If organizations want to be leaders in customer experience, they must start with data, Forrester and Deloitte thought.
The biggest challenges of data analysis
Salesforce Vice President Patrick Stokes talks to Bill Detwiler from TechRepublic on Dreamforce 2019 about data strategy, data collection, data silos and data privacy.
The secret to gaining customer experience is data, a Forrester and Deloitte report found. Although data is crucial to achieving positive customer experiences, according to the report, companies face challenges in collecting and processing this data.
Deloitte’s What is the secret to winning customer experience? report, commissioned by Forrester, surveyed 425 US data decision makers in the US to determine how companies compete and win when delivering positive customer experiences.
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Over the next 12 months, the top priorities for organizations are improving customer satisfaction (85%), winning new customers (82%), increasing profitability per product / service (81%) and improving data management and activation (80%), the report found.
To help organizations maintain control of their data, the report has assembled the following three major takeaways that reveal the challenges and benefits of data-driven business decision making.
Three keys to win the customer experience
1. Complex data structures influence the customer experience
With data from so many sources and housed in a variety of internal tools, companies are struggling to keep track of all their data.
On average, organizations said they have 17 different technology applications that utilize customer data and use an average of 28 different data sources to generate customer insights and engagement, the report found.
The reason for these diverse data sources is business purchases, organization silos, pathwork of existing systems, competitive priorities, growing customer expectations and more. All of these factors contribute to the fact that, according to the report, only 38% of companies said they know where all their customer data is stored.
In trying to determine the maturity levels of respondents’ data management practices, the report identified 33% of respondents as leaders, another 33% as transitions, and 34% as laggards. These findings show that the majority of respondents are still moving towards maturity of data management.
2. Collecting and connecting data are important challenges
Data management is also difficult for organizations because they have problems with adequately collecting and connecting data, the report showed.
At maturity levels, companies did not have real-time reporting capabilities (45% leaders, 42% laggards) and the technology required to perform customer data management tasks (39% leaders, 44% laggards), according to the report.
The report also found that leaders in particular were struggling with poor quality, inconsistent or inaccessible data (41%); while those lagging behind said they were struggling with data fragmentation, such as integrating multiple sources with customer data into their own platforms (41%) and collecting siled data from multiple systems (41%).
All of these data management and fragmentation challenges resulted in more time spent collecting data, insufficient analysis due to incomplete data, inaccessible data and inefficient data management.
In addition, companies have cited the three main impacts of data management challenges, including reaching the wrong customer, lower revenues, and increased security risk from more vendors without access to data or analytics, the report said.
Data management strategies must be embraced by the entire organization, not just by specific departments. Organizations will not get anywhere in silos, according to the report.
3. Internal data management promises visibility and control
The report found that the best way to regain control over customer data was to bring data management capabilities in-house.
More than half of the leaders (57%) said they have implemented and expanded internal control. Even those lagging behind (35%) said they are planning to get data control in the house for the next 12 months if they haven’t already done so, the report said.
Looking ahead to the next two years, more data will be moved internally, as fully outsourced management will fall by 48%. And data that is managed internally with a combination of commercial and proprietary tools will increase by 40%. Both predictions show efforts on the part of the companies to gain more visibility and control over data, according to the report.
Companies said they believe that greater visibility and control will lead to higher quality, consistent and accessible customer data (57%), improved customer experience (53%) and higher business income (48%).
Additional benefits of internal data ownership included more effective marketing, access to consistent data within the company, more knowledge about where data is located and the realized value of data, the report found.
To guide organizations toward better data management methods, the report identified the following four following steps:
1. Perform a data audit and create a data strategy
Before making important decisions, companies must understand the inputs and outputs of their current data management strategies. Start by identifying use cases where data is generated or collected, and identify where that data is stored. By seeing where all your data is going, organizations can better see where they can consolidate and organize the report.
2. Prepare for an investment in data management
Switching from an external service or licensing of commercial software to bring data and personnel under own management can be costly. Organizations must take into account the start-up costs for the technical infrastructure that is needed to bring data management under their own management. The company must also prepare the maintenance costs of the program along the way, according to the report.
3. Feedback the data value to the customer
Before addressing internal data management, companies must develop an ROI analysis for each phase of the rollout of the data management program to ensure that the customer and the company will ultimately benefit. The program should be linked to customer KPIs, including customer satisfaction and income to justify ongoing investments, the report found.
4. Start today
Meeting customer expectations is crucial for organizations, so business leaders need to plan and complete the next steps sooner rather than later. Look for partners who can help the organization implement productive data management strategies, the report found.
For more information, see how companies invest in digital transformation to improve the customer experience on TechRepublic.
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