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Why it’s early days for the new AI-driven personalization engine at McDonald’s

If ever there was a story to indicate the pace of change, it’s the McDonald’s decision to purchase a tech business whose speciality is AI-driven personalization. On the one hand, the Dynamic Yield acquisition is a fascinating example of the blurring of digital and real-life channels – exactly the vision of omnichannel we at Thunderhead have been championing for years. On the other, it’s maybe something of a missed opportunity. I want to talk about both sides.

While the acquisition, rumoured to be valued at $300m, is McDonald’s biggest in 20 years, it hasn’t come out of the blue. Since the 2015 appointment of CEO Steve Easterbrook, the fast food goliath has followed an increasingly “data-led” strategy. Interactive menus have replaced static store signs and tellers, and the mobile app lets customers save favourite meals or order ahead. Behind the scenes, data is ever more important in streamlining production and cutting waste.

Despite this, the nature of the business means McDonald’s serves the majority of its 68 million daily customers in person, with buying decisions made there and then in the store. If digital retailers can leverage personalization technology to power recommendations, why shouldn’t McDonald’s use it to simplify and influence customer choices at the checkout?

That’s exactly what the burger chain successfully trialled prior to the Dynamic Yield acquisition. Customers pulling into a Miami drive-thru were presented with dynamic menus, updated with food choices tailored to reflect factors such as weather, local events, and simply what was popular with other diners.

Dipping in

There’s an enormous appetite for this kind of smart technology in retail, and with it, big potential.  Walmart has established its own technology incubator in Store Nº8. And last year sports giant Nike acquired Zodiac Metrics, a consumer data analytics firm specialising in predictive analytics and Customer Lifetime Value management, to help drive their digital transformation and direct-to-consumer program.

While the McDonald’s trial explored limited personalizations, Wired cites McDonald’s executives who suggested use cases such as speeding up the line by promoting quick-to-prepare menu items. Easterbrook suggests predictive analytics will ultimately reach further back through the supply chain, streamlining operations and reducing waste still further.

There’s great potential in the technology, but getting to the personalization bit presents a problem. In digital channels we can identify customers and present personalized recommendations or actions before time of purchase, although in many retail scenarios, brands have no idea who customers are until they pay using a phone, card or app. Sure, the early iterations of McDonald’s technology will customise menus based on various factors, but the personal preferences, history or wishes of the customer won’t be among them.

Easterbrook is only too aware that true personalization, and the real return on his investment, lies somewhere down the line. “If customers are willing to identify themselves,” he notes, “we can be even more useful to them, because now we call up their favorites.” In fact, Thunderhead’s Engagement-Led Marketing research shows that customers are increasingly happy to provide personal data, provided they get meaningful returns.

But what is meaningful? Even once McDonald’s can identify its customers before they order, Dynamic Yield’s technology is only going to serve them personalized menus and offers. Will a few previously ordered items feel like a great experience if they’re lost among ‘inside-out’ options, driven by business factors like store performance or sales targets?

A balanced diet

In truth, leading with customer experience takes more than simple personalization. It means building a relationship in which the brand knows the customer as an individual, and uses that as the basis to understand and pre-empt their wants. Operating at the scale of McDonald’s, it means having insights based not just on aggregated behaviour analysis, but on the actual individual customer journey, and the context and intent the business can derive from everythingit knows.

What McDonald’s needs is not a personalization engine, but a customer journey orchestration platform. Like so many retail brands, it needs to go beyond crude personalizations – ‘other customers are buying this’ and ‘buy this again?’ – to individualization. It must only show content or offers that are truly relevant.

If personalization means remembering that the customer likes beanburgers, individualization is knowing they’re a vegetarian.

What’s the difference? If personalization means remembering that the customer likes beanburgers, individualization is knowing they’re a vegetarian. If personalization is offering discounted coffee, individualization is remembering that last time the fries were cold, and making up for it with free ones.

For McDonalds, like most forward-looking retailers, the information is already there. As Easterbrook says: “We’ve never had an issue in this business with a lack of data. It’s drawing the insight and the intelligence out of it.”

It’s early days for his Dynamic Yield investment, but without viewing this data through the lens of millions of unique customer journeys, he’s getting nuggets, when he could be enjoying a happy meal.

The post McDonald’s is buying nuggets appeared first on Thunderhead.

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Customer Experience is getting the recognition it has long deserved

In 2018, Thunderhead was named as a Leader in the Forrester Wave for Customer Journey Analytics for the second time. The Wave is comprised of two reports: Journey Orchestration and Visioning. And while I’m an unashamedly proud parent, I also know that this is a hot category, worthy of huge focus from marketers and CX leaders.

The customer experience community is experiencing long-awaited and significant shifts in attention. This is driven in a large part by the digital economy (and the success of new business model innovations such as direct-to-consumer) and the subscription economy. It’s long-overdue.

Back in 2014, Thunderhead was embarking on a journey of our own. At the time it was clear to us that things were changing, brands were struggling to keep up with the pace of technological change and its effects on customer behaviour and expectations.

While hyperbole was abundant, the reality was that no solution existed that genuinely put customers at the epicentre of their own experience. Brands spoke to ‘customer-centricity’ and ‘engagement’ at conferences but were hampered by fragmented technology, departmental silos and legacy infrastructure that was aimed squarely at serving the needs of the brand, not those of the customer.

Meanwhile, we started work on building a framework for understanding what was actually needed to build truecustomer engagement. Our findings, summarised in our Engagement 3:0 Report, are as relevant now as they were at the time.

Don Peppers of TTEC sums it up well: “A customer will create the most value for you at about the point you create the most value for him”

We knew that a fresh solution was needed. And the concept of an ‘intent-driven journey’ was born. At its heart, this is about understanding customer intent as they traverse your brand, and then using this insight to orchestrate the best experience for every individual customer, across their unique journey.

