Modern Alchemists: Turning Information into Insights
I woke up this morning thinking about alchemy. I love the idea of turning common substances (coal) into precious substances (gold) through a mixture of science, wisdom and wizardry. It occurred to me that this is an age of great potential for modern alchemists who turn data into information and then (and this is the magical step) into insights or intelligence.
There was an article in this week’s Economist about Tesco - Britian’s most successful supermarket - moving into the United States armed with powerful retailing science. They have a loyalty program that gives them enormous amounts of data about their customers’ buying habits.
“Tesco’s biggest innovation has been in the way it collects and uses customer data from its Clubcard, a loyalty programme. Many retailers use clubs to provide nothing more sophisticated than a discount to customers as they pay for their goods.
(JJ: simply turning customer data into information)…
The Tesco scheme…. tracks every purchase to build one of the world’s largest databases. This finds correlations between purchases, allowing Tesco to finely tune the product range for each store….
Some quirky correlations also pop out of the data. Take the fact that families buying baby wipes also buy more beer, mainly because fathers of young children have less time to go to the pub. Tesco’s response: mailing families with infants discount coupons for toys and beer.”
(Ahh… there’s the magic - turning information into insights about their customers, and responding with specific offers based on those insights…)
I have a couple of clients who do that for their customers, Chockstone and Attensa. They each take raw data and - using the magic and wisdom of the people who craft their technologies - turn it beyond information into intelligence and insights in the hands of smart marketers.
Chockstone’s loyalty marketing platform (much like the system Tesco uses, I’d imagine) uses the swipe of a card turns customer data into insights. Imagine being a restauraunt franchisee. Previously anonymous customer habits are turned into rich customer profiles like this:
“Customer xxxxxxxxxxxx7852”
Habits: Visits two locations for lunch (42% of time) and dinner (58% of time).
Responds to free food - visit frequency increased by 540% and purchase amount increased 380% during a “free cookie” promotion (from 0.52 visits per week to 3.33 visits per week)
Favorites: favorite sandwich is BLT; second favorite is Ham & Swiss
Average spend: $11.48 per visit (42% greater than the average customer)
As a marketer, that kind of insight into my customers’ habits is priceless. Once those habits are revealed, I can reward them with special offers, thank yous and incent them to return more often.
In the case above, the cost of a free cookie is minimal. Especially in businesses where making loyal customers happy is far more cost-effective than trying to acquire new ones.
Attensa’s Enterprise RSS platform will constantly search the web for information, and deliver it to employees in an intelligent fashion.
Imagine being a global PR firm, for example, and having persistent web searches set up for each of your clients and the executives you work with. (It’s like having TiVO set up for the web.)
You’re immediately notified in your email box, on your Blackberry device or even in your corporate IM system when mentions containing your clients appear. In addition, you can subscribe to your targeted editors’ and analysts’ blogs and news feeds, keeping completely up-to-date on their thoughts, musings and articles.
Attensa’s synchronization ties the server, email, web, instant messaging and Blackberry RSS clients together so articles that are read, filed and deleted are continuously up to date.
Immediate access to your information ecosystem - from wherever, whenever - gives you the insight and opportunity to react quickly to news, events and changing market conditions.
In the spirit of transforming your marketing efforts, think about the modern day alchemists’ tools you might use to turn mounds of data into nuggets of gold.
Great post, Janet - its amazing what can be done with good analytics and communications software - you’re lucky to have interesting clients! A few random notes:
1. Have you heard of Angoss?
2. I wrote a post about a lot of what you’re discussing, in the context of using Digg-like algorithms to automatically adapt store displays to changing retail conditions on a day-to-day basis - Digg the Real World. If I were a store owner, I’d love to have my POS system feed an algorithm and tell me what people are looking for and what to highlight on a daily basis.
3. On Grocery Store data: Awesome for corporate users, but why stop there? Surface it back to customers for a variety of reasons.
Anyway - thanks as always for a great post.
-R
Rod,
1) I hadn’t heard of Angoss, but it looks like they have a very cool analytics tool for business. Thank you for passing it along.
2) Your ‘Digg the Real World’ post is spot on. I wonder why more retailers don’t follow the online example? Probably because we’re a few years out from that. But with futurists like you leading the way, it’s only a matter of time before the offline world catches on.
3) And the idea of a clickstream analysis is sooo not ridiculous. I’m always amazed at enterprises that keep mounds of data and do nothing with it. Must be nice to have that kind of resource, that you could squander it.
It makes me want to scream… WAKE UP!