How do you build a 360-degree customer profile?
By Jelmer Pepping Everyone wants it and only 10 percent has it: a 360-degree customer view. Only with extensive individual […]
By Jelmer Pepping
Everyone wants it and only 10 percent has it: a 360-degree customer view. Only with extensive individual customer profiles you can communicate one-to-one with your target group. How do you create the business case and which steps do you have to go through to really get to know your customer?
A 360-degree customer view has three important advantages. Firstly, you gain valuable insights. For example which problems you can solve for the customer, how you can apply up- and cross-selling, and how you can offer a relevant, personal, contextual and predictive customer experience. All of this leads to more transactions, higher turnover and retention of the customer.
Secondly, 360-degree customer views enable predictive analyzes. You record all interactions with the customer, and on that basis you determine the outcome of each event. This can the level of satisfaction with a purchase or accepting a quotation. For each customer, the system can predict the best next step for marketing, sales or customer service. Think of an email giving a discount on a specific product the customer is interested in or sending a feedback form.
Focus on the most valuable customers
Every interaction with a customer must contribute to achieving a business objective, like more customers, loyalty or retention. These interactions must be designed, measured and reported per customer type or segment, so you can discover patterns that lead to the right predictions. You want to know exactly what the response is. For example to ads, marketing offers, cross- or up-selling offers, and promotions in the loyalty program. That way the algorithm can better assess the outcome of a similar action with the same customer. If it appears that a certain group responds well to a specific cross-sell or up-sell offer, you can do the same offer to all customers with the same characteristics.
Thirdly, with a 360-degree customer view you can adjust your business processes more tightly. You do this by establishing the value of a customer and adjusting the service to that. Compare it with loyalty programs in aviation: someone who flies very frequently and has a high status gets someone on the phone immediately when he calls the helpdesk. While someone who saves on entry level is first referred to information on the website. This way, the turnover of your most valuable customers grows, while the costs for serving customers with a low value are minimized. Moreover, thanks to the extensive customer profile, you can find out how to make these ‘low value’ customers ‘high value’. For example by making specific offers or adjusting the service level.
Four steps to a 360-degree customer profile
So with a 360-degree customer view you can identify opportunities and use them, and therefore work more efficiently. But how do you create such an image? You take the following four steps:
1. Identify the visitor
You want to collect information about a (potential) customer across the channels and for a longer period. Therefore, it is necessary that you link a unique identification code to each visitor, where all activities are logged on. For example, you can see if someone is a customer already, or a new, or returning visitor.
2. Collect internal data
In this step you collect information about transactions and interactions with the company. Everything the customer does leaves a digital footprint and you want to map that. Think of website behavior, click behavior in the newsletter, membership of the loyalty program and social media activities.
3. Collect external data
Context is important and that is why you need third party data. Consider trends, events, geographic and demographic profiles (educational level, family size, income, value of the house, etc.), general lifestyle and behavioral information, and a competitive analysis.
4. Apply machine learning
All data collection is complete, so the algorithm can look for patterns. For example, it predicts how likely it is that visitors buy something, how they can be persuaded to convert, and where there are opportunities for up- and cross-selling.
With this information you can not only improve the engagement of, and the relationship with your customers. You also get insight into the Customer Lifetime Value and the acquisition, service and retention costs per segment or even per person. You discover which message type produces the best response, which products and services match the interests of the customer and which offers the highest conversion. Next to that, you know through which channels customers prefer to communicate. With a 360-degree customer profile you don’t only send the right message, at the right time in the right channel, but also give it the right priority.