Rather than pushing brand or product to a segment, intent-driven journeys hand significant control over to individuals by recognising their goals and helping them reach these quickly. Hype aside, this is true customer-centricity.

Unconstrained by legacy technology, we needed to develop a platform to connect, understand and orchestrateacross all channels (not merely digital). It would need to be quick to deploy, easy for the business to use and power seamlessly at scale, of course. But crucially, journeys had to be based on the needs of the customer (and not simply the brand).

“A customer will create the most value for you at about the point you create the most value for him” – Don Peppers

To make intent-driven journeys a reality, we needed to set about building our technology from scratch, using the latest that AI and machine learning could provide. This came with challenges; flying in the face of perceived wisdom can be a lonely existence. But we persevered. And thousands of hours and coffees later, the ONE Engagement Hub was launched.

Fast-forward to the Forrester Wave. The Market had woken up to the commercial importance of customer engagement and by association, the role of intent-driven journeys. Crucially, the enabling technology could finally deliver on the promise. So it is little wonder that Forrester provides a seal of approval with its Analytics Visioning and Orchestration Wave reports.

To be a Leader, says their report, capabilities must include:

  1. Data Fusion (the ability to connect unrelated sources of data across a journey to depict a unified customer view)
  2. Journey Design and Planning (the creation of a repository of data-driven journey maps for analysis and behaviour modelling)
  3. Journey Testing and Optimization (testing of journey hypotheses, results measurement and interaction optimisation across journeys)
  4. Journey Automation and Orchestration (Predictive and prescriptive analytics capabilities for automating interactions in near real time)

I’m very pleased to say the market is coalescing around our vision for ONE and based on what we’ve seen over the last six months the most significant growth will be from brands able to harness true journey orchestration at scale.

Salesforce summarised in its 2018 State of Marketing Report: “A staggering 91% of high performers agree that a connected customer journey across all touchpoints and channels positively impacts customer loyalty. Another 89% say the same for the impact on revenue growth.”

The Wave research serves as confirmation that aspiring to “put customers at the heart of what we do” is no longer an empty platitude. Put simply, everything starts with a journey. Looking ahead, we’ll see a cultural shift at the highest level: successful businesses will be asking ‘what does this customer need?’ rather than ‘what are we trying to sell?’ And if you’re onboard, it won’t just your customers that will reap the benefits.

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Glen Manchester, CEO, Thunderhead

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The post CX IS GETTING THE RECOGNITION IT HAS LONG DESERVED appeared first on Thunderhead.

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Customer journeys are changing. Engagement and an optimized customer journey may be core to business success in the retail world, but do utilities really understand what this means?

Can they break out of their public sector past to give customers the service they expect, as Virgin Atlantic or Amazon would?

Many organizations have a dated view of the term “customer journey”. Journeys used to be directed by companies. But now customers are firmly in the driving seat.

What does this mean for how energy retailers engage customers and improve their experience?

And how does an improved customer journey benefit the bottom line?

For this research, we spoke to seven senior leaders and key decision makers at energy suppliers and consumer groups. Input from these individuals was gathered via individual interviews.

The Insight Report from Utility Week, in association with Thunderhead, explores how companies in and outside the energy sector are taking on the challenge of changing customer expectations, how they can improve customer journeys, and the role customer engagement plays in their growth.

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The post Utility Week & Thunderhead Insight Report: Optimizing Customer Journeys in Energy Retail appeared first on Thunderhead.

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The latest Adobe headlines have generated a lot of interest and signal the winds of change in enterprise Martech. We explain why.

In June we commented on Adobe’s acquisition of eCommerce platform Magento at a price of $1.68B. More recently, there have been two further interesting announcements from Adobe: the acquisition of Marketo, and the launch of the Open Data Initiative (in partnership with Microsoft and SAP).

Not surprisingly, the Marketo acquisition generated a lot of interest and comment, not least for the $4.7B value of the transaction.  The Open Data Initiative, less so.

Plugging The Gap

What’s interesting is what it says about the state of enterprise MarTech.

Symbolically, the Marketo acquisition can be seen as closing the book on the old era of MarTech, filling a large B2B marketing gap in the Adobe suite but simultaneously paying a farewell homage to the era of email marketing.

The frontier has shifted. Experience dominates the thinking for most enlightened marketing and CX leaders, with the importance of shifting to understanding, connecting and personalizing the end-to-end customer journey. There is now a focus on what we’re calling ‘engagement-led’ marketing. Without this focus, the ‘customer engagement gap’ will continue to widen and brands relationships with customers will suffer.

Reimagining Customer Experience

The Open Data Initiative announcement looks to this future: “reimagining customer experience” in the era of digital transformation.

To question whether the Open Data Initiative is the right approach, or can be made to work, is to miss the point. This change in approach signals a shift, as key vendors begin to recognize that a new approach to marketing and customer experience in the digital economy is needed.

So what’s taken so long for vendors to get to this point?

The problems – lack of an outside-in customer-centric view, silos, the multiplicity of touchpoints, managing context, understanding the customer journey – have been evident for years.

But it is not just a question of consolidated customer data and insight.

What is absolutely critical is understanding the importance of relationships (rather than transactions) and the fundamental role that value creation and trust play in nurturing valuable, long-lasting customer relationships. It’s a strategic shift to becoming truly customer-driven that’s been talked about by many but delivered by few.

This is the customer engagement paradigm that Thunderhead has been driving for the last five years: the movement to transform customer experience, enabling brands for the first time to understand each individual customer’s intent and orchestrate personalized journeys for millions of customers across billions of touchpoints, seamlessly and in real-time, powering value-creation, trust and brand loyalty.

The winds of change are here and the shift is underway.

By Glen Manchester CEO and Founder, Thunderhead.

The post Adobe Announcements And The Winds Of Change appeared first on Thunderhead.

