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Following Digital Footprints to a World of New Insights

November 13, 2014 by Andreas Schmitz

With its power to help identify customers who don’t pay their bills, who frequently return goods, or who may be at risk of churning, online data is often dubbed the “new oil.”

Telecommunications, media, travel, logistics, and professional services sectors are tracing digital footprints to gain key business insights: What is our customer dissatisfaction rate? Which machine parts are aging and need replacing? Which customers pay their bills late ― if they pay them at all?

Whether the data relates to customers, machines, or processes, identifying relevant information and being able to leverage it to derive effective courses of action makes companies’ lives easier and allows them to embrace completely new business models.

“The telecommunications, media, travel, logistics, and professional services sectors are among the main ones to profit from the power of digital footprints,” says Business Development Manager Christian Schönauer, who is responsible for these industries at SAP.

Next-best offers: serving customers with precision

In consumer-centric industries such as telecommunications and media, the main priority is to get to know users or readers better and anticipate what they will want next ― or at least predict pretty accurately what they are likely to do next. The worst-case scenario for any company is a customer “defecting” to a competitor unnoticed.

In the online world, customer dissatisfaction cannot manifest itself through physical and verbal expressions of annoyance in the same way as it would in a brick-and-mortar store ― so technology needs to step in to pick up the negative vibes. Enter “customer churn analysis,” which uses data-mining technology to examine dissatisfied customers’ behavior patterns, such as calling the company hotline to complain and searching intensively for competitor products online.

Information like this is crucial to helping enterprises make relevant, personalized recommendations – known in the trade as “next-best offers” – in order to avoid churn and strengthen customer loyalty. In the world of audience intelligence, says Schönauer, companies are constantly asking themselves the same question: “What else might appeal to this customer?”

Tracing and analyzing the customer’s digital footprint down to every last detail can provide the answer.

For example, if a customer calls the hotline to complain about a product and then visits a store to speak to someone face to face, he or she should not have to explain the problem all over again from the beginning. It should be enough to simply enter the person’s customer number to display their entire customer history – including competitor sites they’ve visited and negative comments they made to the hotline. After all, in today’s saturated markets, good service is a key differentiator.

Teleshopping channel HSE 24 uses information collected from various sources to support its sales operations. A key factor in the company’s business success is its returns rate. If a company has 1.5 million customers and ships 11.5 million packages every year, reducing returns rate by a mere one percent can already save millions of Euro, says Michael Künzel, vice president of IT at Home Shopping Europe.

SAP Predictive Analytics and SAP Audience Discovery and Targeting can help achieve savings on this scale by enabling enterprises to find out as much as they possibly can about their customers and thus anticipate their wishes with precision.

Reminders: Getting customers to settle up faster

As well as winning customers and ensuring their satisfaction, companies obviously want to see the payments due for the goods and services they provide reach their accounts without undue delay. Telecoms supplier 1&1, located in Montabaur, Germany, is now collecting payments from its 11 million customers much faster by running its business warehouse on SAP HANA. According to 1&1, the project to implement the SAP Telecommunications/RM-CA (revenue management contract accounting) industry solution paid for itself in just six months.

Thanks to faster and more refined payment reminder processes, the value of outstanding payments recouped over this period was enough on its own to cover the costs of the project. Christian Beinhauer from 1&1’s SAP Competence Center attributes his company’s optimized reminder processes to the fact that it is now possible to deal with complex issues faster and to identify customer payment patterns much sooner than before.

Industry 4.0: The maintenance service providers are coming

SAP HANA uses the same technology to find out whether customers pay their bills or whether a machine component is old and needs replacing. When it comes to applying this technology to Industry 4.0, inspection organizations already have a vision in mind. Through machine-to-machine communication, personnel working at monitors in a control center will be alerted whenever a component in an elevator or industrial facility urgently needs replacing and instruct a member of the service team to travel to the relevant location.

“It is quite feasible that inspection service providers and facility management companies will one day take over full responsibility for servicing machines and buildings,” says Schönauer, looking ahead to the future. Because they can collate data from different manufacturers and suppliers and are specialists in their field, the chances are that they will be able to handle service and maintenance tasks more cheaply and professionally than the actual product manufacturers themselves.

All kinds of companies – not just those from the professional services sector to which technical inspection organization belong – are likely to profit immensely from Industry 4.0. In the travel and logistics sector, for example, rail and airline operators will be able to reduce idle times or even avoid them completely by diagnosing at-risk components before they start causing problems.

“All of these sectors of industry are going to see completely new business models emerging,” says Schönauer. “Speed is a central factor, but the really crucial point here is that a real-time platform breaks down existing structures, data silos, and processes and opens the door to completely new insights and marketing concepts.”

Photo: Shutterstock

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