Keynote speaker at ServiceSource’s Recurring Revenue Forum (London, Nov. 16, 2017), Anders Sörman-Nilsson, shares insight on how businesses can use data to get closer to their customers.
Back in the analogue world, Netflix’s business model relied on postal mail services to distribute other brands’ content. Now, you can imagine that Netflix wouldn’t get a whole lot of data back when people returned their envelopes – via pigeon. Jokes aside, Netflix may have been able to get a sense for whether a customer had opened and watched a whole series of Sopranos, or only a few episodes of Lost. However, the company’s evolution to a digital delivery model led to a paradigm shift in their distribution, design and creation of content. Becoming more digitally intimate with their customers through digital content distribution enabled Netflix to start studying their behaviors and usage patterns. This led to a virtuous cycle of observation, pattern recognition, personalized recommendations, and creation of their own unique content.
See, these new digital insights empowered Netflix to start figuring out what their clients liked, and predictively start creating unique content that they knew – not thought – their clients would consume. For example, if you know a large part of your database like Kevin Spacey as an actor, that they like David Fincher as a director, and that when you combine these two with a successful twenty-year-old script from the UK, you have the perfect Venn-diagram for creating House of Cards. The creative sparks at Netflix Original series now come from a combination of creative talent and Big Data Analytics. There is an art and a science to how Netflix has been winning digital minds and analogue hearts.
So, what can we mere mortals learn from this example?
- We all potentially sit on a treasure trove of information about our customers already. The question is, are leveraging it? Have you studied your customers’ usage patterns? Have you hired data scientists to analyze and visualize the data to move from data to information to knowledge? More data is just more data, unless it is intelligibly dissected and placed into a context.
- By distributing content and services digitally, the science of marketing becomes an easier feat. Gone are the analogue days when we did Direct Marketing pieces en masse with postal A/B split test and voucher tracking. When we communicate digitally, everything becomes measurable and monitored, and, as a result, outcomes can be managed. This is every marketer’s dream, as campaigns and UXs can be in constant beta mode and tweaked for greater human-centricity and brand stickiness. This scientific approach enables your creatives’ art to be relevant and personalized, thus generating the ROI your leaders want.
- Imagine knowing that your next product or solution will be a success before you launch it, or better yet, even build it. When we study our customers’ onboarding processes, their online learning module completions, installation speeds, and tech issues, we can start creating more sticky, gamified UXs, and even predictively fixing our customers’ issues before they ever occur, leading to less friction – and more loyalty with your brand.
- As we gather data about our customers, and our business models digitize, you may even find yourself shifting industries, or vertically integrating. In the example of Netflix, the company shifted from being a distributor of other media brands’ content to being both a distributor, retailer and a designer of original content. This means they now own the imaginations of their customers, whose deeply personalized content they are intimately in tune with as a result of the virtuous cycle of data gathering, monitoring and analysis. So, how can you innovate your business model as you embark on a journey of combining art and science?
- In a digital world, social data can now be considered credit data. In the world of finance for example, social media and digital habits are now informing FinTechs and lending players on the creditworthiness of consumers. It used to be that the only forecast of future success was a person’s FICO score. The digital world is a bit more nuanced than that, and in a similar vein, you can start creating and observing potential buyer personas who are not engaging with you yet. When are they opting out of the customer journey, what pieces of content do they engage with, which thought leadership articles are they sharing, and what video did they download? Through the digital data, your customer journey design can become even more human-centric, and enable seamless transitions as your clients move from awareness to engagement to evaluation to decision and usage of your products and solutions.
We must turn data into information and knowledge. Netflix started very deliberately gathering data, visualized it into patterns and information, and transformed it into actionable knowledge they could feed back all the way back to their IP factory of creatives, who could effectively reverse-engineer content that would sync with their client’s imaginations – and ensure our willing renewals and subscriptions of Netflix’s services. The data shows you that yesterday your customers changed. Now it is your turn.
To request an invitation for the Recurring Revenue Forum and hear Anders speak, please email email@example.com.
By futurist Anders Sorman-Nilsson (EMBA / LLB) in association with ServiceSource.