BrainTrust Query: Can’t The IT Department Do My Customer Analysis?
Through a special arrangement, presented here for discussion is a summary of a current article from Cultivating Your Customers, the M Squared Group blog.
Our clients often must justify the necessity of using an outside firm to do their customer analysis. One of the most common alternatives suggested is to let the internal IT department do the work instead. It sounds cheap, easy and fast.
But the truth is that letting the IT department work on your customer analysis is not cheap, easy nor fast — and the better your IT department is, the more difficult it will be to get the information you need to better understand your customers.
Here are some reasons why:
- You don’t know what information and analysis you need, which means you are not likely to get it "right" the first time you ask. You will need to revise both the information you want to analyze and how you analyze it until you get the insights that can drive profitable actions.
- Your customer data is incomplete and "dirty," so any analysis you conduct is also likely to be incomplete. You will need to work with whatever data you can get "about right" and cannot wait until your customer data, from multiple sources, are neatly combined together and thoroughly cleansed.
- You need insights fast and cannot wait to have your project placed "in the queue" and prioritized along with all of the company’s other IT projects. If you cannot get the results quickly, not only your project, but your career may be in jeopardy.
Just as important, the goals of a strong IT department are antithetical to data mining. The goal of a well-run IT department is to make sure every project is scalable, reproducible and completely accurate. Your customer analysis will end up being a one-off (at least at the start), and represent only the data that is accurate at the time of the analysis. If you spend time cleaning the data to 100 percent accuracy, you will never complete your project — the goal is action, using whatever data is available and clean at the moment. The better you are at mining your customer data, the more grumpy you will make your IT group.
Net, net, you and your IT group end up grumpy at each other, since neither one can meet their goals while the other group meets theirs.
A strong IT department is important to a data-driven marketing team, after the marketing team has decided on the analysis and want to see that analysis repeated consistently over time. In addition, after the customer analytics effort demonstrates profitable revenue growth, marketing will want more clean data to expand the effort.
The key is to use both consulting and IT for what they do best — consulting for customer data exploration and actionable insight, and IT for standardization and reporting.
Discussion Questions
Discussion questions: What roles should IT departments and outside consultants take around data mining? Can internal IT and marketing departments be reorganized to better capitalize on customer data insights?
The IT department’s role is straight forward. Listen to the user and understand what they want to do. Select/create software for the user to use. Clean and load the data. They simply do not have the skill set to do effective data mining. If the user cannot do the work, they should not ask for or demand the application.
This is a great example of why and when internal collaboration is essential for success. The IT department people understand the database and how it works. They understand how to manipulate the data. However, they do not understand how or why customer insights need to be created. The marketing people understand what questions need to be asked about the consumers, why the information is important, and how it can be used to determine insights and for decision-making. However, they do not necessarily understand how the database has berm created or how the data can be manipulated.
This is a situation requiring internal collaboration. This is a challenge because both groups of professionals use a different jargon, approach the data from a different perspective, have a different set of assumptions for working with the data, and generally use the data to make different decisions. Working together requires patience, good communication skills, and the creation of joint goals.
You know, this article made me pretty grumpy! There’s a suggestion in here that marketing can “go around IT” to get done what it wants to get done. That just isn’t true. Ultimately they will come back to IT for assistance, and perpetuate the very problem they were trying to solve in the first place — a tangled mess of data and applications.
If your IT department can’t do the work, or at least partner with the user group to get it done, get a new CIO. If the marketing department continues to go around the CIO, get a new CMO. Or perhaps a strong CEO or COO can teach everyone to play nicely.
What is written above is just plain wrong.
All too often, IT departments either are delegated or perhaps worse, volunteer to take on responsibilities that are outside their purview. The insights and guidance data can yield is invaluable for marketers and merchants. IT will may provide and present the data but they will not be able to extract the actionable insights and guidance that will help marketers and merchants to ‘sell more stuff’. It is imperative to have a liaison between marketing and retail IT that can bridge the bilateral communication gap between these two important resources. A neutral third-party consultant can be invaluable to achieve visionary results.
We find the majority of our clients’ IT departments are already straining under the weight of day-to-day tasks and enterprise-wide operational initiatives.
To look toward an internal IT team as the solution for data mining, relevant analytics and deep insights is often an invitation to frustration for all parties.
Our experience has shown time and again that it is best to rely on your internal IT resources to help facilitate external partner/vendor access to key data components, then allow the outside consultant to leverage their expertise in helping your achieve your objectives.
There is a false choice given in this article: the decision doesn’t need to be “do I use IT or do I use an outside consultant?” There’s a third possibility: using a technology solution that is designed for your own marketing team to use.
Historically, this hasn’t been an option; POS and customer data lived in databases, databases were owned by IT, and the complex, expensive software that would let you slice and dice the data required weeks (or months!) of training for a highly technical (read: IT) user to master. It’s the classic case of technology designed to answer 100% of possible questions, but usable by only 1% of possible users.
Consultants have traditionally created offerings built around this limitation. The highly technical, highly trained users were part of the consulting organization, and they worked closely with the business users to deliver neatly-packaged consumer insights in PowerPoint form. But just because the consultants understood the business better didn’t mean they could deliver results any faster, and it certainly didn’t mean that the results were actionable.
Today, there’s a better option. Simple, easy-to-use, easy-to-learn, and incredibly powerful shopper analytics software, designed to be used by the people in your organization who best understand your business, your shoppers, and your goals. And, by automating the connection between the targeting and analytics engine and the touch-points you use to communicate offers and messages to your shoppers, the customer analysis becomes instantly actionable. This vision is why I started my company, and is what we deliver for our customers every day.
There will always be critical roles for IT and consultants to play. But let’s get away from the false choice of IT vs. consultants, and instead focus on giving all parties the tools to make the entire problem simpler.
How can IT and marketing groups leverage this mountain of data better? Businesses today have an abundance of customer data available from an increasing number of sources, but many organizations struggle to turn this information into actionable insights. An effective customer analytics strategy, however, can help drive top-line growth, avoid unnecessary costs and increase customer satisfaction.
First, organizations must apply a customer analytics strategy to gain information cost reduction. They do so by honing their IT capability to gain insight from the information explosion and develop a deeper understanding of the customer through marketing analyses.
Second, IT must share information internally with marketing and across the value chain. Organizations in this stage embrace a customer analytics strategy that enables information sharing to create a consistent customer experience over multiple channels.
Third, organizations need to shift toward enabling information responsiveness. Be able to move from reaction to prediction, these marketing organizations focus on identifying the questions that — if answered by IT — will impact their business the most.
In the last stage, the most successful marketing organizations execute a strategy that enables information on demand and an analytics-driven approach called multichannel next-base action. These organizations have the capability to adapt business models that enable faster creation of value.
Top-performers differentiate themselves through a deep understanding of their customers. These organizations typically have strong executive sponsorship for their chosen customer analytics strategies with a top-down mandate to build capabilities. They treat information as a business asset with business managers accountable for customer data and customer communication.
You don’t know what information and analysis you need? You “can’t wait” (perhaps because you’ve already waited too long)?
These don’t sound like problems in an IT dept; they sound like problems in a marketing department. So if you’re one of those firms that’s always hiring “consultants,” you DO need to reorganize…but probably not the IT Dept.
This submission highlights a company without leadership; not a broad based analysis of organizations.
Analytics are best done by the IT department. Knowing what information is available and needed should be a 90 minute meeting between involved department heads.
This article as presented isn’t about reorganization or consultants; it’s about internal leadership and competence.