In this 4-part series of “Figure It Out” blogs focusing on ‘Big data’ in Retail, the Business Analytics (BA) team will outline some new ways that Retail businesses can take advantage of their data using the new opportunities now available from big data.
With the explosion of social media affecting our everyday life, companies need to ensure customer service and customer experience is at the top of their agenda. Any bad customer experience can be spread through the many social media channels in seconds. There have been recent examples where bad publicity can escalate exponentially, creating adverse affects on company’s performance.
- Netflix (a provider of on-demand Internet streaming media) surprised their customers last year by increasing their subscription fees by 60%.
- Netflix customers expressed their disappointment on social media (Twitter, the company’s blog, and the company’s Facebook page). There were more than 5000 comments on the Netflix blog.
- One example: “Would have been nice to have some advanced notification… Thanks Netflix for again taking the time to look out for your customers… I used to brag about you but now I wouldn’t recommend your service to anybody.”
- The customer service lines were bombarded with customers calling to complain, and the customer service representatives were not prepared to explain the situation.
- According to The New York Times, the company lost around 800,000 subscribers as of Q3 2011.
Further details of this story can be found here.
Companies must not only gather customer feedback on a regular basis, but also respond to it quickly, as consumer behaviour can change almost instantly. Responding in a timely manner increases the likelihood that a customer will buy again. They should also evaluate whether or not that action had a positive impact on their customers experience, loyalty and engagement.
Figure 1: Typical customer journey
Companies must ensure that they can “delight” the customer in every part of the customer journey – from initial contact to delivery of goods and finally after sales service. Companies who get it right will survive, thrive and look forward to increased revenue and profit.
Companies who get it wrong must ensure they have action plans to reduce future complaints and get customers back on their side.
The influence of social media as seen from the Netflix example can have a negative impact on customer loyalty and future sales. Conversely, social media can also have a positive impact. Good service to a customer is spread quickly across the social media channels 24 hours a day, 365 days a year.
Figure 2 shows the results of a Polaris survey with the impact that good customer service has on business performance.
Figure 2: Source Polaris Market Research
Using analytics techniques, including text mining, the Business Analytics team can help companies to analyse the high volume of conversations that are happening online, including social media and forums, understand what the public is talking about for your products and services. Most importantly, sentiment analysis enables companies to study customer satisfaction in order to understand fully what customers like or dislike about them in order to respond quickly and effectively. Combining this with customer information, including transactional data, the Business Analytics team can help companies to better understand their customers and identify those who are more likely to leave. This then provides companies with the ability to take appropriate actions to proactively retain the high value customers.
It is up to all companies to decide their strategy for improving customer satisfaction and whether to put it at the top of their agenda. One thing for certain, if they get it wrong it could be one of the last decisions they ever make.