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We part with 13.4% of our hard-earned wages on our vehicles; young people spend up to 10% of their income on the insurance alone. So it’s little wonder that we really love our cars – and spend more time researching them than any other purchase.

Naturally, dealerships then work hard to win our hearts and wallets. While OEM websites now represent the “biggest single influence to purchase decision”*, dealers continue to play a critical role in the sale experience – according to Auto Trader’s Car Buyers Report 2017, 67% of buyers visited dealerships.

Dealers continue to play a crucial role in the sale: 67% of us visited them on the road to purchase.

Dealerships have historically provided an intimacy, intuition and ability to forge lasting relationships that was only possible through direct human contact. But we live in changing times.

Motivated in part by ‘desktop to drive’ broker sites such as Carwow, Drivethedeal and Carfile, OEMs have been scrambling to own take back ownership of the entire buying journey, offering end-to-end digital experiences. ‘Direct to consumer’ sites are springing up everywhere: Hyundai, Smart and Peugeot, plus (on the Rockar platform) Jaguar, Land Rover, and recently, Ford. Others are in conversations to develop this D2C offering – Mercedes-Benz estimates that 25 percent of its vehicle sales will be completed online by 2022.

Meanwhile, larger dealers are moving in the same direction. Robert Forrester, CEO at Vertu, speaks of ‘end-to end’ online retailing of new and used cars – from research to purchase and finance, plus delivery and signatures: “It’s about making effortless journeys for customers, not complex processes”. Robert believes in satisfying needs, rather than ‘forcing journeys’; for example, providing the option to have entirely online experiences.

“It’s about making effortless journeys for customers, not complex processes” – Robert Forrester, Vertu CEO

The big shift to seamless digital sales is potentially rewiring the role of dealerships in the process. KPMG’s Global Automotive Executive Survey for 2018 reports that:

  • three quarters (75%) believe that nearly half of showrooms won’t exist by 2025 as a result of the move to online auto shopping
  • The only viable option for physical retail outlets will be the transformation into becoming service factories or used car hubs. New car sales will be processed via other, more digital channels. [67% UK dealers agree]

Justin Benson, UK Head of Automotive at KPMG, stresses the importance of lateral planning: “The majority of UK automotive executives are convinced that the only means for dealers to survive is by restructuring into a service factory or a used car hub in the future.

Change is happening quickly [we shared thoughts on connected experiences in a previous post]. And as history teaches, opportunists thrive in turbulent times: OEMs *and* dealers able to deliver seamless, customer-driven experiences across the physical and digital space (adapting operations accordingly) will be well-placed to conquer in the new world.

McKinsey described recently how businesses “will need to determine the best combination of online and offline touch points to shape the customer’s decision making and experience along the purchase journey. The rewards are great for those that get it right.”**

As history teaches, opportunists thrive in turbulent times.

But there’s long road ahead to genuinely achieve customer-driven, ‘seamless selling’.

Even the largest organisations are struggling to achieve even basic personalisation of websites (for example, serving up content based on browsing behaviour or car configurator options, or fed by interactions on other channels). According to Auto Trader’s recent Car Buyers’ Report, 85% knew they would have to spend ‘a lot of time and effort’ to purchase their next vehicle – and 75% of 17-24 year olds were ‘tired of looking around’. In the end, eight out of ten consumers are unhappy with their car because the search and selection process is so complex and confusing that they’ve ended up compromising.

This is compounded by the digital car-buying experience feeling transactional – one client recently described this to me as “like buying a pint of milk”. Forrester’s Q3 Automotive Wave 2018 puts it like this: “The auto brands we reviewed clustered together with little differentiation — they deliver limited and nearly equivalent functionality and user experience. To work their magic, automakers are relying on dealer efforts, not their digital properties, to draw consumers into dealerships.”***

Does digital car buying need a little more love?

There’s clearly a disconnect – and associated opportunity. Crudely, OEMs are prodigious at building brands, yet, as Econsultancy point out, they have limited direct retail expertise. Conversely, dealers are really good at direct relationships – 73% of us prefer their communication to OEMs’, according to Deloitte 2018 Global Automotive Consumer Study. Seamless selling needs to be more aligned – more symbiotic. We need to recreate the intimacy, relevance and flexibility at which dealers are so adept – in an omnichannel environment. Econsultancy put it more succinctly: “there is an opportunity here, for manufacturers to start learning more about their customers”.

We need to recreate the intimacy, relevance and flexibility at which dealers are so adept – in an omnichannel environment.

Easier said than done?

I elicited help from a proper expert: none-other than the best car salesman in Britain!

Jamie Watts, Sales Manager at Murray Volkswagen, won Sales Manager of the YEAR at the 2018 Motor Trader Awards. So when it comes to selling cars, he really knows his onions.

Jamie Watts, Sales Manager of the Year 2018.
He knows a thing or two about giving customers great experiences.

Jamie is charming of course, but what’s surprising is how he speaks more like a marketer than a salesman. We discuss his Social targeting strategy; how he researches passion points of the local community to leverage specific product benefits and create associated events. How broadcast media is often so imprecise that it often creates confusion and a barrage of cold leads (Jamie has ideas on how to fix this, too). And similar to Robert Forrester, he describes his role in sales as “Removing barriers…my role is ultimately to minimise effort for the consumer”. Fascinatingly, this resonates with terminology we use at Thunderhead in describing customer-driven journeys – clearly, our worlds are already colliding.

Working with a designer, I asked Jamie to visualise the ‘ideal’ selling experience from his perspective.

Perhaps the view of a salesman – someone who develops exceptional personal relationships – would resonate as we consider multichannel customer buying experiences?

Here’s the output:

ZOOM to view! (Or open in a new tab)

It was thought-provoking; Jamie’s visual would not be out of place at a customer experience workshop. He was at pains to point out that we should take it with a pinch of salt: “people follow their own paths, and some take much longer than others, so we need to be flexible”. I couldn’t put it better myself: clearly, brands able to recreate this philosophy and approach in a multichannel environment, at scale, will be doing something very right.

