Live from InterACT: Customer Centricity in Action: Best Buy
I am attending InterACT San Francisco 2007 this week and blogging live (or nearly live) from the sessions. This session is "Customer Centricity in Action: Best Buy" being presented by Fair Isaac and Best Buy jointly. Customer centricity has some core concepts:
- Choose which customers to focus on
- Clear, insightful customer segmentation
- Winning value proposition for targeted segments
- Deep alignment across the enterprise
- Define and track key segment metrics
- Process for continuous learning
You need to integrate across the enterprise, every message through every touchpoint and in measurement too. Customer-centricity is a journey not a product.
Over to Best Buy who gave some company history and described how they have 1,000+ stores in NA and 80% of the US have exprienced Best Buy - not about customer acquisition but about growing existing ones, especially since the best customers drive 4x the revenue of an average one. To deal with this, Best Buy started with a 360degree view of their customers - a single customer data base. Multi-Dimensional Customer View based around various segmentation approaches. The demographic one (Buzz, Carol etc) continues to evolve while others cover attitudinal, customer value, ability to buy, technology adoption, channel preference and so on. All of these evolve. What they learned from this was driven into value propositions and ways to manage the business e.g. Magnolia, high-value audio/visual, is now in 300 stores for instance. Different demographic segments get different store facilities and styles. Store layout and review now very customer-centric not operationally focused. Finally changed outbound marketing away from Mass with a small amount of personalization to more balanced Mass/Mass Personalized/Personalized.
What was missing in all this was the context to tie all this together. Did not have a way to consider the interaction of multiple personas, employees interacting with the personas. Did not handle holistic treatment of the website and rewards and everything.
Good time to focus on personalization as customers becoming more individual and less concerned about fitting in. To do this, focused on knowing a customer, showing they know a customer and then showing they value those customers. Had to make some changes to Reward Zone loyalty program and to direct marketing. The Reward Zone went from paid and limited to widespread and free. Also started to transform their direct marketing capability. As part of this they execute 450 campaigns a month and have tripled the volume of campaigns over the last 18 months. Moving towards 800 campaigns with just 7 people. Not using once-and-done campaigns but rolling sets of small, linked campaigns as they found that the once-and-dones did not work. Model for marketing is to match the kind of interaction a "blue shirt" employee would have with a prospect. Also integrated the monthly, holiday-driven and other programs.
Lot of focus on using analytics, like Peacock, to find relevant products and to predict when they will be interesting and then using that to drive direct marketing campaigns. Big effort now to integrate different channels and bring them under control - just because you can send emails cheaply does not mean you should. Starting to add "hand raisers" to keep customers engaged in what can be a long sales cycle. E.g. Home Theater is about 12 month cycle - 5 months dreaming, 5 months researching, 2 month active buying (12 touches or so during this period). Finally making reward zone certificates personalized based on all this - targeted messaging, special offers in your areas of interest and so on.
The future is about connecting everything and applying more of the loyalty vision. Now focused on a loyalty vision where a deep understanding of customers to enable personalized interactions and inspiring evangelism. Three key aspects:
- Respect customers individually and honor their differences
- Consumers and employees co-create the customer experience
- Meet customers unique needs end to end
Making sure that information improves your experience e.g. by keeping tracking of your equipment to manage compatibility. Co-creation of content, referral program and recognition of brand advocacy are immediate plans. Best Buy wants to consider all the interactions with a customer as "listening posts" so, for instance, when someone asks them to change a billing address, they can use that to drive marketing with offers targeted to you as a newly moved person, show you where the Best Buy is and so on. Integrated data, integrated decisions, using all the information available to improve all the interactions. Very cool.
- Love your data - not everything works but keep at it and get better at it
In particular because measurement becomes harder and harder
- Love your partners - use analytics and other partners as part of the team
Because the complexity can be high!
- Free the data - push the smart math to the front-line where 128,000 employees need it
I might say "free the decisions" because the employees need answers not data!