Resist the temptation to focus and organize around silos. While silos can maximize a part of the system, they sub-optimize the whole. We are building a customer (digital) ecosystem.
There is something as “not seeing the forest for the trees”. In the case of data (including big data), that can certainly be the case. It is easy to get lost in the data. It is important to see data as a way to gain customer insight. Having gained insight, we must take action to improve results for our customers and business.
The digital executive needs to evaluate whether the department silos are structured properly as a part of the overall ecosystem. One area to look at is what is the overall level of accountability around supporting the total results (including renewal and upgrades) from customer experiences and relationships. Structural change may be needed to support optimal results.
In scientific terms, an ecosystem is formed by the interaction of a community of organisms with their environment. The ecosystem has multiple, interdependent components that function as a unit. Innovators have long envisioned a similar environment where data, technology, people, and business processes operate in synchronization to improve customer satisfaction and business performance. The key to achieving this vision is having the capacity to discern the true nature of customer relationships in an intuitive manner. This capacity is known as “customer insight.”
The concept of the customer data ecosystem can be further broken down into two key aspects: the Customer Lifecycle, and the Information Lifecycle.
Below is an example from Forrester Research of how an ecosystem could look.
In the customer ecosystem, there are several components that are important.
- The value of data
- Customer interaction data
- Contact and account data
- Customer information files
- External data
- Turning data into insight
- Turning insight into action
Integrated customer data forms the cornerstone of the customer ecosystem. Organizations have rich sources of data including customer interaction data, account data, external data sources, and customer information files. This data must be cleaned and properly linked together as fast as the data becomes available.
Digital Business Ecosystem
Individual data elements provide undeniable value in the ecosystem. Integrated data provides even greater value. However, integrating customer data is far from an easy task. Disparate systems and errors in the data typically prevent all of the data from being used by analytical processes. To turn all of this data into insight, sophisticated technologies and techniques are needed to clean the data, discover hidden relationships, and integrate it. This integrated view must then be fed into analytical models to discover and predict patterns in customer behavior. This deep insight into a customer services help organizations fully understand customer profitability, attrition, and retention.
Providing insight, however, is only one part of the solution. This insight must be turned into action to achieve real benefits. Two best practices have emerged in a customer relations focus: dashboards and scorecards.
Dashboards provide a quick way to get an immediate picture of business processes. Similar to a dashboard in a car, data is displayed in an intuitive manner that allows employees to see how the processes that they are responsible for are working. In the customer ecosystem, a dashboard contains multiple information displays that show how customer processes are working.
Scorecards are a vital part of the dashboard display that show specific measurements, also known as key performance indicators (KPIs), for a specific employee role. Unlike financial condition ratios reported to the Board and the IRS, KPIs always reflect strategic value drivers. For example, Return on Investment or functional expenses are common metrics used to judge financial performance, but it doesn’t measure a specific driver of value.
For the customer ecosystem, a KPI measuring the average value of a new customer reflects a strategic objective of acquiring more profitable customers.
In order to drive the right behaviors in the ecosystem, these mechanisms must be part of the daily job role for customer-focused employees. That is, insight must be “in sight” of people in day-to-day operational roles. Therefore these capabilities must be quick and easy to use.
In the business world, there is an old saying that “what gets measured gets done.” Dashboards and scorecards also provide a strong way to clearly communicate business strategy and objectives across the enterprise.
When viewing a report, graph, or KPI, people often need to understand why a specific number is different from what they expect. For insight to be truly “actionable”, a user must be able to drill down into the details. This process is typically called “Root Cause Analysis” because the user must get to the “root” of the problem. For example, if the KPI Average Value of New Customers is lower than expected, the user needs to be able to look beyond the KPI to the underlying data.
Here are the key ideas:
- Start with the view of “the forest”.
- Begin with simple integrations of valuable data to create insight.
- Encourage taking action on insights. Structure everything around actionable outcomes of data and the insights.