Best Buy rises to the single view challenge
Developing a single customer view for Best Buy Europe will entail integrating data for Best Buy UK, Carphone Warehouse, Geek Squad and The Phone House. Director, Best Buy Europe, Anne Brunsdon is taking it one step at a time…
Aggregating data across an organisation into a single customer view is a formidable task. Like painting the Forth Rail Bridge, it seems to be never-ending.
So imagine the mission ahead for Anne Brunsdon, Best Buy Europe customer marketing director a role that includes looking after the Carphone Warehouse, Phone House, Geek Squad and Best Buy UK brands. Her task is to integrate all customer data across the group into a single customer view that will enhance return on investment (ROI), customer satisfaction and operational efficiencies.
Brunsdon devised a 10-step plan (see box, below) to bring about a “cycle of continuous improvement”. She started the process with Carphone Warehouse and its European equivalent, The Phone House, while Best Buy was incorporated more recently. From the start, Brunsdon has insisted there is no timeframe for the project, but she has been with the company for six-and-a-half years and is currently on step five.
“There was a clear need to do this,” says Brunsdon. “We were already communicating with customers and there was a clear business case for crossand upselling.” She explains that key benefits of the single view include preventing wrong contacts for example, avoiding cross-selling customers a product they already own as well as matching sales to activity and being able to measure return on investment.
But since Brunsdon is roughly halfway through after nearly seven years, it’s easy to see how a project of this magnitude would require an enormous leap of faith from her paymasters.
“It’s a step-by-step plan so there’s an incremental benefit. The ROI of below-the-line communication is easier to measure and the strategy is easier to get people behind. So far, each step has made sense to the organisation. Each step will be weighed on its own merit,” she says.
So by proposing a plan that has a long-term benefit but a series of short-term incremental returns, was the idea going to be a shoe-in to sell to the board?
Best Buy UK may be part of an established brand, but it’s a start-up from a data perspective
“Going to the board with this was a little like being in the Dragon’s Den scenario. I needed to get the investment from them but there was a clear sense of ROI in step three.”
Brunsdon says she didn’t take the whole plan to the board in one go. Rather, she focused on breaking it up into smaller, more manageable projects with quicker returns and less investment. The idea is to have a long-term strategy with investment projects in it that are small and quick to deliver returns.
It is hard to imagine Brunsdon, a no-nonsense Australian, getting a dose of nerves when putting her case, but she had to be packing some steely resolve to get the job done/ “It was me in front of a panel of ten people. I had my boss with me, who was supportive, but I had to have conviction and confidence in myself.” Brunsdon adds that she knew a number of others in Carphone Warehouse supported her plan but she had to be the one to sell it.
Despite her self-belief, Brunsdon knew the only sensible way to proceed would be to provide alternatives. Even though the project was designed to progress in a series of almost self-contained stages, it was a lot to digest in one presentation. “We had a fallback option. There were three levels of commitment and the project could be started slowly. Luckily, they went for the full package.”
So Brunsdon set out on her 10-step programme, not beginning with the simplest of tasks the single customer view (SCV). In Carphone Warehouse’s case, it was even more complex: “It was a very painful process, especially as we did it in nine markets. We’re about 90% there. It gets difficult in pushing it to the stores,” she admits.
The programme’s success will be down to staying flexible. Technology and data will change
Equally, there is the growth of Carphone Warehouse to consider over the time she has been overseeing this project. When she began, Brunsdon only had the legacy data from Carphone Warehouse and The Phone House. In 2007, the company launched Best Buy’s ’Geek Squad’ the US company’s technology support arm in the UK, and in 2008 it announced a partnership that led to a number of large footprint electronics stores opening in the UK under the Best Buy brand. This led to the Carphone Warehouse group being renamed Best Buy Europe.
In addition to existing Carphone Warehouse customers, a new data set was thus added to further complicate Brunsdon’s first step towards the single customer view. “Best Buy UK may be part of an established brand, but it’s a start-up from a data perspective,” she says. “When it comes to integrating all this data, it helps that we had already done the hard work with Carphone Warehouse.”
Creating a single customer view here involves integrating any number of processes across the group, from the customer’s transaction to the point-of-sale system, and from there to the data warehouse. It is then transferred to the campaign management tool, which takes the interaction back to the customer through direct marketing of some kind, perhaps through customer service in the Geek Squad, once more to campaign reports and then finally to the data warehouse, where the single customer view is unlocked.
But it’s not plain sailing. “In terms of having one version of the SCV, it relies on a set of rules, such as the same date of birth format. Within different markets, these rules can be different. Given that the process is largely automated, there has to be some human tinkering around the edges.”
From here, the SCV feeds into the purchase lifecycle using data to understand the frequency and pattern of purchase to define and benchmark retention. In Carphone Warehouse group’s case, 11 months after purchase is a key retention point for the bulk of its pre-pay customers as handset upgrades roll around.
50% Incremental gross margin increase for Carphone Warehouse
However, steps one and two are all about expenditure and have nothing immediate to offer in terms of ROI. So Brunsdon made step three all about possible incremental gain crossand upselling. Using the information gleaned from steps one and two, Carphone Warehouse began testing and learning from a plan of timely and relevant activity that would optimise value and generate short-term ROI. In this case, the activity was cross-selling across insurance and accessories, and upselling from pre-pay to post pay (top-up to contract). The incremental gross margin increased by 50% and the ROI was £3.30 for every £1.00 spent.
