Spending every day speaking to leaders of businesses of all shapes and sizes, the executive search consultant gets a unique “wood from the trees” view of the common threads, themes and trends impacting entire sectors.
Through that lens, it’s clear to me that senior execs are increasingly focusing their energies on one area – data. And specifically, the use of it to drive business strategy. I’m in absolutely no doubt that, as time goes on, the difference between success and failure will be those companies who embrace data and those who don’t.
Don’t panic. It’s more evolution than revolution. Most companies already possess a goldmine of customer data. They’ve been generating it for years – often unknowingly – through various portals like websites and apps, till sales and customer service logs. It’s just that many haven’t realised what they’re sitting on, let alone considered mining it.
Ground-breaking companies like Google, Amazon, Farfetch and Missguided have generated rampant growth through making sense of billions of lines of customer data. By turning unstructured statistics into tangible insights, they’ve consistently acquired new customers, retargeted existing ones and improved overall customer experience in real time, on a person by person basis, with ever-increasing accuracy.
Gone are the days of mass segmentation that divvied up the customer base into more manageable piles, like “YUPPYs”, “NEETs”, “Marlboro Men” and “Millennials”. The only issue was, any one of these could include millions of completely different, potentially conflicting personalities, based on a series of generic lifestyle factors. As such, they were rendered largely useless.
With increasing regularity, rather than hiring the Mad Men-esque marketing directors of the pre-digital era, future-focused companies are now insisting upon a deep understanding of data in every senior executive they hire.
Yonca Brunini, Google’s chief marketing officer for EMEA tells me that, in the past, marketers had to group millions of customers together into more “manageable segments”. Today, the digital economy provides such robust customer data that they no longer need to distinguish so broadly.
“We can now offer bespoke experiences that surprise and delight each individual customer, at scale and in real time. With these capabilities growing, along with customers’ expectations, the companies that survive and thrive will need to prioritise building out their CRM and data marketing capacities.” – Yonca Brunini, chief marketing officer, Google EMEA
And beyond marketing, data is impacting on trading, stocking and distribution decisions. According to market research firm Slice Intelligence, Amazon sales accounted for 43% of all online-generated revenues in the US market in 2016. By continually inching up performance metrics through data analysis, the resulting marginal gains delivered amounted to billions of dollars in extra revenue.
By knowing the products users want and when they want them, customer data-centric companies are able to reduce costs and maximise returns and efficiency, avoiding the need to discount undersold lines clogging up warehouses.
Established corporates are starting to take note. C-suite level chief data officers, increasingly reporting into CEOs, are starting to appear around FTSE and Fortune board tables.
Only this week, American car giant General Motors hired its first chief data officer in A. Charles Thomas, previously CDO of Wells Fargo.
An entirely new ecosystem is already developing around this field. ASI Data Science, a truly fascinating British scaleup company specialising in helping organisations to drive business value using artificial intelligence and big data, is achieving unignorable results.
One of its recent clients, a large airline, was looking to minimise the business impact of various disruptions, such as crew sickness, resignations and inclement weather. Previously, they had relied on gut-instinct to guesstimate the number of standby crew needed to ensure that all scheduled planes could fly. To cover all bases, estimates were inevitably conservative, costing the company more than it needed to spend.
Working with the airline’s analytics and HR teams, ASI were able to build a machine learning model that could more accurately predict the likely required capacity.
By reducing standby staffing levels from 21% to 14%, the company made an annual saving of more than £10m. By simply tapping the data it was already sitting on, the airline was able to save an eight figure sum.
“Applying artificial intelligence to business problems will be one of the biggest transformational opportunities of the 21st century.” – Marc Warner, CEO of ASI Data Science
Data can revolutionise every aspect of every business, and we can’t begin to imagine the influence it will continue to have going forward. But equally, it’s worth remembering the simpler, equally impactful benefits it can bring. As a fascinating FTSE 100 chief marketer explained to me, effective implementation of customer data can immediately turn a seemingly faceless conglomerate into a personal acquaintance or friend, attuned to the needs of each individual customer. And there’s no better way of ensuring brand loyalty and love than that.
So yes, at one end of the scale, data can revolutionise every aspect of business, from product to price point. But on a far simpler, and – I would argue – equally valuable one, it can do something that, until now, has been the unachievable gold standard of every corporation: generate the kind of relationship between corporates and customers that pub landlords enjoy with their regulars.
It’s all there in the numbers.