The future is now: take your customer data to the next level
CX blogger Annette Franz on how prescriptive analytics allows companies to make data-driven decisions outlining the best action to take
I'm often asked about the future of customer experience: What does it look like? What will companies focus on this year? What advancements should we expect to see? What are the latest tools to help companies improve the experience?
For this post, I'll address the latter.
Data is available in abundance these days. There is a tonne of statistics out there about the volume of data we see today compared to just a few years ago – the one thing we can all agree in is that there is a lot of it! But most companies don't use – or know how to use – even one tenth of it.
I've written previously about the six steps you should take to use data to transform the customer experience. Those steps – centralise, analyse, synthesise/contextualise, socialise, strategise, and operationalise – are handy, but most companies often get hung up on the first step.
If they know where their data is and have pulled it all into a data lake – or if they've gotten as much data together as they believe they can for now – they then get stuck on the next step: how to analyse it.
This is where there is a real opportunity for customer experience professionals – and this is where we see the latest tools to help companies improve customer experience.
Companies are sitting on a goldmine of data and now it’s time to do something with all of that data.
It provides us with the opportunity to forecast the future… and remedy the present.
I am talking about predictive and prescriptive analytics – and customer experience professionals need to have these tools in their toolboxes.
Unfortunately, many professionals remain unaware of these tools or aren't sure what they do.
Traditionally, companies have been able to identify and prioritise improvement opportunities from customer surveys via correlation or regression analysis and quadrant charts, which help identify areas in need of improvement.
However, many people do not have faith in quad charts, because they don't provide the ability to identify the impact those improvements have on desired business outcomes.
In recent years, there has been an evolution from purely descriptive analytics (basic summary statistics) to predictive analytics (predicting future outcomes based on what you know about the customer).
Now we also have prescriptive analytics – which take that prediction and tell you why and what to do, outlining the next best action to take in order to achieve a desired outcome.
According to Wikipedia, prescriptive analytics not only anticipates what will happen and when it will happen, but also why it will happen and can suggest decision options on how to take advantage of a future opportunity or mitigate a future risk and shows the implication of each decision option.
You can see how this is a windfall for customer experience professionals and, more importantly, for customers.
Prescriptive analytics isn't just for survey data. If you've got customer demographic, transaction, interaction, or other behavioural data, you can analyse it to predict not only an outcome but also which customers will likely be aligned with that outcome, and then use prescriptive analytics to prescribe the next course of action to take with each customer to ensure the outcome is achieved.
For example, you could predict who is most likely to buy a certain type of car, and then identify which messaging, discounts, offers and sales approach to use to take the customer over the line.
Customers want personalised experiences – this tool ensures that happens. You can use prescriptive analytics to take your customer data to the next level, improving the experience and adding value for your customers.
Data is just data until you do something with it. You need a tool to identify what you’re supposed to do with the data. Ultimately, you need prescriptive analytics to identify why, how and where – and from which action – you’ll get the biggest bang for your buck.
Having prescriptive analytics in your customer experience toolbox gives you a significant first-mover advantage. There's still an awareness and education effort required to help companies realise the beauty and benefits of using prescriptive analytics to transform the customer experience – especially the part about personalising the experience on an individual level.
If you’ve been stuck in a rut and haven’t been able to make any progress toward improving the customer experience, it’s time to rethink how you’ve been analysing your data. Making data-driven decisions will only lead to better outcomes – for the customer and for the business.