

Recently the team at Abu Dhabi Commercial Bank in the United Arab Emirates were looking at ways they could improve the suitability of offers for card usage for customers. There were suggestions around using location-based messaging technology through telecommunication providers to target you when you were at various shopping malls around the Emirates, but the Telco network operators proved to be light on this capability. So ADCB looked at behaviors – how did customers behave when they went shopping?

Behavioral analysis suggested that a customer who went to a mall was almost always certain to do one of two things. Initially go to an ATM machine upon arrival and pull out cash, or alternatively use their credit card to make a purchase. So ADCB worked out they didn’t need the mobile operators to work out WHERE customers where, they only needed to look at live transaction data for location triggers. So now ADCB can provide you with a time sensitive, location sensitive offer based on your behavior and can simply send it to you via SMS. Far more constructive than flooding me with broadcast messages that are more miss than hit.

Conclusion

Today banks don’t know me. The data they choose to use in respect to my profile is largely irrelevant. The data they have on me and could have utilize in respect to my behavior is much more relevant to how I’ll interact with the bank in the future.

So if you are a bank – do you know my Twitter name, have you friended me on Facebook? Do you know my mobile number and what type of phone I use? Are you matching offers for services and products to me based on what I’ve done or am likely to do? If I talk about you on Twitter, would you know that I’m a customer and could you engage me on this issue next time I call the call centre? If not – you really don’t know me at all.

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Evolutionary marketing – Tribal, viral and mobile (Huff Post)

In Media, Mobile Banking, Retail Banking, Social Networking, Technology Innovation on March 26, 2010 at 15:08

See the original Huffpost entry here…

There is a lot of discussion about how social media will play out from a mobile perspective, and how marketers in particular can monetize and leverage social media for real revenues and brand influence in the future. There are those, such as Umair Haque from Harvard Business Review Blog, that believe social media in its current form is a bubble with very little in the way of real income – in effect creating relationships that are not as robust as others would have you believe.

As we start to see massive adoption of smart or App phone handsets, the promise of potential migration of social media onto these platforms are hailed as the real future of 2.0 with endless possibilities. When we throw Augmented Reality and Geo-Tagging into the mix, those who are pro social media envisage an interconnected semi-virtual community where purchase decisions, social grouping, real-time collaboration, even political lobbying are all enabled by mobile 2.0. Neither Haque’s lukewarm perception of ‘thin-connections’ or more upbeat assessments of the impact of AR-enabled social media are completely accurate because a key ingredient is missing in the assessment of the viability of mobile social networking.

The real question businesses ask is how do you make money out of social media? We have seen social media give a voice to customers, empowering them to either individually or collectively influence policy, pricing or strategy.

The flawed logic by Haque and others is that you need to define your social ‘network’ through a social media platform like Facebook or Twitter and that the voluntary nature of participation in these networks does not always guarantee quality relationship that can be leveraged commercially. The fact is that there are social tribes that exist that are a great deal more powerful than defined networks established on social networking sites (SNS).

Everyday when we use our mobile phone we are participating in social behavior that is a great deal more natural and powerful than those established via SNS. Every time I call a friend or business contact, SMS or MMS my friends, check my email, or use mobile internet based communication tools, I’m forming social connections that look just like those you’d see on Facebook or Twitter, but are made up of extremely strong connections with my most intimate and trusted contacts and colleagues. These are extremely powerful natural, social networks that transcend programming and platforms – they are the networks formed by our day-to-day interactions in real terms.

CDRs or Call Detail Records are the day-to-day transaction data recorded by mobile network operators to enable accurate billing on your mobile bill. These CDRs contain all of the information required to map social interactions within tribes with substantially more accuracy than an online social network.

By data mining CDRs and seeing the natural connections between mobile users, strong network activity can be observed. Within these networks exist natural influencers of the tribe, key influencers or as Gladwell calls them connectors. By targeting these key influencers with targeted messages that are group sensitive, marketers could reach the entire group via the viral network effect.

None of this is really happening effectively today because we are either still broadcast advertising, relying on sketchy CRM databases not informed by analytics or are using demographic, tag or keyword association in weaker social networks online.

Viral social networks

Key influencers are high value targets for initiating viral campaigns

As an illustration a small start-up in Australia, QMani Analytics, has recently demonstrated a platform they call tribefinder which can identifying the tribes contained within a mobile network operators CDR pool. But the key to success on the revenue side is matching other profile information from an enterprise CRM system, or from customer behavioral analytics (like credit card usage data) and filtering CDRs to create better tribal models. Then we need intelligent marketers who can create compelling viral offers that we can roll out via MMS to a key influencer so he or she can send it on to their valuable network. The best key influencers, of course, should also be great advocates. So once we identify these guys we should service the pants off them so they feel inclined to support our viral efforts (although they won’t recognize them as viral campaigns hopefully.)

