Insight: How valuable is non-transactional data?
We always enjoy keeping up with the discussions on RetailWire, and this week sees the publication tee up a robust one on the importance of non-transactional data to personalised offers. With the abundance of data now at our disposal, how do we know which data will most effectively move the needle on customer loyalty?
The discussion kicks off with the well-known example of US retailer Kroger, long seen as the gold standard in using transactional data to fuel loyalty offers. According to a report from Frozen & Refrigerated Buyer magazine (man, the trade press is really catering to micro-segments of readers, aren't they?) Kroger finds data sources around the transaction equally as valuable. Money quote:
'Our mission is to making peoples lives easier by harnessing the data to create a more personalised, more relevant in-store experience,' said Yael Cosset, chief commercial officer and CIO of Krogers data analytics and marketing firm 84.51. 'But to truly understand what matters to our customers, we need to go well beyond the traditional way of looking only at the transaction [and include] what happens around it as well,' he explains."
The Bullet Point: With so much data at retailers' disposal, how do you direct your limited resources toward the data with the most potential value? The key is to focus not on Big Data, but rather on Small Data - that data most predictive of relationship value. Whether it's demographic, social, mobile, post-purchase, or other data, analyse that data source to determine your ability to derive from it insight into customer potential - in other words, what current customer behavior allows you to identify a new customer as a potential best customer? Predictive analytics is the key to unlocking the power of customer data and directing your data efforts to where they can do the most good.
The most important takeaway from this discussion: whereas transactional data once represented the ceiling of your loyalty efforts, it now represents the floor. How high will you rise?
Join the RetailWire discussion here.