How to drive customer – centric innovation using analytics

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With the amount of information created every day, analytics becomes the foundation of data-driven insights and innovation. It creates new knowledge and makes sense of your ever increasing data. Multiple brands around the world are turning to data to find new ways to grow and so can yours. There are many approaches to start out on the innovation journey, however businesses keep asking the same key questions like “How to select an idea that will grow the top-line?” and  “How to innovate in a profitable way?”

A research published by Harvard Business Review, says that customer-centric innovation is the most effective approach for innovation that translates into sustainable top-line growth. At the core is understanding of who your customers are and what they need, as well is moving the traditional R&D lab out to where the customers really are.

But where would you start? The good news is that analytics can offer a number of ways of looking into your data and identifying those opportunities for innovation. This article will give you a few tips on where to start with your customer-centric innovation. We’ll look into social media analytics and customer journey mapping as a starting point.

Social media analytics

Social media analytics is an excellent resource that can be used to hear the voice of the customer to identify opportunities for innovation.

It starts with listening to online dialogues of the customers within your space. First, the data around customer sentiment is collected across multiple platforms such as Twitter, Facebook, product review sites, etc. The data is then analysed to identify the volume of activity, key topic trends, audience segmentation, share of voice, sentiment and influencers (as illustrated in Figure 1).

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Figure 1. Social media analytics

Sentiment analysis is what brings social analytics to life. It is performed through text analysis to not only hear the voice of the customer (VOC), but also determine the tonality with which the subject is discussed, i.e. positive, negative or neutral. Common methods used are NLP and Bayesian classification.

As an output, social media analytics can drive a number of innovations for your business.

New product development (NPD)

Customer-led innovation mitigates the risk by creating successful products and updates. The brands can find out about the products, services and features their customers desire by analysing social data. They can also research their industry and competitors to understand what customers dislike. Based on these insights they can start improving their existing product ranges and NPD. Which means that customer-led product development approach may meet the demand in the market place.

For example, Hanz Toys used social media analytics to design and launch their award winning educational toy line. The company achieved 63% reduction in time to give design inputs to engineering by using social listening instead of traditional NPD.

The power of social media analytics can be used to enable customer-led innovation for effective product development and launches, allowing you to identify opportunities and stay ahead of your competition.

Campaign innovation

Another way to use social listening insights is to plan and adjust campaigns to resonate better with the target market. These insights are actionable, compared to conceptual insights that can be generated through traditional research, as they allow brands to understand when and where to engage with their customers on social media.

Similarly, monitoring sentiment can be used to adjust the messaging of campaigns. It also allows you to spot issues earlier and adjust the messaging on the fly.

Understanding where your customers prefer to engage will help identify new ways to connect with them. It can help companies broaden the number of platforms they use to run their campaigns, and select the ones that work best.

For example, when Kmart ran it’s ‘Ship my pants’ campaign, it used social listening to analyse people’s responses. The campaign started on YouTube and became a viral hit, garnering 13m views in a week. The positive sentiment towards the video prompted Kmart to take the ad over to TV, a much more expensive channel but with substantially broader reach.

A Data2Decisions (D2D) client is using the insights to find out the key topic trends and sentiment in real time. This allows the course of campaigns to be corrected in real tim. The messaging is adjusted based on the topics customers identified with and became emotive about.

Identifying new segments

Social media analytics can be used for segmentation as well. Pervasive coverage of social media can help identify new customer groups that traditional research might not have been able to uncover. By hearing a new customer group commenting about your products and services, marketing can then target their campaign to address that newly uncovered audience profile.

A D2D client identified that their offering was discussed by families during school vacation, a segment they hadn’t proactively pursued. The brand used this insight to launch a campaign into that segment immediately generating additional revenue.

In another example, Hanz Toys uses social listening to replace VOC, CRM and conventional market data for their audience insights. They have reduced costs for finding the customer insights by 43%.

Mapping customer journey

Another area for customer-centric innovation is based on the insights generated from customer journey mapping. The Internet of Things and digital disruption created customer engagements across multiple platforms and channels, both offline and online. A customer may learn about a product on the radio, then search for its features online, later discuss it on social, and after seeing a display ad finally purchase a product. Understanding path to purchase is a complex task when it comes to tracking the customer journey across offline and online touch points.

There are a few ways to map the customer journey. Digital attribution can map the online customer experience. However the picture won’t be complete if we are not considering in-store interaction as well as the influence of offline media such as TV, radio and others. Designing your customer journey map based on a survey is a popular method as well. But the surveys always depend on the quality of the sample as well as objectivity of the feedback provided by the responders.