For network operators converting pre-paid to post-paid and preventing churn will be a handy by-product of tribe marketing. For retailers, banks, and other service organizations, however, we are talking highly targeted mini-segment offers that will have a massive acceptance rate. Cheaper than pretty much every current media platform, and magnitudes more effective at conversion, tribal marketing via natural mobile social networks is nothing short of a revolution in customer connectivity.

The real challenge is not the technology. Tribefinder’s analytics engine is not rocket science. The real challenge is for companies to understand the shift in marketing dynamics. For almost a decade now traditional broadcast media has been in decline. Marketing to tribes requires a completely different skill set than is on offer in most organizations today, but it is a key part of our future in reaching and retaining customers.

Tribal, viral, mobile – they are your future if you are trying to reach customers.

An organization structure that doesn’t match customer behavior

In Retail Banking, Strategy on October 26, 2009 at 13:11

Excerpt from Chapter 2 – Measuring the Customer Experience

By examining the behaviour of customers, the glaring realization is that institutions are essentially assuming that customers only ever use one channel at a time to interact with them. Hence, it is not unusual to find a web team that believes that it can take 30-40% of branch traffic and service it online. Likewise it is not unusual to hear proponents of Branch banking telling us “the branch is back” and that the winning strategy is to be investing in more real estate and variations of branch to retain customers. It’s also not unusual for customers to receive dozens of direct mail offers, email marketing offers or sms promotions from different ‘revenue centres’ within the bank independent of each other.

In 2008 90-95% of daily transactions are done electronically and in most cases the majority of transaction volume comes through direct channels namely ATM, Call Centre and Internet. By February of 2007, HSBC in Hong Kong reported in the South China Morning Post that 90% of their daily transactions were through phone, Internet or ATM, leaving the rest to branch. RaboBank, FirstDirect, INGDirect, and others have been able to successfully operate without any reliance on branch structures. This is not a criticism of branches, because we believe that branches will remain an essential part of the future of banking. However, look at the organization structure of most banks today and you’ll see a complete and total lack of understanding of customer behaviour inherit within the organization chart. It’s really quite appalling that the organization structure of many banks have not caught up with this reality.

When you examine the organization structure of most retail banks, the Head of Branch networks is second only to the Head of Retail, and in many cases is a direct report to the CEO. In comparison the manager responsible for Internet often sits under the IT or Marketing departments three or four levels below the organizational equivalent of the branch business unit lead. So let’s get this straight. 90% of the transactions go through channels that are managed by managers who have only a modicum of influence within the organization structure, while the head of Branches has the ear of the CEO and looks after just 5-10% of the daily traffic within the bank.

Figure - Partial Retail Banking Org Chart as it relates to channel priorities

Figure - Partial Retail Banking Org Chart as it relates to channel priorities

“Ah, but the branch generates all the revenue…” we’ve heard it argued. This is a really good justification for keeping traditional structures in place. Well let us really examine if that is the case.

Let us take credit card acquisitions as an example. How do we market credit cards? Currently we might use direct mail, newspaper advertisements, web and possibly promotional marketing offering a ‘free gift’ if clients sign up for a new Visa card or Mastercard. Customers are then faced with probably two or three choices of how to apply. The first option is that they can call the call centre, but the call centre refers them to the branch because they need to present proof of income and proof of identity to an officer of the bank. The same might be the case for the internet, where the application can be filled online, but we then call them and ask them to come into the branch to complete the application.

Who gets to record the revenue for the credit card application? Not the call centre, or the internet channel. Often it is the physical branch that executes the final signature on the application form and the KYC compliance check on the proof of income – so it happily records the revenue of the sale. But the branch has actually had practically zero involvement in the sale, and simply is just a ‘step’ in a required adherence to an outmoded compliance process. So does the branch actually generate the revenue, or is it merely an accounting treatment?

The attitude of many retail banking senior executives seems to be that the branch is a serious banking channel, whereas the remainder of “alternative” channels are just that – alternatives to the ‘real thing’. The problem is that customers simply don’t think like this. They don’t assign a higher value or priority to the branch; they just see it as one of the many channels they can choose to do their banking. In fact, many customers these days choose not to go the branch because they don’t want to stand in line, or they find it troublesome to get to the branch at times when they are open. Admittedly the branch is the premium service channel, but it is not the ONLY channel. So why don’t the banks think the way customers do?

The longer banks choose to reinforce a belief that the branch is superior within the organization structure, the longer it will take them to match the performance of the bank to the changing behaviour of retail customers.