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3 WAYS DATA SCIENCE IS KEY TO CUSTOMER EXPERIENCE

7 minute read
By Scott Clark
February 28, 2022

Customer Experience
62

Knowledge Tracker
Are you getting the most out of your data? Learn how to leverage this
information to better understand your customers and strengthen CX .

Data science enables brands to gain a deeper understanding of each touchpoint in
the customer journey by analyzing the information from previous customer
purchases and interactions, providing a more personalized and positive customer
experience. But that's not the only way that data science contributes to CX.
It's also a key part of improving the customer experience.


DATA SCIENCE CONSOLIDATES, CLEANS AND MANIPULATES DATA

Data science is comprised of multiple domains and includes statistics,
scientific methods, artificial intelligence (AI) and data analysis, all of which
extract value from data.

Data scientists combine a wide range of skills so that they are better able to
analyze information collected from various sources, including:

 * Websites
 * Mobile devices
 * Sensors
 * IoT devices
 * Customers

In turn, each of these data points leads to actionable insights.



Data preparation typically includes aggregating, cleaning and manipulating data
for specific types of processing. Data scientists apply machine learning
algorithms to data — which include images, numbers, text, video, audio and more
— that, when combined with AI applications, can suggest the “next best action”
based on actionable insights gained from that data. 

Lisa Loftis, principal product marketing manager on the SAS Global Customer
Intelligence Team, told CMSWire that without data science, brands would be
unable to deliver the types of experiences that today’s customers demand.  

“There is simply too much data, too many interaction points and too much
fragmentation across both data and channels for a human to possibly know enough
about any single individual to really personalize the interaction. Many of the
marketing and CX predictions for 2022 and beyond illustrate how data science
will contribute to great experiences,” said Loftis.

Related Article: The 3 Key Components of a First-Party Data Strategy


DATA SCIENCE FACILITATES HYPER-PERSONALIZATION

A report from Epsilon indicated that 80% of customers are more likely to
purchase from a brand if that brand provides them with a personalized
experience. Likewise, a report from Accenture revealed that 91% of those polled
are more likely to do business with a brand that knows them and presents them
with relevant offers and recommendations. 

Contrast that information with findings from a Forrester study (registration
required for download), which revealed that 90% of brands see personalization as
critically important to their business strategies, while only 39% of consumers
said they received relevant brand communications, and 41% said they received
valuable offers. Clearly, there is work to be done when it comes to providing a
personalized customer experience.



Even personalization may not be enough for today’s customers, who now expect
hyper-personalization, which takes personalization to a much higher level.
“Hyper-personalization is getting lots of buzz,” said Loftis. “This involves
using data science and AI to create contextual communications and experiences
for every single customer — to fit their specific and individual needs — along
every step of their unique journey.

"This is a drastic shift from mass marketing, from customizing communications to
customer segments and even from contextualizing to certain high-value customers
or in certain channels. This is truly marketing to a segment of one — for every
interaction.”

“Deloitte predicts that 75% of companies will invest in hyper-personalization
with the express intent of increasing personalization, helping people to feel
more connected and offering more inclusive experiences,” added Loftis.
Hyper-personalization pays dividends, as Deloitte also predicts that it can
result in an 8X higher marketing ROI and a 10% sales lift.

A great example of how brands use data science to improve customer experience is
Boots UK, a British health and beauty retailer. With insights using the IBM SPSS
Modeler, it lifted incremental spend through personalized promotions for their
loyalty card customers. It then used those insights to offer relevant promotions
to customers.

By leveraging data from its 15 million Boots Advantage Card customers, the
company built predictive models matching transactions to individual loyalty card
customers, allowing it to determine the next best action for individuals based
on preferences and purchase history. The result was a 70% increase in
personalized messages, along with a visible increase in incremental spend from
loyalty card customers.

Ajay Khanna, CMO at Explorium, an external data enrichment and integration tool
provider, spoke with CMSWire about the ways data science enables brands to
provide hyper-personalized experiences to their customers. "Data science is
critical to delivering hyper-personalized experiences. Delivering to customers
what they want, when they want and via the channel of their choice needs a deep
understanding of their behavior and preferences," said Khanna.



"Getting that understanding starts with data. Data-driven organizations use
their internal data and enrich it with many external data signals from various
sources outside their four walls to build rich customer profiles."

Related Article: The Perfect Storm Propels Personalization Into Must-Have Status


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meaningful insights?