While the implementation of a 10-step data plan was breaking new ground for a retailer such as Best Buy Europe, the accounting for it was also uncharted territory: “It’s an ongoing challenge to have direct marketing return written into real-time reporting,” says Brunsdon. “Usually, it’s done over four weeks, not integrated with the weekly reports. So when you do a presentation with the finance director like this, they are surprised.”
Surprised, but perhaps pleasantly so. “I spent a lot of time with the finance department so this project isn’t about my story and their story it’s about both of us working together on one story,” she adds. Brunsdon points out that, while beginning a large-scale SCV programme such as this can have massive cost implications for an organisation of this size, costs were kept to a minimum and could not be viewed as ’expensive’.
“Overall, it was relatively inexpensive compared to others who implement a single customer view,” she says. “Our SCV used existing technology and we worked with [supplier] Trillium. We export the data to them and they apply the rules and send it back.”
From here on, it was possible to see the rolling benefit of the 10-step programme. Brunsdon explains: “Testing loyalty initiatives [step four] uses the ROI from step three to self-fund loyalty test activity.” In this case, rewards such as chocolate giveaways and two-for-one restaurant cards were sent out as part of loyalty programmes to show the value of enhancing customer data.
The loyalty programmes also encouraged deeper interaction with the brand through targeted competitions and integrating the social element for data capture and brand ambassadorship. Loyal customers would forward deals and marketing materials, such as Christmas-themed games, to their social circle during critical buying periods. “The engagement metrics garnered a higher net promoter score (NPS) and increased brand interactions. We are planning to track retention from this step in the future,” says Brunsdon.
In terms of enhancing data management, 1.2 million email addresses were captured. If the group had paid an agency to gather the email addresses, the cost would have been about £2 each. There was also far greater consumer understanding from the segmentation activity around the loyalty tests. Accurate targeting, personalised loyalty rewards and promotions all add up to the key outcome Carphone Warehouse Group is seeking from the project happy customers.
“Now we have reached the point where we are trying to measure retention and calculate the longer-term impact of steps one to four to demonstrate the improvement in retention,” says Brunsdon. “Aside from those we have already retained, how does Carphone Warehouse group improve on the rest? Where are the low-hanging fruit?”
In this case, the company is looking to retain customers who have subsequently made no further purchase, have bought via a network or have purchased from another retailer. Step six will be to take the loyalty testing and implement a formal loyalty programme based on test learnings and customer insight. The idea is that this will lead to a structured framework that delivers retention and drives benefits for customers.
While Brunsdon has set out her plansin a further five steps, she insists that the process is still fluid as a matter of necessity: “We have pretty much made this up as we’ve gone along. We have been seeing presentations from other people, noting great ideas and adding them in as recently as two months ago. I expect this to continue to change so I have no specific time structure for the completion of the project.”
Looking forward, steps seven through to 10 largely focus on using the information garnered in the data collection, aggregation and testing phases to improve the company’s relationship with its customers at a variety of touchpoints.
Step seven is all about creating the business case for the ongoing project, monitoring and measuring customers’ good and bad experiences and their impact on retention. Brunsdon will compare the NPS, percentage churn, customer lifetime value, revenues generated and the tally of customer experiences, termed ’magical’ or ’miserable’.
Step eight will add to the data in the single customer view and the purchase lifecycle by investing in a holistic view of customer-generated data, such as social media interactions, customer surveys and reviews, plus transactional data from point-of-sale or interactions with technical support from Geek Squad.
The penultimate step will help the organisation to reach a point where the wrinkles are ironed out and it is operating at a level where its customer relationships are the best they can be. The simple idea is that with the rich insight available, it should be clear to Carphone Warehouse what needs to be fixed or how to reduce the negative impact of some service-related issues to reduce the miserable moments and increase the magical ones.
Step 10 is not so much a conclusion of the data project, but the finally levelled playing field from which all future Best Buy Europe success will hopefully stem Brunsdon’s “cycle of continuous improvement”. She hopes that future customer interactions will be ruled within the virtuous circle of defining, measuring, analysing, improving and controlling. This cycle, she suggests, will “identify key learnings, generating the optimum customer retention and value”.
What that optimum value will be seems, like much of Brunsdon’s programme, to be a moveable feast. She insists that the success so far of the plan, and its future worth, depend on its fleet-footedness: “The programme’s success will be down to staying flexible. Technology and information will change.”
In terms of overall ROI, and how soon the board can expect to see a financial conclusion to the project, Brunsdon is equally reluctant to put a final marker in the sand: “There is an added future benefit with each step but it is much better to deliver results now than five years down the line.”
Best Buy Europe’s 10-step data plan
Create the single customer view
Identify the purchase life-cycle
Create cross- and upselling opportunities
Test loyalty initiatives
Create a loyalty programme
Improve the customer experience
Develop a 360-degree view of the customer
Implement service improvements
Arrive at the cycle of continuous improvement