There are some terms in the retail marketing tech world that get tossed around and around, and everyone is sure they’re important, but not everyone agrees on what they actually mean. So today we’re hunting and swatting buzzwords.
Last week, we separated the wheat from the chaff with regard to the definition of Customer Journeys. Today, we’ve got our threshers aimed at all the things that supposedly comprise a 360-Degree View of the Customer.
What it is:
- The idea that aggregating cross-channel data on each customer will allow marketers to provide customers with a unified and relevant experience across all channels.
- A single, end-to-end picture of the customer’s journey and experience with a company, and how they felt at steps along the journey.
- A lot of work.
What it’s not:
- As of this writing, a 360-degree view of the customer is not easy, efficient or completely necessary to achieve the goal of delivering a unified and relevant experience across all channels.
- It’s also not widely adopted; according to Gartner, fewer than 10% of companies have a 360-degree customer view, and only 5% use this view to systemically grow their businesses.
What it sounds like:
- A virtual reality training module for customer service employees.
- A capitalist panopticon
NOT ALL DATA IS CREATED EQUAL
The idea of pooling, cleansing, and stitching together all of your many disparate data sources into a single cohesive 360-degree view of each of your customers seems like a valuable capability. Brands are right to try for a holistic customer profile. If you want to achieve high-value business objectives like reducing attrition, then a longitudinal look at all of your customers will help you understand who is fading away and why.
But you don’t need a complete view of each of your customers to get started.
If a 360-degree view were as easy as flipping a switch, we’d say sure, go for it. But it’s a labor- and resource-intensive initiative that operates with the implicit misunderstanding that all data is equally valuable. Doubling or tripling the number of data sources doesn’t double or triple the value you’ll be able to glean and execute on.
The most meaningful data points that retail brands need are right there in their customer files: purchase data. Purchases are the most meaningful indicators of customer interest and intent; it’s the 20% of data that gives you 80% of what you need to know.
It may seem attractive to pull in browse behavior, app usage, display impressions, call center transcripts, and so on, but these are not nearly as valuable. While it’s great to have them, don’t let perfect be the enemy of good.
Start with the most valuable view (behavioral purchase data) and expand from there. It’s a process that should take years because you have to test and learn how to use the insights you’re gathering and build use cases to assess which data sources should be added down the road based on the return on investments they deliver, not on the speculative and vague hope that you can do something with it.
The big existential problems that every retail business faces are things like reducing customer churn, increasing acquisition and retention, reducing over-discounting, and cultivating customer relationships to increase average unit revenue, basket size, and purchase frequency. You can start working on solving these problems with purchase data and the right statistical models that use the data to predict future behaviors.
As you make progress on these goals and get more sophisticated in your use of the data, you may find you need additional data for a specific tactic. That’s to be expected. But don’t let that stop you from starting today, because it’s more important to see what’s straight ahead for a customer (with predictive analytics peering into the future) than to be distracted by all that’s going on around them.
For some additional insight into this topic, here's Custora's CEO Corey Pierson with his hot take on the misunderstanding that underlies the 360 View.