Salesman’s view: “people follow their own paths, and some take much longer than others, so we need to be flexible”.

The simplistic, linear and idealised buying journey planning on which we’ve become reliant**** has changed radically in recent years, powered in part by technology. ‘Customer-driven’ journeys are providing unforeseen levels of responsiveness, fluidity and empowerment for automotive consumers, enabling them to purchase in ways that best suit their individual needs. So, as the market evolves at pace, vehicle purveyors will need to transpose the goodness offered by dealers across all channels – and at scale. Because amidst the upheaval, one thing won’t be changing anytime soon: customer engagement is the key to unlock business value.

If you need advice on seamless journeys, creating better automotive customer experiences across all channels (or need a stunning new car),  Jamie’s probably a good place to start…

Or, if he’s busy doing the day job at Murray Volkswagen, do get in touch with me – I’d love to hear from you.

By Fernando Barretto, Director, Automotive Sector, Thunderhead.

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References:

*31% – Deloitte: Navigating the customer journey – UK perspectives from Deloitte’s Global Automotive Consumer Study

** McKinsey – The Road to 2020 and beyond: What’s driving the global automotive industry?

***European Auto Brands’ Sites Don’t Meet Customers’ Evolving Expectations, August 29, 2018
Authors: Brendan Miller, Alex Causey with Christopher Andrews, Pascal Matzke, Jeremy Swire, Scott Ross and Amanda Chen

****Loosely: Paid advertising, website – brochure – direct communications – research – dealer – test drive – sale!

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Iresa’s demise reminds the Energy Sector: Beware the Wrath of the Customer

The demise of Iresa last month came as little surprise to those familiar with its short history. I can imagine it’s been a tough two years for the company, founded on “a passion to build something special.”

Special is certainly one way to describe Iresa’s fortunes. The company was forbidden by Ofgem from taking on new customers in April 2017, again this March and in June 2018, that ban was extended indefinitely. Yet, after a formal investigation and repeated warnings, targets still hadn’t been met.

Ofgem’s patience had run out.

And just like that, its spark was extinguished. Iresa was an ex-Energy provider.

Iresa’s energy prices were among the cheapest. Pundits had warned that these were commercially unsustainable, especially considering market pressures from a year of rising wholesale energy prices. With this in mind, the business’s competitive pricing was perceived as an investment: a ploy to boost acquisition and support future trading. But this was a risky strategy, especially without minimal standards of customer experience. When push comes to shove, low prices and low service may be bedfellows, but customers have a limit.

Iresa’s email to one of my colleagues – he glibly described this communication as “the first time they got in touch with me in over a year”

If you’re at a loose end, peruse the outpouring of passion on TrustPilot or exchanges on Iresa’s Twitter feed and you’ll get the idea – we are not exactly dealing with 90,000 happy campers. Clearly desperate, one customer took matters into his own hands and set up an unofficial Facebook page to provide a home for collective venting: Iresa Unhappy Customers

When push comes to shove, low prices and low customer service may be bedfellows, but customers have a limit.
Iresa scored an average one-star on Trust Pilot with 1,312 reviews. That’s 1.5% of its base mobilising to share poor experiences.

Clearly, customers were at the end of their tether – and their compulsion to share didn’t stop at Social Media and review sites. Iresa received the worst complaints score ever recorded by Citizens Advice at more than 9,000 per 100,000 customers (five times higher than Toto Energy, who received 1,800 complaints). And this year alone, the Energy Ombudsman accepted a total of 2,282 complaints about Iresa for investigation.

So, how could things have got this bad?

There were various contributory factors. Significantly higher Direct Debit paymentswere taken without warning, even when customers had diligently provided their monthly meter readings. [disclosure – my colleague was one of these unpleasantly surprised customers]. Equally, credit balances were not returned appropriately. And then, there was virtually no mechanism to complain, since average call times were huge – callers were commonly placed at “seventy in the queue”

Reading the breakdown of specific complaints, it appears that not only was the service shoddy, but resolution also failed: complaints were not addressed swiftly or satisfactorily. In the end, Iresa had fallen into the enticing trap of prioritising acquisition over retention. To paraphrase the words of many, Iresa’s customer experience was appalling.

With this in mind, it seems logical that Ofgem has selected Octopus as the victorious bidder for The Supplier of Last Resort (SOLR), transferring over Iresa’s entire customer base. Octopus – another recent upstart, was founded with a very different focus: happy customers. This is not hyperbole; Octopus scores five stars on Trust Pilot and are a Which ‘Recommended Provider’.

Octopus’s introductory customer email didn’t pull punches

I spoke with Greg Jackson, Founder and CEO, Octopus Energy – and he was refreshingly candid about the situation:

“The decision to take on Iresa was the scariest since the decision to actually start the business. Our hope is that we can take a group of customers who’ve often had a poor experience and impress them with a good one, but the risk is that we fail to handle the “mess” of the collapsed business and that we end up with chaos, followed by big customer losses. Fingers crossed that ‘fortune favours the brave’, rather than ‘fools leap in’… 

We’re working unbelievably hard to put ourselves in the customer’s shoes as we address the urgent issues of getting customers onto functioning energy accounts, and then help them smoothly and painlessly finalise their financial balances…”

“The decision to take on Iresa was the scariest since the decision to actually start the business…We’re working unbelievably hard to put ourselves in the customer’s shoes” – Greg Jackson, CEO, Octopus

Inheriting close to 100,000 new customers and an administrational labyrinth, Octopus will be under pressure to deliver on its promise; as the old adage goes, you win a customer on price – but lose them on service. Trust, the cornerstone for relationships, is easy to lose and difficult to win back – and Iresa’s customers will arrive with their arms figuratively folded.