Analytics can provide an objective full view when mapping the customer journey across offline and online. The approach relies on data gathered from interactions with your customers across all platforms and channels, with paid, earned and owned media considered.  Once your customer touchpoint data is collected, ecosystem modelling is performed to attribute all touchpoints to conversions. The modelling approach recognises that customers engage with brands in a non-linear way involving a number of different consumer touchpoints. For example, not every touchpoint leads to conversion, but it may lead to yet another or several touchpoints before conversion (Figure 2. Customer journey mapping using ecosystem modelling).

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Figure 2. Customer journey mapping using ecosystem modelling

Optimise path to purchase

Big area of driving change by using customer journey mapping is optimising path to purchase. In Figure 2, customer path to purchase from awareness to conversion is highlighted in blue.

For example, your customers may have been first exposed to PR activity, making them aware of your product. Then they might have been contacted via direct mail, which could have made them consider your brand. They then could have continued to research similar products online using search (PPC), which might have eventually converted them. With digital last click attribution, search would have been credited for conversion (if the purchase was made online). This particular example illustrates that in order for search to work the customer would have needed exposure to PR and direct mail, before using online search and finally making a purchase. Also, in this particular example search wouldn’t have been credited at all, as conversion happened in-store. But without this knowledge you wouldn’t have been effective in optimising your path to purchase and in increasing conversions.

Another example is when your customer journey mapping might show that your affiliate product review site drives a lot of prospects to your store. If only digital attribution was used, it may have led to the conclusion that this particular affiliate was not an effective platform. Without the insights from the mapping study, your company might have dropped the affiliate thus unintentionally decreasing the traffic to the store. With this insight you may choose to increase investment into your affiliate, which in return will drive in-store conversions.

Marketers can also optimise the customer decision journey by compressing or in some cases eliminating consideration or other changes. The approach can drive competitive advantage as your sales cycle would shorten compared to competitors.

The examples above illustrate the importance of understanding all touchpoints and their interplay along the customer journey for a brand that wants to optimise their path to purchase and achieve greater conversion rates.

Identify opportunities for innovation

Mapping your customer path to purchase can also uncover opportunities for innovation at each stage of the journey. The question to ask here is “What touchpoints fail to generate a response and what can be improved to delight the customer?” For example, if conversion fails in-store, you can offer free samples. If it’s is low on the website, dig deeper to understand the root cause of why it failed. Maybe it was difficult to return a product. You could then let customers return or exchange it at any of your stores to increase conversion on your website.

Improve client relationship model

A customer journey map will also help identify pain points along the path to purchase. By using generated insights about the obstacles on the customer journey, a marketer can then plan and prioritise the fixes to those pain points. Ultimately, these changes will enhance customer engagement with your brand.

Campaign innovation

Brands can use journey mapping to drive innovation in their integrated campaigns and achieve greater campaign effectiveness. The channels and platforms that have been identified as driving the most interactions can then be used in the campaign. When marketers direct their spend to the moments of most influence, they get a higher chance for conversion.

Product rollout

Another area for implementation is innovating product rollout. Once you understand your customer journey, what works and what doesn’t, you can plan a map for a new product roll-out.

Drive organisational change

Finally, a customer journey map can help your organisation drive organisational change. This can be achieved by aligning your entire organisation to the voice of the customer. Depending on what touchpoints your customers choose to engage with your brand, you can align your employees and partners to enhance experience and engagement around those platforms.

For example, the study may identify that word-of-mouth is an influential touchpoint in moving prospects to conversion. Your company may then choose to set up the internal KPIs around increasing NPS scores which would be a leading indicator of likelihood that your customers would talk favorably about your brand. In this case driving the NPS score may result in higher conversion through increase in the word-of-mouth efforts. Analytics can go even further to quantify how much increase in your sales can be attributed to certain increase in NPS (or any other indicator identified by the mapping exercise).

Customer journey mapping using hard data and modeling is a valuable approach to drive innovation as it gives holistic view of your offline and online touch points and ensures objectivity of your approach.

In this article, we looked at two big areas for customer-centric innovation such as social listening and customer journey mapping. We also looked at how generated insight can be applied to drive changes in the business and marketing environments. These two areas are a great starting point in driving innovation based on the voice of the customer. These approaches can set brands up for success and ensure sustainable top-line growth.

For further information about the article or analytics, please feel free to contact Irina by emailing