I have often wondered why some companies languish in their use of customer data and others feast on it. The stakes are high, because data-driven companies see an average of 6% gross revenue increase and 5% in productivity, according to McKinsey research. What is even more impressive is that these companies are using digital data signals to listen and learn who their valuable customers are, what amount should be paid to acquire them, and how to innovate to keep them.
"The stakes are high, because data-driven companies see an average of 6% gross revenue increase and 5% in productivity."
I considered a collection of companies whom I have watched develop (or languish) over the past five years. What traits would data-driven companies have in common? Some companies had the latest tools but lacked the staff to properly use them. Others had loads of staff but spent the majority of their time on menial tasks such as updating reports. Some companies had rock star data scientists who produced amazing insights for the company, yet action on those insights never came. While there are many paths to success, the ultimate difference came down to one thing: executive leadership.
Executive leadership in data means there is at least one powerful senior executive who wants information at the individual customer level. This is not easy because to become customer-centric requires teams across the organization to work together in new ways. In fact, when CMOs and CTOs work together, there is a 76% chance of success, according to a 2014 IBM survey.
Women executives may have the most appropriate skills for this. Like it or not, women are still perceived as much more capable than their male counterparts at working out a compromise. Conversely, the reverse perception is women are not as good at risk-taking as men. Yet, data can be used to fill the gap and support a quantified risk. For women, executive leadership with analytics is a win that plays on a perceived strength and shores up a perceived weakness.
When a woman exercises executive leadership in data, she blends instinct and science. She thinks of people before page views. She wants to know who is a good customer and who is a bad customer and what those groups have in common. She wants marketing and operations to respond appropriately to these groups. She also considers how to move more mediocre customers into the valuable group. This executive knows there are large technical and cultural hurdles but continues to apply pressure anyway.
Their teams respond. Most companies are sitting on a horde of untapped customer insights. When this executive applies pressure, talented people who have been biding their time eagerly step up. Underused tools get new life. Data connections are made and insights begin to pour in. Moreover, the executive’s pressure makes acting on this data acceptable; and because data is trusted and acted upon, a virtuous cycle forms. Customer-centric data is used, results are measured, changes made, and data is used again.
The CEO of Williams Sonoma, Laura Alber, confirmed this in a September 2014 Harvard Business Review story where she discusses how analytics drove revenue growth. She says, “We’ve centralized and integrated our marketing, analytics, and IT functions so that we can more easily share and execute on ideas and information that benefit the entire group.” She later continues, “None of this would be possible if our whole team didn’t embrace an open, collaborative, cross-disciplinary, ‘Create, test, prove, roll’ culture.” Her place, as CEO, is clearly in the data.
Despite all this promise, there remains a huge gap in analytics leadership and vision: where executive data leadership is missing, the company is its own worst enemy. Top-notch analysts’ present clear customer calculations with measured business value and still get nowhere. Brands set up clear and productive customer-optimization programs, only to have the budget cut. Customer-centric product innovation is yanked out and put into more operational teams. These companies will not understand how much they have lost until their data-hungry, customer-centric competition stampedes them.
For executive women, this is the leadership opportunity of a lifetime. It is time to stand up and say, “Today, I want more customer data. Today, we begin to knock down our internal barriers. Today, we will get out of our own way and will use data to hear the customer first.”
Allison Hartsoe is a digital analytics expert who mentors executives regarding how to find value in their digital customer data. Follow Allison on Twitter at @ahartsoe or on Linked In at www.linkedin.com/in/allisonhartsoe.