Monday, 21 April 2014

The Friendly Spying that Maximizes Value!

Long gone are the days when, during the 2nd world war, Allies used spies & so-called ‘Superspies’ to keep tabs on their enemies. Now are the days of much friendlier information seeking, which is potentially beneficial for customers & definitely useful for companies. It is intriguing to see many companies sweating it out to get the latest multi-dimensional information about the customers. From the customer’s perspective, it may be baffling to see so much of your data being collected. It certainly was alarming to me.
Then I began to think, why should I consciously let these companies invade my privacy? What’s in it for me? These are the typical questions that pop up (or should pop up) in every consumer’s mind. Generally the brands want customer’s data so that they can customize their offerings to serve customers in a better way. We can call it as ‘value matching process’. In this process of value matching, firms continually tweak their offerings so as to fine-tune the offer-value to the value expectations of the customers. Some may call it extremely noble or thoughtful on behalf of companies but I look at it in a more pragmatic way. Companies want to maintain their growth & stay on top of the competition. The value matching process serves them as a means to achieve that. For a customer though, this may prove fruitful because of the highly pertinent offerings in a timely manner &enhanced overall brand interaction experience. Imagine, you pay your telephone/internet bill on 15th of every month. On 13th of a month, you get a message (through 1 or more channels of communication) telling you about other telephone/internet plans that perfectly suit your needs (maybe more so than your existing tariff plan), with some schemes/offers (more SMSs, more download speeds during nighttime etc.) which are exactly what you needed; while gently reminding you about your upcoming bill payment. Isn’t it great? Wouldn’t you be tempted to share your usage data, payments data &service preferences to let the brand tell you which of its offering is a perfect fit for you?
Now you’ll say the brands (even Indian brands) do it all the time. Let me point out the difference between a broadcasted, general message & a specific message tailored for a very narrow category of customers. Hence, I would suggest the customers to share their non-exploitable personal data with the brands who request it. After all, this will help you maximize the value of your relationship with the brand. As a consumer, that is what we ultimately want, right?
To achieve this, companies make use of an information category called PII (Personally Identifiable Information).It’s basically any information that can be used to identify an individual. This definition from ( hugely clarifies the concept. Not hanging on too much on the basics of PII, let us see some of its possible uses. Most popular use of PII is for targeted marketing. Companies use different aspects of PII to create segments & then target them. These aspects may be monetary (avg. spend, avg. family income etc.), MLE-based (MLE – Major Life Events such as Birthdays, Anniversaries etc.), preference-based (outlet-preference, service-preference etc.), Gender-based, location-based& so on. Besides targeted marketing, companies can use the PII data for customer analytics. The patterns & trends emerging from the analytics help companies to design campaigns, refine product features & so on. Various success metrics like ROI, Hit Rate, ARPU Growth can be calculated with the help of PII customer data. Recently, PII information is being increasingly used by companies to offer a coherent & uniform customer experience to the customers. Coherent customer experiences, like beginning the transaction from the previous break-off point, giving information while paying attention to customer’s product knowledge &brand assortment knowledge, have become a very real possibility due to PII data. And lastly, customers always like it when their brand has a memory. Rewarding customers based on their desired behavior has much more impact on brand loyalty than any other random reward like lucky draws.
We saw that, from customer standpoint, sharing non-exploitable personal information (again. non-exploitable being the key term) with companies can be a very important way of maximizing value of a customer’s relationship with the brand. From brand’s perspective, it could be vital to continue offering customized offerings & thus generate as well as sustain brand loyalty. Next, let us shed some light on the underlying technology which has the power to make all this possible. Watch out for our next article.

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