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Using Big Data to Personalise Customer Experience

23 July 2014

One of the best companies I know at handling a massive amount of data is Tesco. It is terrifying how much information they know about their customers, but it enables them to tailor their offering specifically to suit an individual’s needs. Think about how tailored the Clubcard vouchers are to your particular shopping habits? Tesco know you so very well! In fact, in the book “Scoring Points. How Tesco Continues to Win Customer Loyalty” by Humby, Hunt and Phillips, they describe a situation where a married man was revealed as an adulterer thanks to the associated vouchers that were being sent to his wife! Note to all potential and current adulterers. Step away from the clubcard.

Tesco has never been shy of collecting data and using it to secure customer loyalty. In fact a researcher who used to work in the Lean Enterprise Research Centre and was responsible for many supply chain innovations in Tesco, told me that one of the main reasons that they were so keen to explore online shopping was that it was the first opportunity that they had to really explore where and how they were disappointing their customers. Let me explain…
Tesco know that in order to secure customer loyalty, they must be extremely reliable, never disappointing their customers, constantly delighting them. So imagine the scene, you go into your local Tesco store to buy some posh mince pies, there aren’t any, so you leave, frustrated, and go to Waitrose. When you’re there, they have some nice mince pies, you buy them, and at the same time you notice that they also have a lot of other good products, you like the layout of the store, and the whole experience is great, so you decide you’ll go back shopping there next week.

That’s precisely the sort of situation which terrifies Tesco. They’ve lost a customer, just because they didn’t have the mince pies there when you needed them. They are obsessed with making sure they can provide the entirety of your shopping list, when you want it, where you want it. But how could they collect the data that they needed to understand where and how they had let you down in that scenario? You simply walked out of the door empty handed? You didn’t tell anyone that they didn’t have the mince pies you needed. You silently left, frustrated and subconsciously looking for somewhere else to plant your loyalty.

Online shopping gives Tesco that opportunity. By purchasing online, they suddenly have visibility of your shopping list. It’s no longer simply a scrunched up piece of paper in the bottom of a shopping trolley. They now have the data they need to know how capable they are to fill up your shopping basket.

I find that fascinating. That a company is that keen to collect data on how well they are doing at meeting their customers’ needs, that it drives the move into a whole new business model.

How aggressively are you collecting data on all of your customers? Are you developing new innovative ways to capture how happy they are with your services and are you designing new services in order to explore their wants and desires? For companies to stay competitive and survive, I believe it’s essential to invest in such activities and the biggest and best companies do so relentlessly.