Will something good come from Iresa’s passing?

Lessons are being learnt as perspectives change. Even the intermediaries, vilified by some brands for the subsequent ‘race to the bottom’, are themselves reconsidering the importance of long-term customer experience over short-term incentivisation, as seen in MoneySuperMarket’s new strategy. Who’d have predicted this, five years back?

On reflection, Ofgem’s previous demands on Iresa read more like a beginner’s guide to producing an Energy customer SLA:

  1. Extend its call centre hours
  2. Bring the average call-waiting time to below five minutes
  3. Respond to customers who request a call-back by the end of the next working day
  4. Respond to customer emails within five working days
  5. Clear the backlog of customer emails
  6. Record all expressions of dissatisfaction from customers
  7. Identify all vulnerable customers and offer to put them on a priority services register.
As the old adage goes, you win a customer on price – but lose them on service.

While simple in principle, these aspirations can be tricky at scale. Even the big, established players struggle to prioritise and effectivelyservice vast volumes of customers. At best, failure impacts cross-sell – and, well, we’ve just seen what happens at worst.

Much of this is solved by culture and Board focus – the oft-stated desire to ‘put customers at the heart’ must be more than empty platitude. Focussing too hard on acquisition comes with risk; like many businesses, Iresa didn’t appear to think about life beyond the honeymoon, or view the customer journey from the customer’sperspective.

Furthermore, since customers have complex, individual needs and traverse an increasing multitude of channels and touchpoints, customer-focussed technologyis also crucial. Ideally, this means a central hub to listen, understand journeys, act and ultimately, support long-term business growth.

The times, they are a-changin’

The Energy Sector is experiencing more change than ever before. EDF’s MD of Customer Business, Beatrice Bigois, recently described the situation: “more progress has been made in the last ten years than the previous hundred”.

On one hand, more suppliers mean more choice, at least according to Ofgem. They claim to have “successfully supported” consumer choice by boosting supplier numbers (from 27 in 2014, to around 70 today). But with the recent demise of GB Energy Supply, Brighter World Energy, Future Energy and National Gas and Power (in debt to the tune of £200k), Ofgem will be more sensitive than ever to the idea that with the delivery of great power comes great responsibility [Note to editor: apologies for a terrible pun].

Sure enough, measures are being put in place: Ofgem had already been considering making it harder for new challenger companies to enter the energy market, citing concerns over poor customer service and lack of financial resilience. But amidst the fluctuation, one thing remains consistent: putting customers first should be an Energy business’s number one priority.

Photo: Matthew Vickers/LinkedIn

Matthew Vickers, chief executive and chief ombudsman designate, Ombudsman Services, echoes this view with clarity. Speaking recently in Utility Week*, he said:

Put the consumers at the heart of everything…Price will always be a major factor in any purchasing decision, but if consumers are more savvy in the future – for example by looking at customer service as well as price – then the Iresa story will at least have one positive outcome.”

I couldn’t agree more.

And equally, Energy providers are clear that they cannot afford to consider their customers as an afterthought.

*Utility Week, 2/8/18

Lloyd Buxton, Energy Sector Director, Thunderhead

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Consumer Data Protection is seeing the beginning of a global domino effect which started in May in the EU, and has now travelled to California, USA. If you’ve got any customers in the EU then you’ve been subject to GDPR legislation. The California Consumer Privacy Act has just become law in the US State of California. Now the taper has been lit it’s only a matter of time before this State Law, or the ethos behind it, becomes national Federal US law.

There have been numerous catalysts to the chain reaction getting started, but the most infamous was the Cambridge Analytica case. However, the groundswell of consumer data protection has come from the more savvy and empowered consumers themselves. The regulation is a reflection of what consumers see have become their human rights, so brands who push against this tide are only going to further undermine consumer trust.

While regulation is a stick to beat reluctant organisations into line on personal data protection, enlightened brands will look beyond the compliance issues and see an opportunity to rebuild consumer trust through organisational change.

Legislation to protect consumer data is a good catalyst for brands to reexamine how they approach customer relationships, and the opportunity to create value – for brands and the customer – by moving to a business model that puts customer engagement at its core. In other words, legislation is an opportunity for organisations to refocus on the customer, restoring trust and value to the relationship.

“The Consumer Privacy Act will allow consumers to take control of and make informed choices about their own data, control that fosters a healthy relationship to technology and overall digital well-being,” said Elizabeth Galicia, from Common Sense Media, which co-sponsored the bill in California. What she’s talking about here for brands who embrace the act is a healthy relationship with customers.

“The Consumer Privacy Act will allow consumers to take control of and make informed choices about their own data, control that fosters a healthy relationship to technology and overall digital well-being”

Disappointingly some big brands (Facebook, Google, Amazon, etc) formed an alliance to try and oppose the new law in California being passed. The fact it was passed in the face of their opposition is a clear signal which way this tide is turning.

There are differences – and some would argue the new Californian law doesn’t go far enough. The new law only targets bigger businesses (those who have data records on over 50k consumers) whereas GDPR is focused on all consumer interests, no matter how small the organisation they’re interacting with.

The other major difference is the penalty. Companies who violate the Californian law could be penalised up to $7,500 for each violation, paltry compared to GDPR infringement (max fine of €20m or 4% of the company’s global turnover), and perhaps a cost some stubborn short-sighted brands will be willing to take a hit on rather than change.

Either way, for brands resisting this change, the longer-term cost will be to break consumer trust and undermine customer relationships, which has to far outweigh any operational cost of managing the implications of the regulation.  Trust is a key element of customer engagement and building consumer trust has become a top priority for many CEOs. Forward-thinking brands are taking the operational impacts now to build long-term, sustainable ways to ensure the consumer is at the core of everything they do, which includes how their data is protected and managed.

