SPSS - News Room

Opinion piece

The blogosphere and beyond

~ Heena Jethwa, product marketing manager for SPSS, advises on how to get an inside view of customer feedback ~

The era of Web 2.0 is well and truly upon us, bringing with it new and exciting opportunities for gaining customer insight. You could say an online conversation has begun, and our customers are talking to each other without us. Most of the time, we don’t know what has been said or what impact it will have. The proliferation of Internet access has stimulated new forms of conversations – blogs, chat, social networks, forums, message boards, and other electronic communication channels which are enabling customers to openly discuss their views, opinions and experiences with each other. Customers are listening to each other and they trust the information that they hear.

In today's competitive environment we have a decision to make: do we adapt our business processes and customer contact strategy to the online world now, or do we sit back and wait? If we look at the value placed on these collaborative forums by our customers, then the decision is simple and it's a case of how rather than when.

A study on the influence of blogs in Europe by Ipsos MORI¹ revealed that a quarter of Europeans trust what they read on blogs or message boards. Further to this, the research showed that a third of respondents have decided not to buy a product or service because of comments written by private individuals. With customers’ opinions now widely available on the majority of web stores, and the potential impact it has on the perception of an organisation by the public, businesses need to know what is being said about their product or service.

Organisations who wish to remain competitive need to adapt to what customers are doing. More importantly, organisations need to start listening and understanding what their customers are saying, and make sure that this insight can be put into action. How do we capitalise on positive comments or take steps to manage negative comments? It’s all about taking action on what is important to customers and what we can do to increase revenue and manage risks.

This means that besides traditional feedback collection techniques, we should also concentrate on blogs and social networks. Both the traditional, structured data and the new unstructured data are equally important and useful to gain customer insight. New data sources are just part of the evolution in fully understanding our customers.

Many organisations have already implemented Enterprise Feedback Management strategies – an approach that allows them to fully engage with current or prospective customers and use that information for customer-centric decision-making throughout the organisation.

But, for organisations to achieve a truly holistic customer view, they need to extend traditional EFM strategies and incorporate unstructured data such ascall centre logs, emails and Web 2.0-based tools, such as blogs, RSS feeds and web discussion forums. At SPSS, we refer to this as EFM 2.0. It is the powerful combination of, and understanding across, all available data sources that allows us to be more competitive, provide a better customer experience and improve our business processes. Analysts claim that while before, we’d have to choose whether to pursue qualitative or quantitative research,
we can now easily offer the combination of the two.

Initially, the advent of Web 2.0 data might feel like an additional headache rather than an opportunity. To some extent, it seems there is also a cultural block: with feedback obtained via surveys, many companies already collect, store and analyse customer data and know how to use it, whereas companies are still not sure what they could do with data collected from blogs and web forums.

Currently, only the larger business-to-consumer companies have the resources to include Web 2.0 data in their analysis. However, as the use of these communication channels increases and becomes more commonplace, the amount and importance of this information also increases dramatically. The ability to locate this information quickly, parse out the relevant information accurately, and marry it with other data sources in order to share insight from this combined view across the organisation becomes a true competitive advantage.

Text mining levels the playing field and allows users to tap into this valuable information stream and lighten the burden of information overload. This is being achieved by extracting knowledge from unstructured text data and identifying core concepts and trends that can be analysed for better business decision-making.

Take Switzerland’s largest cable network operator, Cablecom, as an example of a company successfully moving toward a holistic view of the customer. Having started by implementing a predictive analytics strategy based initially on transactional data, it then incorporated EFM by including attitudinal data, which increased its customer knowledge and enhanced customer interactions. The company recognised the key to tackling churn was to identify the point at which customers become dissatisfied before they decide to switch to an alternative provider.

Cablecom now solicits detailed customer feedback to better understand the customer and assess his or her likelihood to churn. The company is able to accurately identify those customers who are likely to churn, and take proactive measures to improve retention. Early pilot studies showed that customer churn rates were reduced from an average of 19 per cent down to just two per cent. Cablecom is now including text mining and sentiment analysis in different languages to aid further understanding of its customers. For companies like Cablecom with a multi-lingual customer base, and global companies operating around the world, the ability to analyse customer comments in different languages is a key breakthrough.

However, in spite of the growing importance of unstructured data, we must remember that it’s not about choosing one form of customer information over another. A choice precludes comprehensive analysis and true data-driven decision-making in spite of the quality of information that lies on the Internet. Web 2.0 data should not be looked at in isolation or lead to traditional sources, such as transactional and structured survey data, being overlooked – findings must be integrated. Our customers communicate in many ways, and our challenge is about taking these streams of data and information and acting on them, so customers know we are hearing what they have to say and, most importantly, that we are doing something about it.

¹ Ipsos MORI, The Power of Blogs in Europe, 2006 (Europe refers to Great Britain, France, Germany, Italy and Spain)