A good friend of mine works for one of those ‘good value’ companies. I daren’t give you any more info than that just in case he gets ‘outed’.
One of their competitors spent a large fortune on extracting data from the bowels of their transaction systems in order to get a better sense of what customers were doing. They of course hoped eventually to turn this into some kind of competitive advantage.
It took them a considerable amount of time and money, but eventually they were able to offer a far more customised and differentiated offering to individual customers. They were considered pioneers and the board were even more surprised than perhaps some of their shareholders with their success.
About the same time as this firm was dabbling with data, my friend told me that the view of his board at the time, was that rather than spend millions on data dabbling, they would slash their prices and offer more value to their customers. At the time the firm was doing rather well at this, however a few years on and many of their customers had defected to the enemy!
Of course this anecdotal evidence for ROI on data dabbling is hardly compelling to the hard-nosed CFOs in most organisations. They like to see the business case and especially how it stacks up against the many other investments that they need to make a decision about.
This is a challenge that even affects our area of expertise at CustomerSat – capturing the voice of the customer and converting this into cash! Well that is the purpose isn’t it?
A Spanish friend of mine who works in a large services company that helps major organisations figure out the whole ‘customer experience thing’ and how to improve it, said to me:
” You know everyone thinks capturing the voice of the customer is a no brainer, but strangely enough, when it comes down to it, they go deathly quiet when the cost of doing so is written down.”
” Aha!” I muttered sagely. ”What you need is a plausible business case.”
”How do I build one then!?” he challenged me. I was afraid of this.
However like Baldrick of Blackadder fame, I had a cunning plan.
On my next blog I will share it with you. 🙂