The impact of big data on consumer engagement

Collecting and accessing large amount of customer and interaction data across companies allows businesses to gain insight into customers' needs, lifestyle and behaviour. More importantly, it allows businesses to rapidly respond when those needs change.

So says Dr Alex Rummel, co-founder of Grapevine Interactive, who will be presenting on 'The potential impact of big data and analytics on loyalty programs and consumer engagement', during the ITWeb Business Intelligence Summit, to be held at The Forum in Bryanston on 14 and 15 March.

According to Rummel, this sort of data is available end-to-end through loyalty programs across the company itself, redemption partners, communication services providers such as WASPs and banks, and through purchase and refund transactions.

"By using this breadth and depth of data, companies can design, manage and innovate loyalty programs on an ongoing basis, using the continuous flow of customer journey data inside their ring fenced value-added service provider network."

He says this also provides great granularity, and an up-to-date source of data to help identify existing customer segments, and target each with specific customer engagement paths. The business impact of this two-fold.

Firstly, it helps to understand customer needs and gives the ability to provide customers with what they want, when they want it, creating happy, trusting and long-term loyal customers. Secondly, it removes the clutter of non-value engagements, and the existing complexities of loyalty solutions, and by baling self-service, reduces marketing and operational efforts, freeing up funds for innovation where it matters.

Speaking of what businesses are doing wrong in terms of customer engagement, Rummel says with technology being so pervasive, and being an accepted spend category, companies continuously fall into the trap of following trends blindly, such as selecting and implementing related solutions without defining actual purpose and returns for the investment in sufficient detail.

He adds that for organisations that do take the time to understand their customers prior to implementing such capability, there is a challenge of how to differentiate between what customers say they want, and what they really want.

Dr Alex Rummel, co-founder of Grapevine Interactive.

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Another issue is the belief that customers are there to serve the business, hence forcing the customer to come second, instead of realising that the business exists because of its customers.

In the context of loyalty, he cites the example of companies like Edcon, who have a large loyalty base, but members are confined to spending their loyalty benefits within their stores on standard business stock, such as clothing, instead of allowing customers to spend points in complementary areas such as dining and entertainment.

So what could businesses be doing better? "Companies need to apply the outside-in principle, in other words starting with the customer in mind when planning, designing, implementing and supporting loyalty and consumer engagement solutions."

Rather than just the primary driver, he says business objectives need to be aligned to customer purpose to create mutual benefit, to in turn create real participation and ongoing value exchange between consumers and businesses. Another common example, says Rummel, is how some companies spend time understanding their customers before launching a loyalty program, but many of those don't take into account on-going customer dynamics, and that customer needs are changing over time.

Delegates attending Rummel's talk will hear how loyalty is easy. "I would like to specifically highlight in the talk that loyalty and consumer engagement are easy to start, easy to manage and can be made affordable if planned and executed correctly."

In addition, they will learn that the tools are here, and with all the data available to us today, tools and mechanisms such as software as a service can control scope, budget and time better than ever before and with less risk than in the past.

Finally, they will learn that loyalty is critical. "Loyalty in itself and creating ongoing value for customers is the only thing that will create real stickiness between and will serve as the key driver for business growth and survival in the increasingly digital economy."