Are you ready? Don’t you want to be reassuringly ahead of this tide change?

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References:

https://www.theguardian.com/us-news/2018/jun/28/california-privacy-bill-data-harvesting

https://uk.reuters.com/article/us-california-privacy/california-lawmakers-approve-data-privacy-bill-opposed-by-silicon-valley-idUKKBN1JO35Y

The post Consumer Data Protection Chain Reaction appeared first on Thunderhead.

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2 Minute Read

Our research* indicates that taking account of a customer’s personal context and situation, preferences and expectations to shape and manage each interaction is an important component in building trust between a business and its customer. Context is King. A key pillar of true Customer Engagement is being able to see, understand, and act on in real-time the whole, bigger picture of Customer Context. Without context, you can’t see the wood for the trees.

Here’s a couple of examples of the risks of not seeing the context around data:

Seeing the Context Saved Lives

In WW2 the US didn’t want their bombers to get shot down by enemy fighters, so they wanted improve the protective armor. But armor makes the plane heavier, and heavier planes are less maneuverable and use more fuel. The US military believed they could get the same protection with less armor if they concentrated the armor on the places with the greatest need, where the planes are getting hit the most. This was done by analyzing bullet hole damage on the returning bombers to figure out where they should optimize the armor. That is, until it was pointed out that they were analyzing the wrong planes, the survivors: it was the planes that didn’t return that they should be thinking about.  Returning planes had fewer hits to the engine, but planes that got hit in the engine weren’t coming back. The armor didn’t need to go where the bullet holes are; it goes where the bullet holes aren’t, on the engines. Cut a long story short, more armor on engines. The same data viewed from a different context takes on a profoundly different meaning.

“The same data viewed from a different context takes on a profoundly different meaning.”

Costly Football Data Blindness

Another example: during his tenure as manager of Manchester United football club, Sir Alex Ferguson made, what he later described, as the biggest mistake of his managerial career by selling his star defender Jaap Stam to Lazio. Opta (an analytics company) data showed Stam was making fewer tackles, which Ferguson interpreted as a decline in Stam’s performance. The reality however was the lower number of tackles was a sign of improvement; Stam was losing the ball less and intercepting more passes, so he didn’t need to make as many tackles. Stam went on to be Lazio’s star performer, all because of a decision based on looking at his playing data in isolation.

So what’s the risk? Customers that receive information that is inaccurately targeted or inappropriate for the individual’s context (such as offers of joint bank account for individuals that are single, or sales calls shortly after a customer complaint) is a common bugbear. A majority (87%)* are clear that this type of mistake makes them feel negatively towards the company concerned.

“87%* of customers who receive information that is inappropriate for their context feel negatively towards the company concerned”

Data without customer context and journey insight is of limited value and can lead to the wrong interpretation; you need to see the whole picture and discover customer intent. Reading data in isolation is risky, and potentially very costly. You need the complete frame to draw the right conclusions, which when it comes to interpreting customer data means you need to understand the complete context.

People talk about the power of hindsight, and similar to Sir Alex, what would they do differently if they knew yesterday what they know today. The point about this is you’re analyzing through a rear-view mirror, and things today will have changed. The point about understanding context is you don’t have to wait until tomorrow to understand what’s happening today, you can do it in the moment it’s happening – and make the right choice here and now.

5 Elements of Customer Context

Context is one of the key pillars of customer engagement. Businesses need to provide a tailored, adaptive and often predictive experience informed by context. There are at least five key elements making up the customer context:

  1. Customer profile: This is understanding who your customer is, and as they engage more and more with you their profile will adapt and evolve. Understanding these elements will enable you to orchestrate personalization.
  2. Customer history: They will also have a history of behavior, of interactions, which you’ll also need to understand. Understanding these elements will enable you to orchestrate personalization.
  3. Journey status: knowing what journey stage a person is at, if they’re going forwards or backwards or have even dropped out.
  4. Location: key to understanding the customers situation at a particular time is location, which can be geographical but also relates to the channel they’re in, at what time.
  5. Device: This is understanding how they are technically interacting, if they are using a mobile device or desktop for example.

Understanding all of these different aspects of customer context informs an interaction that can then be contextually appropriate for the customer, so their next interaction can be personalized and relevant, and packed with as much value for the customer as well as your brand.

In the always-connected mobile and social world of today – the digital-era – real-time context is the key driver for understanding and shaping interactions, and increasingly determines the value of those interactions.

What can you do?

To always know your customer’s true intent, and then take the right action at the right time, you can’t ignore context. You need to be able to pick up every customer signal across all channels and touchpoints. You need to understand in-the-moment context for each customer and take the relevant action immediately in the context of their journey, not just the moment.

Get Started with Understanding Customer Context

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References:

* Engagement 3.0 Research Report – conducted by Populus and Esteban Kolsky for Thunderhead

The post Customer Context is King for Engagement appeared first on Thunderhead.

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(4 Minute Read)

 In 1913, Henry Ford introduced the moving assembly line to a burgeoning automotive industry, revolutionizing global manufacturing forever. Inspired by an overhead trolley used by Chicago beef packers, the integrated process simplified the assembly of the Model T’s 3,000 parts by creating just 84 discrete, connected steps. These were performed by small groups of workers, assisted by a single rope pulling each chassis along the line. Incredibly, this single innovation compacted the vehicle assembly time from 12 hours to 90 just minutes, enabling labor costs (and crucially, vehicle price) to be radically reduced. The rest, quite literally, is history.

The Integrated Moving Assembly Line: Components move; workers don’t.
Over a century later, it’s peculiar that our data and marketing technologies aren’t more harmonious or impactful

Given the immediate success of Ford’s collaborative assembly line, it’s peculiar that over a century later, our data and marketing technologies (whose fundamental role is to connect every department of an organization) aren’t more harmonious or impactful.

