Back in 2012, the aptly-named US discount store, Target thought it had delivered the data insight equivalent of throwing a dart and hitting the bullseye from 30 yards.
Its analytics team figured that by studying shopping habits it could establish with a high degree of certainty that a customer was pregnant. The unwitting individuals could then be surreptitiously offered discounts and incentives that would hook them into a child-rearing buying cycle for life.
“As soon as we get them buying diapers from us, they’re going to start buying everything else too," Target’s director of data management, Andrew Pole, told the New York Times. "If you’re rushing through the store, looking for bottles, and you pass orange juice, you’ll grab a carton. Oh, and there’s that new DVD I want. Soon, you’ll be buying cereal and paper towels from us, and keep coming back.”
The idea was given wings, but there was a hitch – Target hadn’t accounted for one particular case – that of a Minneapolis man who stormed into his local store to demand answers as to why his high school daughter was being furtively sent coupons for baby clothes and cribs.
Not long after the incident, the man’s daughter revealed to the father that she was pregnant. The story quickly spread like wildfire as an example of data’s capacity to predict and pre-empt, and the pitfalls and ethics of doing so.
The Three approach
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At Three Mobile, the approach is more considered. “As the smallest of the major networks in the UK, we had great ambitions to be a real customer experience champion,” says David Chapman, customer strategy manager for the network during a period of increased focus around proactive service.
“The proactive and predictive piece was vital to that, but more in terms of reassuring customers that we were looking out for them; showing that we were on their side rather than some kind of faceless corporation that signs them up and forgets about them.”
For Three's customer strategy team in the UK, this means engaging customers with deals and incentives through the course of a contract, in a similar vain to Target.
However, unlike Target’s attempts to lock-in loyalty at the point of purchase, Three’s offerings are about going against the grain of the telecoms industry as a whole – by proactively making their existing 10m-strong customer base aware when there’s an improved offering to be had through the course of their contract.
“We were perhaps framed collectively [as an industry] for not informing customers when there's a better deal, for not telling them when their contracts run out, for not telling them what a cheaper alternative might look like,” Chapman adds.
“It’s essentially hoodwinking customers, such that they are misled or uninformed and don't really know how to get the best out of their relationship with us. Counteracting this is really what was at the heart of our proactive strategy.”
Three’s proactive strategy includes a broader remit, however. As well as taking on promotional duties, the company is using its vast data pool to inform customers in advance about anything from billing anomalies to general support concerns, account management and issues with the network itself.
The programme is a result of Net Promoter Score (NPS) analysis conducted around four years ago, which found that many customers followed a similar pathway when joining the network.
“At the beginning of a contract, their NPS and likelihood to recommend us would be really high based on that new supplier buzz and the fact that you've got a nice, shiny toy in your hand,” says Chapman.
At the beginning of a contract, NPS and likelihood to recommend was really high based on new supplier buzz and the fact that customers had a nice, shiny toy in their hand.
“But as we tracked the same customers over time, we’d see that their enthusiasm started to wane. By the end of 24 months, which is a typical contract, we'd found their NPS would be down close to zero in some cases, but just because we hadn't really shown any love to them in any meaningful way.”
The customer strategy team were able to decipher that network performance and customer support laid claim to around three-quarters of NPS issues. The two areas were often cause-and-effect; when network issues were at their highest customer support was often at its most strained.
As a result, in 2015, the first component of the company’s proactive strategy came to fruition. Looking at customers for whom network issues were of most concern, they were then able to use data which highlighted where those individuals spent at least 20% of their time in a previous month, and in turn send an SMS to them when they next entered this potential blackspot.
The SMS provided advice on how to get the most from the network, and a link to a troubleshooting web page which provided some options for improving signal and advice around tweaking phone settings. A similar addition was also added for when planned maintenance was due on any part of the network, so customers would receive an SMS warning in advance of any disruption in their local area. Both acts, whilst relatively simple in their conception, helped drive down the number of calls directed into Three’s contact centre.
Alongside network and support, Chapman and his team studied Three contact data to identify a key issue with value perception, particularly among customers’ contracts that had passed their halfway stage. A new initiative was put in place called the ‘value statement’; whereby an email was sent out to customers triggering a certain stage in their lifecycle that helped reiterate the benefits of the contract they may yet to have explore.
“What it's trying to do is deliver a mixture of marketing support and inspiration, but also perhaps just highlight some things that they haven't taken advantage of yet, which are free-to-use, free to access, free to take advantage of but they just may not have considered,” he says.
“The purpose of the value statement is to remind customers about the benefits they're getting with Three and actually to specifically state how much money they've saved with things like Feel at Home, which is our foreign usage proposition.
We've observed a steady decrease – not dramatic but steady – in the number of complaints we've had around the network.
“What we know is that the open rate is very high for these – 38% versus around about 21% for the industry, and slightly higher than our standard email open rate as well. We know that customers have found the email very helpful because they've told us with a little thumbs up, thumbs down at the bottom of the email; a crude measure of satisfaction, perhaps, but one that provides us with instant feedback about the email’s success.”
Chapman is clear that this is proactive support in its most obvious form – taking the initiative by contacting customers at different stages of their lifecycle before they’re statistically likely to contact the company themselves. And to be successful requires a combination of data, automated communications and self-service. The benefits, Chapman adds, have been profound:
“We've observed a steady decrease – not dramatic but steady – in the number of complaints we've had around the network. What's also been surprising, not something we were expecting, is that customers that do contact us and complain to us about coverage are less likely to demand some sort of compensation if we've already sent them a proactive communication.
“If we've already had a blackout and said, ‘we've got a problem here, sorry. Here are some options’, what we're seeing is that they're less likely to try and demand some kind of either ongoing payment from us or a kind of one-off gesture of good will; something we’re often obliged to offer depending on the type of issue.”
Marketing and service combined
Chapman’s belief is that Three have only scratched the surface of what’s achievable by being more proactive with service and marketing acting in tandem.
“Three still receives several million inbound calls to our contact centre per year. It's acknowledge that when it comes to self-service, the company needs to catch up.
“The key is to try and improve how the customer strategy, which is technically seen as a marketing department in the organisation, interacts and works with our contact centre to ensure that it can carry on reducing the number of calls, and certain types of call too.
“In terms of communications, there's definitely a desire to want to super-personalise everything now. At some point next year from a technology perspective, three will be in a position to hyper-personalise all of its marketing and really get down to a granular level of detail. I think that will really help with some of the proactive communications.
“It's about finding better and more relevant ways to engage with customers and the aim is to build on the success already seen in some areas and launch more new campaigns to help customers in different situations.”
What these different situations represent depends, of course, on the data. However, if that happens to highlight the need to give more attention to pregnant customers, it might be wise to learn from the Target story and at least check their age first before launching into a campaign.
About Chris Ward
Chris is Editor of MyCustomer. He is a practiced editor, having worked as a copywriter for creative agency, Stranger Collective from 2009 to 2011 and subsequently as a journalist covering technology, marketing and customer service from 2011-2014 as editor of Business Cloud News. He joined MyCustomer in 2014.