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The State of Outbound Communications
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DATA SCIENCE FACILITATES A BETTER CUSTOMER JOURNEY

Michael Bamberger, Founder and CEO of Tetra Insights, a qualitative research
software solution provider, told CMSWire that brands use data science to build
beginning-to-end customer journey maps.

“The first motion companies are taking is implementing the right 'sensor' data
collection — that is, capturing the interactions and associated metadata from
each individual customer,” Bamberger said. “From there, they can build
comprehensive customer journey models to understand how individuals move from
awareness of their company all the way through transacting, returning and
evangelizing.”

Once a brand has created the entire customer journey, it's in a much better
position to enhance every touchpoint the customer has with it. “Basically, by
collecting the right data, finding models of positive customer journeys and then
optimizing to compel people along those tracks, businesses are creating a
customer experience that achieves their business goals by understanding what is
most valuable and compelling to their prospects,” said Bamberger.

Avinob Roy, senior director of product management at IQVIA, a healthcare data
science company, spoke with CMSWire about the ways that data science is used to
improve the customer experience. Roy said that due to the massive increase in
data pushed to potential customers across multiple channels, brands are finding
it challenging to stand out from competitors. The increase in data, however, can
be the very tool that enables these brands to enhance and improve the customer
experience. 



By leveraging customer data, brands are in a better position to be able to
understand their customer’s preferences — what they like, dislike and are
potentially interested in. “Data is essential to understand customer preferences
to drive better engagement with highly personalized and relevant content," said
Roy.

"Modern data platforms and AI-driven technology use multi-source datasets to
learn over time what the customer is looking for, much like Netflix recommends
new content based on past activity. These learnings translate to actionable
recommendations for engagements surrounding what action, communication channel,
content and piece of information will best resonate with customers. Demographic
information can be used to optimize engagements.”

A brand needs to ensure it has a well-defined data strategy, along with a
unified data management solution, to effectively improve the relationship
between the customer and brand.

“When considering an approach to leverage data for optimized customer
interactions, a unified data management solution with AI-supported embedded
intelligence and analytic processes enables companies to better design and
deploy marketing strategies based on data,” explained Roy. “It’s critical for IT
and data managers to have a clear strategy and roadmap for data acquisition,
data integration flows, data governance and stewardship, as having clean
refreshed data is key to impactful insights that lead to better adoption with
end-users.”

Explorium’s Khanna suggested that brands are using data science across all
customer-facing functions, that it should be at the core of the entire customer
journey and that it depends on having clean, relevant data.

“In marketing to deliver personalized offers at the right time, in sales for
precise lead scoring and prioritizing targets, in support to predict and respond
to any customer queries or complaints and to determine ongoing purchase or churn
propensity,” said Khanna. “So, data science is the backbone of end-to-end
customer experience from marketing to post-sales.



"However, the effectiveness of data science or the performance of machine
learning models depends on the quality and relevance of underlying data. Having
access to the right internal and external data, quickly bringing them together,
and using them to determine the next-best action in the customer journey is
vital to delivering the desired and connected customer experience."


FINAL THOUGHTS

Data science combines a wide range of skills to analyze data from various
channels to obtain actionable insights. These insights allow brands to enhance
personalization, deliver more relevant advertising and recommendations and
improve the overall customer journey.


ABOUT THE AUTHOR

Scott Clark is a seasoned journalist based in Columbus, Ohio, who has made a
name for himself covering the ever-evolving landscape of customer experience,
marketing and technology. He has over 20 years of experience covering
Information Technology and 27 years as a web developer. His coverage ranges
across customer experience, AI, social media marketing, voice of customer,
diversity & inclusion and more. Scott is a strong advocate for customer
experience and corporate responsibility, bringing together statistics, facts,
and insights from leading thought leaders to provide informative and
thought-provoking articles.


TAGS

artificial intelligence in marketingmetrics and analyticscustomer journeys and
mappingdatacustomer relationship managementcxmomnichannel
marketing#martechoperational customer data platformsdxmpersonalization
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For nearly two decades CMSWire, produced by Simpler Media Group, has been the
world's leading community of customer experience professionals.

.

Today the CMSWire community consists of over 5 million influential customer
experience, digital experience and customer service leaders, the majority of
whom are based in North America and employed by medium to large organizations.
Our sister community, Reworked gathers the world's leading employee experience
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