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IRUK Top500 The Customer Report: 2018

IRUK Top500 The Customer Report: 2018

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When data is not enough (IRM57)

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Rosie Freshwater, MD of retail marketing agency Leapfrogg shares her thoughts on why empathy is the key to customer connection.

EXPECTATIONS ARE are at an all-time high. The UK’s army of evolved shoppers is in charge, seeking to be understood and aware of the many tactics used to lure them in. So what can be done to build a long-lasting customer connection?

In the past, a retailer had a limited view of its customer. Before analytics and algorithms, a simple in-store transaction meant sole focus on physical customer service. Flash forward 20 years and myriad channels are available to increase connections with shoppers. While data is the bedrock of decision making, empathy is key when considering consumer needs.

Without truly understanding customers the connection is fabricated, which fast becomes obvious. Used skilfully, insight data can transform marketing into a conversation between a brand and its following, making shopping experiences personal and relevant. Retail strategies can be tailored to each individual by analysing transactional data and attitudinal insight.

Making the effort to be on a customer’s level is, behind the scenes, an in-depth and complex action, while on the surface they experience a simple and memorable transaction. Retailers must distinguish between functional and empathetic data, and can encourage loyalty by recognising and responding to consumer behaviours and motivations.

With customer data and insight roles springing up across the industry, there is no doubt retailers are moving towards a place where business decisions are based on customer data. In theory, they’re giving shoppers what they want.

There is an enormous amount of data being collected across multiple channels and retailers are starting to use it to inform daily actions. For example, ECRM programmes are segmented and tweaked according to previous purchases and online behaviour, while catalogues are being sent to different customer segments with tailored messages or product selections. People are now being served different versions of a website based on data the retailer has gathered during previous visits, or how they have behaved in other places on the web.

All of these channels are no doubt seeing an improvement in ROI as a result of retailers becoming more data focused. Data driven personalisation has definitely improved connection with customers, but the additional revenue it brings is only part of the impact a true understanding of the customer can have.

No data will tell you what is personally important in life to your customers, and how in an ideal world they would like to engage with your brand. Yes, data will tell you how they have engaged in the past, how they came to find and interact with your channels, what they bought and how often they came back. And while all of these things are useful to know, that data is based on the experience you offered them, not the experience they really want when shopping with you.

It’s not enough to have an analyst in house who can crunch numbers to predict future behaviour. It’s about building on that knowledge to create a level of real customer intelligence that enables you to get inside the minds of your customers and who they are as people.

CUSTOMER INTELLIGENCE



Empathetic insight is the missing part of the customer intelligence jigsaw. Many retailers say they know their customers, but quite often this is based on a set of assumptions or some very top level demographic profiling. What they don’t know about are the personal values that come into play with each brand engagement, or the types of behaviours their customers demonstrate when considering a purchase. They don’t understand the type of content that will engage on an emotional level and lead to brand empathy.

Without this knowledge, retailers are not reaching shoppers in a way where they can become a part of their everyday enjoyment, instead of a place to buy things. The holy grail of customer intelligence is finding the ‘happiness place’, where function, message, product, time and place all collide to deliver that moment of fulfilment.

This place is difficult to find and the more customers a retailer has, the harder it gets on a micro level. However, a good range of emotional insight about the different segments you have will, at a more general level, allow you to deliver a really relevant shopping experience.

Before carrying out any emotional insight, use the data you have to segment your customer base. Regardless of database size, there will be different types of customers within it that can be grouped together. Many retailers segment by financial value and activity, for example they will have high value loyal customers, new recruits, inactive and so on. Others may also have segments based on type of product bought, gender and age.

Once your database is segmented, you can start overlaying emotional intelligence. Using a combination of surveys and focus groups, retailers should be looking to discover demographic information, personal values, life stage as well as lifestyle and hobbies. Other areas to cover are on and offline media habits, what inspires and who influences them, preferred types of content, buying behaviours and channels, what they want from you plus other brands they love and why.

Overlaying all of these insights with good data is the foundation of becoming a truly customer centric marketer.

"Its not enough to have an analyst in house who can crunch numbers to predict future behaviour"


We recently carried out a project for interior lifestyle retailer Rockett St George, mixing emotional insight and solid customer data. It contributed to a 20% rise in sales over one month.

In depth profiles for key segments, including active high value, inactive and new customers, were created to help refine communication around social media, email newsletters and catalogues in the run up to the launch of a new Christmas look book.

A bespoke survey was used to fully understand the experience customers wanted at each stage of their buying journey. Each segment demonstrated similarities and differences in the experience they wanted when shopping with Rockett St George. Findings showed that shoppers browse and buy at very different times, while a large proportion described themselves as creative, which led to a change in the way merchandise is displayed online.

The research looked at buying decision drivers, values and content consumption, allowing Rockett St George to communicate with customers in a personal way. It’s now sending out far less but to the right people, and is printing a catalogue again as its audience wanted this. Words that resonated with shoppers included quirky, eclectic and family, so the retailer’s Christmas catalogue took the shape of a look book full of creative ideas, recipes and products.

The same methodology can be applied to any size retailer: a customer base can be split using past and current transactional history into segments of different value to the business, bespoke surveys are sent to each segment, with profiles created accordingly from the data. Individual customer preferences can then be addressed more closely. A larger retailer will naturally have a larger database to segment, but the process of understanding trends of emotional needs across those segments remains the same and can be used effectively in similar ways.

A wider product range may create more segments on which to overlay emotional insight. The increasing number of tools and skills available to retail businesses means it can be converted into a level of data that can then be fed into these tools, which allows mass personalisation on an empathetic level across a database.

The results? Show an image-heavy version of your website to customers you know are influenced by and enjoy that type of content. Tailor email editorial around what they are likely to be doing when they read it.

Socially speaking, you can create the right engagement for the segment most likely to be using each channel. Your millennial customers may be on Snapchat, but Facebook and email is where you’ll likely find generation Xers. How will you know unless you find out? Just ask them. You’ll be amazed how many of your customers want to tell you more about themselves.

Stop engaging with customers based solely on data or assumption; create moments of happiness and connection by really understanding them as people. Happy people spend more and remain loyal.
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Featured In
InternetRetailing Magazine – March 2016 – Issue 57 (IRM57)

InternetRetailing Magazine – March 2016 – Issue 57 (IRM57)

Featured In
InternetRetailing Magazine – March 2016 – Issue 57 (IRM57)

InternetRetailing Magazine – March 2016 – Issue 57 (IRM57)

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