For a host of good reasons, Original Equipment Manufacturers (OEMs) and dealer networks often operate distinct marketing and CRM tools, unable to connect customer insight between themselves – or across their channels and touchpoints. Add to this the common wrangles over ‘who owns the customer once they’ve driven off the forecourt’ and Ford’s utopian vision of connected manufacturing seems distant indeed.

It all adds up to missed opportunity; connecting, understanding and acting on shared information clearly helps marketing, sales and service to perform more effectively, driving business growth. Given the combination of market pressures we face, the industry must capitalize on every available asset, working to understand ‘leads’ as people with individual requirements and preferences.

You might recognize this scenario:

 Of course, the reality of these circumstances is usually less binary. And fortunately, it’s all resolvable:

  • In our experience, OEM’s are indeed generating a myriad of leads. However, these prospects are often in the early stages of researching – and will need some warming up to reach conversion – the more we understand ‘leads’ as people, understanding their intent and how to meet their needs during the buyer journey, the more impacting we can be.
  • There is usually major scope for the OEM to increase prospect engagement, especially by improving continuity between digital channels (or call center) into the physical world (dealer). This is about driving more insight-based, contextual intelligence to empower dealership sales staff.
  • Typically, dealer network software – or lead-sharing tools provided by OEMs – do not serve up nuggets of customer journey insight that can be crucial to conversion.

For example:

What (exactly) has the prospect reviewed online?

Have they looked at service plans or financing options?

Is there a P/X in the equation?

And, based on agreed principles, how ‘hot’ is the prospect – where should staff invest the most effort?

Unsurprisingly, many organizations believe that due to opaque objectives, unmanageable data sources, technologies and channels, solving the conundrum of ‘connected experience’ is too costly and laborious. Often, it’s perfect fodder to be kicked into the long grass.

But joining the dots is not as difficult as you might think, and it’s certainly worthwhile. The provision of data-fueled customer experiences is particularly well suited to the (typically longer) automotive sales cycle, positively impacting NPS/CSAT scores, cross-sell efficacy and LTV.

So, how can we be more ‘connected’ – more like Ford’s Assembly Line?
  1. Listen to consumer intent signals, ‘from domain to dealer’

People navigate based on their intentions – whether that’s configurating a vehicle, comparing finance offers or researching servicing FAQs. By joining up the signals your customers emit as they traverse the associated touchpoints (for OEM and dealership), you’ll uncover a world of untapped insight.

According to a recent report by Deloitte*, OEM websites have the most impact on purchase decision, while 71% rated customer experience as the most influential factor in their choice of dealer. So, given that a third of us spend less than a month researching (70% spend less than three months) before purchasing a vehicle, there’s little time to lose in extracting, connecting and mobilizing this intelligence across our channels to inform standout, seamless customer experiences. Don’t let those fish swim away!

Thunderhead ONE helps automotive brands understand, visualize and act on customer signals, developing profiles in real-time.
  1. Understand the insight – and Act on it

Deciphering the unified information, automotive manufacturers and dealers can customize content across their channels to stimulate (or reignite) engagement, guide call center and sales staff and critically, score (prioritize) incoming prospect conversations. Under pressure to meet their increasing targets, sales staff are being empowered to separate the wheat from the chaff a whole lot quicker.

Sales staff are being empowered to separate the wheat from the chaff – a whole lot quicker.

Guided by technology, delivering consistent experiences across channels typically involves the customization of an OEM website or digital communications. Triggered by a significant event, such as interaction with a car configurator or test drive completion, the ambition is to encourage customers along their individual journeys. And while the principle is simple, it delivers in spades: we’ve seen this improve like-for-like car sales by over fourteen times (1400%).

Stepping up a gear, a dealer can also couple its sales and servicing insights. This unlocks further opportunity: providing the most appropriate courtesy car for a customer, suggesting specific accessories or warranty offers, or booking in a weekend test drive. Things get really interesting when we harness the signals to identify potential risk, cutting danger off at the pass. For example, a customer navigating to the ‘How to make a balloon payment’ section of your website FAQs is an alarm bell that should be shared with dealerships – who can then proactively pick up the phone.

  1. Your auto data will unlock even more in the future – think about it!

Automotive OEMs are collecting masses of data, not just through the CRM and dealership channels but the technology within its vehicles. But currently, only a fraction of this is being mobilized – and several manufacturers are wrangling with the prospect of what this could mean for them in the years to follow. This is logical; McKinsey predicts that networked cars will increase by 30% each year: “by 2020, one in five cars will be connected to the Internet**.

Applications might include:

  • Specified warning lights trigger an alert to dealer networks to make contact – and order appropriate parts to remedy a situation
  • Telemetric data provides insight that a particular diesel driver tends to make shorter, urban-based journeys. At the next service, their dealer could suggest that EV or petrol would be more cost-effective (or less polluting, depending on the context) and provide a suitable vehicle for a test drive
  • Based on Social output and website journeys, we can already glean sentiment and score the prospect based on many factors (including their need for finance). Setting virtual boundaries around vehicles in a physical showroom then provides the ability to understand customer flow and genuine potential interest by vehicle.

Our customer engagement platform, ONE, has been honed to make a demonstrable difference to the automotive industry and it’s already been implemented for several major OEMs. Fusing disparate data sources, ONE harnesses connected insight to deliver consistent, cross-channel customer experiences. And being ‘light touch’, ONE can be implemented (and delivering business results) within a matter of weeks. [OK, I hear you say; enough of the sales spiel.]

We should be reassured by the fact that the one thing that consumers value most – a great experience – is within our control.

The automotive sector is facing a tough time for many reasons, including plummeting R&D costs***, rising interest rates, WLTP, political uncertainty and changing consumer purchasing behavior (such as leasing and falling diesel sales).

Long story short, the industry’s feeling the pinch on its (already tight) margins.

