data – The Business of Social Games and Casino

Becoming truly customer-centric and personalized

Focusing and organizing your company around the customer, not functions or products, is the only way to become truly customer-centric. While loyalty and rewards programs are a great tool to increase engagement, they are only one part of becoming customer-centric. Not only does David Norton’s The High Roller Experienceprovide a roadmap for building a strong loyalty program, it also shows how Harrah’s/Caesar’s casino group created a truly customer-centric company.

Put the customer at the center

By definition, to be customer-centric, you need to put the customer at the center of your company. The leadership of most businesses build their organization around product line, business unit, or geography, which makes it quite difficult to take a customer-centric approach to running the company. The customer becomes a by-product of the organization’s design rather than the core around which the company revolves. As Norton writes, “customer centricity means that the customer is the company’s and not an individual business unit’s. It is an ability to interact with the customer cohesively and consistently regardless of which business unit the customer is dealing with.”

You also need to put the customer at the center of your data. Norton writes, “being able to truly understand the customer and present relevant content at the right moment through the right channel is the holy grail for which companies should strive in order to engender deep loyalty from customers. Data and technology can enhance the customer experience while simultaneously driving incremental profits for the company. “

To achieve this convergence of data and technology, you should build cross-functional task forces that include analytics, technology and the various functions that interact with the customer. These teams can then derive how to understand the individual customer behavior and integrate the results at each touch point so the customer gets the optimal experience for them.

It is more than loyalty

Being customer-centric is much more than loyalty. While Norton created Total Rewards, Harrah’s incredibly successful loyalty program, he writes, “loyalty is about understanding your customers in detail and interacting with them in a highly personalized way at every point of contact with your brand.” Loyalty is about more than a rewards program where customers are fixated on point accumulation and the company is primarily concerned about the cost of contingent liability. It is about interacting with the customer across their entire journey, at every interaction with your company.

It cannot be product specific

As mentioned earlier, you cannot be customer centric if you are focused on product lines or types. You need to look at the customer across all of your products. This focus also then allows you to help the customer find the products and experiences that are most likely to resonate with them.

Looking at the customer across products also enhances the lifetime value of the customer to the company. If you set up your data and organization around the customer and not product, you can predict who of the low-value masses has the potential to shop across products, largely by looking at demographic and behavioral factors. You can then target these customers so as not to confuse the individual product positioning in mass advertising.

Put the customer at the center

With customer now expecting a personalized and great experience, and getting it from the top companies (Netflix, Amazon, etc), you need to move from a 20th century company to a customer centric company. Blow up your organization and structure it around the user. Build your analytics and business intelligence so it tracks the customer journey and allows you to touch every player individually the right way at the right time. When you build your company around the customer, you build it to succeed.

Key takeaways

Being a customer centric organization is much more than having a great loyalty program.
You need to structure your organization around the customer, not along product lines or geography or channels.
Your data also needs to be customer centric, understanding the customer at all points of their journey and ensuring that it then feeds this data back to given the customer the best personal experience for them.

Why data is more important than hair: The Donald Trump story

There is a great article on Politico, How Trump Let Himself Get Out-Organized, that explains how Trump’s Iowa debacle was a result of a failed analytics strategy. Trump made the same mistake many companies commit, he felt a strong brand and what he believe compelling product allowed him to under-invest in analytics. This issue was compounded by the aggressive use of analytics by competitors. Although this occurred in the political arena, there are lessons for all businesses.

The article explains that despite Trump’s strength in the polls, he did not have “the tools they needed, which is why they overpromised and underperformed.”

Penny wise and pound foolish

While Ted Cruz and Marco Rubio spent millions building sophisticated voter targeting machines, Trump did not start building a data operation to target voters until mid-October. It did not even start buying data (i.e. voter lists, etc) until November and waited to December to start using the Republican National Committee’s (RNC’s) voter file.

The Trump campaign declined to use Cambridge Analytica, a behavioral modeling company with political expertise, due to cost. Cruz, however, retained Cambridge Analytica’s services and the firm is now widely credited with engineering Cruz’s cutting-edge targeting operation. Rubio, who also over delivered on expectations, spent $750,000 for an outside company to assist in its data operations. Trump overall spent $560,000 on data services in 2015, compared to $3.6 million by the Cruz campaign. It is also about $700,000 less than Trump spent on hats.

You also need the analytics team

The Iowa caucas also showed the value of having a strong analytics team, not simply software. Cruz’s data team, which they call the Oorlog (the Afrikaner word for ‘war’) project, includes four full-time data scientists and embedded talent from Cambridge Analytics.

The Rubio campaign, which also exceeded expectations, has also invested heavily in its analytics team. It has a 22-person data war room in DC.

The Cruz campaign also hired ten canvassers (and recruited many volunteers) to go door-to-door to contact people the analytics suggested were supportive or could be persuaded. Traditionally, these so-called match rate initiatives are 50 percent successful but with Cruz’s advanced analytics the success rate reached 70 percent. The Cruz campaign also used the voter profiles to shape its strategies for most marketing activities, from television ad buys to telephone banks.

Micro-segmentation

Micro-segmentation, or creating very small customer segments and treating them uniquely, is another area where Trump fell down compared to Cruz. As Politico wrote, the Cruz campaign, “built a list of more than 9,000 Iowans who were still on the fence between their candidate and Trump. The team divided the undecided voters ― who were heavily evangelical and 91 percent male ― into more than 150 different subgroups based off ideology, religion and personality type, Wilson said. It used Facebook experiments to determine which issues jazzed up their voters the most.”

The lesson

No matter how strong you feel your product is, or how well it has performed in the past, you are vulnerable to competitors who may have a superior analytics solution. To combat this risk, you not only need to match the investment your competitor’s are making in analytics and look at micro-segmentation but also build a world class data team.

Key Takeaways

Donald Trump’s loss to Ted Cruz in Iowa can be attributed to Cruz’s superior use of analytics to build a competitive advantage.
Cruz invested much more in both analytic products and a great data team and it helped him get pro-Cruz people to caucus.
Cruz also did a great job of micro-segmenting potential voters into more than 150 different subgroups based off ideology, religion and personality type and used Facebook experiments to determine which issues were most relevant for each subgroup.

Lifetime Value Part 15: Five ways to use data to improve customer lifetime value

I recently came across a great post in Wired by Neil Capel about leveraging data to increase lifetime value. I have written many times about how lifetime value is the lifeblood of your business. A high lifetime value allows you to spend more on marketing and thus grow your business; low lifetime value makes it impossible to acquire new users. In Capel’s post, he outlines five ways you can leverage data to increase your lifetime value.

1: Use data to understand customer interests to create relevant content

Customers and players face an overwhelming amount of information and content. They are also not looking, and actively avoiding, advertising. What they want is information that is relevant to them. Customer’s interests and needs change constantly and you can tap into that inferred nature of the data to determine which elements of your content will be the most relatable and consumable to each user. Leveraging data you can determine which pieces of content an individual wants to interact with and then use that information to deliver automatically current and relevant content to that individual.
Continue reading “Lifetime Value Part 15: Five ways to use data to improve customer lifetime value”

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Put the customer at the center

It is more than loyalty

It cannot be product specific

Put the customer at the center

Key takeaways

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Penny wise and pound foolish

You also need the analytics team

Micro-segmentation

The lesson

Key Takeaways

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1: Use data to understand customer interests to create relevant content

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