Derek Bishop


Customer data or customer understanding

Date added: 28th Apr 2016
Category: Customer Experience

Customer data is one thing, customer understanding is a whole level again. Data creates facts, understanding creates dialogue and builds loyalty.

Regardless of whoever came up with the phrase ‘lies, damned lies and statistics’ it’s clear that they lived before the time of the computer; otherwise they may have been tempted to add big data to the end of the list. For there’s no getting away from the fact that we live in an era which is awash with data; lots and lots of data!

So much so in fact that according to Thomson Reuters 2015 state of innovation report every two days humanity now creates as much information as it did from the dawn of civilisation to the end of 2003. Every phone call, every transaction, every move we make as we travel through our daily lives is logged, recorded and available for analysis.

But what do we do with all of this information? Proponents of big data would claim that information can be used to help to improve lives, to design cities or to move on the search for potential causes of, and cures for, disease.

And we’re not saying that they aren’t right, but there is a real danger that people and businesses will start to see data as the be all and end all and forget that it has to be interpreted in order to gain a true understanding of people. In other words, when we stop seeing people and start seeing only data then we are all relegated to the status of ‘the appendix in bed three’; a dehumanised symptom rather than an individual.

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.

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