Let me give you an example. For years one of our colleagues has regularly bought a particular type of cat litter from a supermarket. Recently an alternative product has come on the market and although it’s more expensive it gives a better outcome in terms of absorption and odour control so our colleague has swapped to the new product. They are now being bombarded with special offers in respect of the product which they used to buy, despite the fact that they are now buying a more expensive replacement product on a regular basis from the same supermarket.
It’s easy to see how this has happened. Store card data analysis has flagged up the cessation of a regular purchase but the algorithm has failed to spot the move to the replacement product. You could say that is a fault of the system, that in keeping it simple the programmer has not allowed for a like-for-like product shift. But what this incident has demonstrated to our colleague is that the store sees them purely in terms of raw data, rather than trying to develop a deeper understanding of their needs.
Customer data is one thing, customer understanding is a whole level again. Data creates facts, understanding creates dialogue and builds loyalty. Data may highlight trends but understanding enables you to work with customers to develop products and services which really resonate with the marketplace.
If you want to be seen as an organisation which sets innovation at its heart, which really cares about its customers and which builds longevity through understanding then simple data gathering is not enough. On the other hand, if you’re not prepared to take that step towards understanding then enjoy your data, it will help you to track your downfall as those who do care capture customer hearts and the marketplace.