Data is History…

2015-03-25 09.55.23

Yesterday is history, tomorrow is a mystery, and today is a gift; that’s why they call it the present” – Eleanor Roosevelt. Quite a poignant quote when you think about it.

My last blog post focused on Voice of the Customer and how feedback is essential in providing the best product/service to customers. What interlinks with this is data. Whether you work in big or a small organisation, data plays a vital part in helping to deliver success and customer satisfaction.  I will demonstrate this by using my own experience of when I was working in the financial sector and using some hypothetical data to make my point clear.

Collecting Data

Market segmentation is the process of splitting customers, or potential customers into different groups, or segments, within which customers have the same, or similar requirements satisfied by a distinct marketing mix” (McDonald & Dunbar, 1998). The customer types within the bank are Personal, Private, Corporate and Business banking. Each customer type has information stored on them on a database. This information can come from an application form and be added to the database after each point of contact with the customer is made e.g. meetings to ensure the most up to date information is stored. The table below illustrates the information held on the database about a Personal Banking customer.

 Personal Banking Data information Fields
Customer details

Title

First name

Middle name(s)

Surname

Address

Postcode

Is the property a flat?

If you have lived at your current address for less than 3 years, please provide previous address

Nationality

Residential status

Home telephone number

Work telephone number

Mobile number

Email address

Relationship status

Date of birth

Number of dependants

Memorable word

 

Employment details

Occupation

Employer’s name (if applicable)

Employers address

How often are you paid

How are you paid?

 

Current banking details 

Main bank

Approximate date account opened

Type of account

How many credit cards do you have

 

Financial Status 

Bankrupt, sequestrated or been in any court proceeding for debt?

New bank  account 

Card details

Overdraft

Telephone and internet banking

Credit cards

Savings account

 

 

The purpose of holding all this information is to make sure that the right information goes to the right person at the right time in the right way” (Home Learning, 2009). By having this information on the database it also gives the bank an insight into understanding the customer’s relationship with the organisation. The more information the bank has on its customers the more they can get the right message across to meet their needs.

 

Buying into Behaviour

Consumer behaviour can be formally defined as: the acts of individuals directly involved in obtaining and using economic goods and services, including the decision processes that precede and determine these acts” (Lancaster & Reynolds, 1995). By understanding customers specific wants and needs it is more achievable for the bank to make amendments (if needed) to their marketing mix so they meet their customers’ needs with what they have to offer. This can be done by using data they have collated and stored. The table below illustrates what the bank knows about its customers’ needs and how they meet those needs.

 

Marketing mixelement What are your customers’ needs How well does your marketing mix match these needs?
Product Best banking product that meets their needs, value for money. Looking how often the customer gets paid, what they’re employment status is.
Price  Get the best financial product at the best interest rate. The bank undercuts its competitors short term on credit cards offering 0% interest on balance charges for 20 months and 0% interest on purchases for 6 months 17.95% on balance transfers and purchases. Other competitors offer 0% interest on balance charges for 15 months and 0% interest on purchases for 3 months than after 16.95 APR on balance transfers.
Place  Professional, big and spacious. Less time queuing to be seen by a member of staff. Helpful staff in branch to reduce queues and machines available to transfer and deposit money.
Promotion  Clear and precise information services and products which show what the interest and annual percentage rate is. Points of sale of materials such as posters explaining the interest rate on a mortgage or loan are near the cashier in the branch. Billboards are usually are located in public places for the consumer to see such shopping centres or even on places of transport such as bus shelters.
People  Good customer service – friendly, helpful and knowledgeable staff that are available. Each member of staff has a half yearly review to see how they perform and what can be improved. Daily meetings occur to discuss teams performance as a whole. Productivity sheets are filled in to see how productive members of staff are and if underperforming further training and guidance are accessible.
Process  Easy access to their accounts and information through multiple channels A 650 branch strong network throughout Great Britain. 24 hour telephone banking service not to mention 24 hour online banking. 1700 ATM’s are available mainly in convenient places such as railway stations and shopping centres.
Physical evidence  Information to be tangible and easily accessible Branches have point of sale materials such as leaflets and posters on the walls explaining the products and services the bank offers.

 

Making the right choice?

“A business organisation is a decision-making unit that sets out to produce a product in the form of goods or services” (businesscasestudies.co.uk). By looking at the information held on their database, the bank can use the decision making process as a productive tool in seeing if customers are satisfied at each stage of the process  and at the same time identifying any gaps(if any) in their database.  The table below illustrates this.

 

Decision-making process Customer information What gaps exist in your database knowledge 
Problem recognition  Customer wants to borrow money but is about interest and annual percentage rates How much does the customer spend monthly?
Information search Your Feedback Survey is filled in by 1 million customers and Innovations team use this to generate ideas. Most ideas come from the internal sales team. No direct communication between the product team and customer to know what the customer really wants.
Information evaluation  Sales manager informs Innovation team of what’s happening in the market and looks at competitors. If customer has another account with another financial institution why?
Decision  The team lead from the Innovations team -with information from the Sales Manager, makes the decision on what product to develop and pilot. No formal decision making panel so the customer doesn’t have a ‘direct’ input in the decision.
Post purchase evaluation Customer is contacted by    communication that suits them best e.g. phone, e-mail by the sales team explaining the benefits of the product or service they have purchased. Less communication with internal. Customer has to go to sales and management if they have issues with a product who relays the information back to the Product manager who works with the Innovations team to sort out the issue.

Data Analysis

“The primary need for any company is to access the requirement of the market and then to act accordingly” (Lancaster & Reynolds, 1995). Through the data collated in the above tables, the bank understands its customers’ needs from their residential to financial status. The organization offers customers easy access to their accounts and information through multiple channels that are tangible and easily accessible. However, the bank can collect more data to meet its customers’ needs on a more personal level.

By knowing how much a customer spends by them filling in an income and expenditure form in branch, by post or electronically via the website, this type of information can be vital in meeting the customer’s needs. This is because by knowing their monthly incomings and out goings i.e. how much they earn and spent, the bank can offer customers financial advice and also recommend the best products or service that best suits them. However just like interest rates, customers’ outgoings (and even incomings) can fluctuate so this type of information may be hard to store on the database and keep up-to date.

A gap that is missing in the bank’s database is direct communication between the product team and the customer. If the customer has an issue with a product they have to relay the information back to sales and management. The information in a sense is secondary as it is not coming directly from the customer but from sales and management who are effectively acting as an intermediary between the end user and the decider.  If a text message facility was put in place this would give direct contact between both parties. However this facility could be an expense in regards to money and time. This would then raise the question whether or not this feature would outweigh the benefit.

 

In conclusion, the way in which the bank collects data to understand its customers’ needs is an effective one.  However, by relying on surveys such as the Your Feedback survey filled in by 1 million customers is quantitative data when the bank could also use more qualitative data. Holding half yearly or yearly focus groups with customers, colleagues from Personal, Private, Corporate and Business banking and members from the Decision-making Unit to discuss issues and ideas could give the bank a real and ‘direct’ insight into their customers’ needs which undoubtedly would be vital information to have stored on the database.

When looking back at the opening sentence of this post, data does indeed make history. Whether it is from yesterday, tomorrow or today it helps tell a story of how it can be a useful tool in knowing your customer and satisfying their need.

 

Emmanuel #EKsMarketingViews

 

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