What’s reassuring is that the one thing that consumers value most – a seamless, informed experience – is within our control. The data fueling it is most likely in our hands, waiting to be connected and put into action. So it makes sense that creating value from available data is the biggest priority for todays Automotive CEO. As Ford did over a hundred years back, we now need to connect our assets, minimize complexity and facilitate continual innovation to succeed at this challenging time.

Article by: Fernando Barretto, Director, Automotive Sector, Thunderhead.

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References:

*Navigating the customer Journey – UK perspectives from Deloitte’s Global Automotive Consumer Study 2018

**McKinsey: The road to 2020 and beyond – What’s driving the global automotive industry?

***In its Global Innovation 1000 Study2, PwC Strategy& calculated that investment in this field could fall by 19% by as early as 2020

The post How to unlock better automotive customer experiences appeared first on Thunderhead.

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Now is the time for Building Societies to reinvent their “Customer First” philosophy for the digital era

As mutual organisations co-owned by their ‘members’, building societies are a very British institution, don’t you know. They formed in seventeenth century Birmingham with the aim of providing members with support to purchase a home – and were so sincere in this purpose that they literally ‘terminated’ once all members owned a property. Part of a local movement to foster innovation and economic success, these societies were considered radical – far removed from the received wisdom that profit should be the key force driving financial institutions.

Birmingham 1770s Built Street

While much has changed, this fundamental delineation remains today. Building Societies are still genuinely focused on their members, driven by long-term relationships and attending to their members’ needs. Of all the industries, they have a very genuine association with customer engagement – and are uniquely placed to achieve this.

Of all the industries, Building Societies have a very genuine association with customer engagement– and are uniquely placed to achieve this.

Under continual pressure from high street banks (whose clout stems partly from their scale and reach) and sprightly new market entrants, engagement is easier said than done. Most building societies are geo-centric, with loyal local bases driven by local branch networks and a very personalised service. Associated costs are relatively high, so naturally, the industry is planning sustainable growth through complementary digital customers. And of course, these new online experiences must align with those provided so brilliantly ‘in branch’.

Whatever the channel, we’re really talking about achieving customer engagement. So, considering the trust issues surrounding financial institutions, we see a golden opportunity for building societies to deliver on a promise made long ago…

What does it mean to put members at the heart of a modern, digital organisation?

Building societies have done exactly this since 1775; technology may have changed, but fundamentally, people haven’t.

We break it down like this:

Our Customer Engagement Platform, Thunderhead ONE, has been built from the ground-up on these four well-trodden principles. By understanding the members’ needs and intentions (‘true intent’), ONE delivers long term relationships through highly personalised digital (and offline) experience. For building societies, ONE serves as the agent catalysing their brand promise to ‘put customers first’.

Of course, the numbers support the theory – customer engagement directly correlates to business growth. Forrester’s The Digital Banking Imperative report stresses the importance of owning the customer relationship across channels: “Personalisation will play a crucial role in next-generation experiences that enable financial well-being — and, as a result, improve business outcomes.”

A ten per cent increase in customer satisfaction can increase loyalty by 30%

 According to the Institute of Customer Service’s UK Customer Satisfaction Index, a ten percent increase in customer satisfaction among the 253 organisations surveyed impacted loyalty by +30% and trust to the tune of an astonishing +48%. Banks and building societies where customer satisfaction was above the sector average were rewarded with an average 5,492 net account gains (compared with a net loss of 3,407 for everyone else). In summary, “Performing consistently better than the sector average for customer satisfaction is key to sustainable financial growth.”

“Performing consistently better than the sector average for customer satisfaction is key to sustainable financial growth.”

Of course, consumers are increasingly savvy and may well be skeptical of financial organisations attempting to engage. According to PwC’s Retail Banking 2020 report: “Customers are demanding ever higher levels of service and value. Trust is at an all-time low”. Fortunately, since building societies are not tarnished with quite the same brush as the rest of the industry in this area, customer engagement initiatives typically see greater impact for the business. Together, tailored services, personalised and timely conversations and empathetic staff (fuelled by up-to-date intelligence) all ladder up to significantly improved customer engagement (and NPS).

Jonathan Davidson (Director of Supervision – Retail and Authorisations at the FCA), describes customer relationships as an industry priority. At the recent annual Building societies conference, he laid out the opportunity for building societies to:

  • “embody the values of membership and long-term trust-based relationships
  • know their members and the local community personally
  • understand consumers as individuals rather than as archetypes in a risk-scoring model”

Engaging with members may sound complex and overwhelming, but with the right team (and tools) it’s eminently possible to demonstrate a proof-of-concept to the business [Listen/Understand/Act/Impact] within a matter of just 12-15 weeks. We’ve done it, many times.

The culture of putting customers first is already in place. It’s been in the blood for over 250 years.

And fortunately, for many building societies, the culture of putting customers first [which alludes many organisations; here’s a handy ebook if you fancy a little further reading] is already in place. It’s been in the blood for over 250 years. The ability to operationalise and deliver customer engagement at scale should now be the immediate focus, preparing building societies for the next 250 years to come…

Article by: Tom Huxtable, Director, Building Societies Sector, Thunderhead.

References:

The Digital Banking Imperative Vision: The Digital Banking Strategy Playbook by Peter Wannemacher and Jacob Morgan March 21, 2017 – https://www.forrester.com/report/The+Digital+Banking+Imperative/-/E-RES135946

https://en.wikipedia.org/wiki/Midlands_Enlightenment

https://en.wikipedia.org/wiki/Ketley%27s_Building_Society

https://www.instituteofcustomerservice.com/research-insight/research-library/ukcsi-the-state-of-customer-satisfaction-in-the-uk-january-2018

https://www.fca.org.uk/news/speeches/building-societies-and-future-retail-banking

The post Building Societies: the Original Experts of Customer Engagement appeared first on Thunderhead.

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