In my family, one of our favorite games to play is to quote a line from a movie and guess what movie it is from.  In that spirit, I actually thought of a movie quote that meshed well with my blog topic today:  “We’re way past birthdays now”.  If you know the movie and the character, feel free to comment below.

Now on to today’s blog.  Many of the smarter companies today are taking a look at their customer data and transactions and developing customer segments and making marketing decisions on how to better engage their customers.  Of course, this is a good start, but it’s kind of like using your birthday or anniversary as a password—it’s better than nothing, but let’s look at going “Way Past Birthdays Now”.

There are three key factors, in addition to your customer data, that you must have to get the most out of your customer insight:

1.  Robust External Data— You need access to external data that can give you insight into the behaviors, purchasing patterns, and financial situations of your customers.  Access to online activity, recent purchases, and credit worthiness are important in painting a complete 360 view of your customer.  You know what customers are buying at your store, but you don’t know what they are NOT buying.

2.  Advanced Analytics— With all of the data, both internal and external, available today, it is critical that you find an experienced analytical resource.  More than just a statistician, an experienced analyst will have client-side experience and will be able to offer valuable strategic advice in addition to technical expertise such as segmenting your customers and building predictive models that will increase your results immensely.

3.  A FAN Reporting— A FAN (As Fast As Needed) Reporting means that you get access to your information in meaningful reports and dashboards as fast as you can act on it.  For some companies, this is monthly, some weekly, some daily and for more and more it is real-time.

Once you have these three critical components in place, then you can really get to know your customers.  You will be able to develop more accurate metrics on total wallet, share of wallet and market share.  In addition, you can better plan your engagement strategy based on the known behaviors from online and offline data including social media and web advertising scenarios.  And, you can determine offers based on risk and ability to pay.

The goal is to get a true 360 degree view of your customers.  Without external data, you will only have part of the story and you will be stuck at “Birthdays”.

The title is not meant to say that the data you collect on your customers is not real or factual, but it is only a portion of what you need to have the full picture. For example, I’m 6 foot tall and weigh in about 197. Take a look at me in my running clothes (with the slight love handles) and you’d never know I could run 50 miles. Here’s another example: I have two dogs – a Golden Retriever and a Chow mix. When feeding them treats you’d expect the Chow to be the one you have to be careful with, but it’s the Golden that will get your fingers. In both instances, you need more data than what you can see to make a good judgment. The same is true with your customers.

Here are some examples I’ve seen, and things that can be done to get the full picture.

Grocery Store

The loyalty program at the grocery store collects your personal information and the transactional information on your purchases with them. They base their sales and marketing to you, and others, on what is being tracked by this system. Never looking further into you as a customer, they could never know that your standard milk, bread, peanut butter, fruit, and occasional meat purchases are not your full potential.

Going out and purchasing additional information they could find that you have 3 children with 1 still at the age for diapers. Your household income is well above what the purchases indicate and your location is not the closest to their home.

Now you can surmise that this is someone on their way home from work picking up things that are out of stock at home. Marketing more wisely, you can pick up share by introducing them to the closest location, letting them know about great prices on diapers, and incenting them on kid friendly foods.

Retail Banking

Banks often use information coming to them via their various accounts with a consumer to estimate income and decide which product to market next. If the bank never looked outside its walls to gather further information, or verify calculations, they can miss great opportunities.

Going outside the bank and getting additional demographic, economic, and credit information will enhance the decision making process and potentially uncover hidden gems. Using external data such as the following will give a full picture.

• Household Income
• Investable Assets
• Home Value
• Discretionary Spending
• Job Stability
• Household Deposits
• Loan Amounts for Mortgage, Auto, Home Equity, and Installment
• Additional property ownership
• Net Worth

What are the hidden datasets in your organization? Are you missing key opportunities because you don’t have the whole picture? Altair has the data and the capability to make your decisions more informed.