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Retailers are you ready for 2018?

February 12, 2018

Sam Richardson

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Retail continues to be at a tipping point with shoppers that are drastically different than even 3 years ago, and still many retailers are using a model that – at times – is over 50 years old.

Modern retail as we know it started with using scale to deliver a huge amount of goods to the consumers at a radically lower price. These retailers thrived on being experts a running retail at scale, efficient purchasing, logistics and the large outlets that consumer went to in order to get the low-priced goods. This led to the rise of the malls and super stores, with Walmart leading the way.

But today’s retailing has shifted with the rise of technology. Amazon launching smart shopping, the e-tailer being able to offer a depth and breadth of assortment unheard of for a traditional retailer.

Which brings us to the question – are retailers ready for 2018?

We keep hearing the same stories over and over again.  Poor service, store closings, empty shopping malls. In 2017, we saw a record number of store closures, nearly 3 times the number in 2016, and according to many this trend will increase in 2018.

Is the Brick & Mortar retail business destined to completely fail?

For many years, stores have had the strategy of being building more locations to be “more convenient”, but there are others that now compete on convenience instead of just location – which is what “more stores” really means.

What’s interesting is the stores that are shutting their doors – we see highly specialized stores like Radio Shack and Payless closing, along with many clothing retailers. But while we talk about all these locations closing, there are some brands that are expanding drastically to the tune of over 4K+ stores opening.

When we look at these, we see Value, Price, Convenience and EXPERIENCE (O´Reilly Auto might not be a store many of us have gone into, but everyone that works there has experience of cars and are really passionate about what they do – not someone that just applied for a job).

So, if scale and efficiency was the way for the 20th century retailer, focus and specialization will be the 21st century’s winning recipe. Because, in today’s rapidly changing competitive environment you have to choose what your competitive edge will be, is it:

  • Convenience
  • Assortment
  • Low price
  • Experience

We argue that it is very hard to choose all. There are no right or wrong choices, you just have to make one and then commit to it 100%.

What does this mean for the brick & mortar retailing?

Looking at the inherent strength on the physical world compared to that of on-line world:  the person to person interaction gives brick & mortar a strategic advantage in the area of customer experience (CX). All the other, and on-line is as good or better equipped as Brick and mortar. This said, you can be very successful when running a brick & mortar 2018 with other strategies than Customer experience. Some examples: Price (Lidl, Dollar general), Assortment (Victoria Secret) and Convenience (7-eleven).

However, regardless of your chosen strategy, a company that wants to evolve and prosper must be equipped to handle rapid change in customer preference and behavior as new technology is introduced to the market, and make no mistake, the rate of change will increase. Things such as Robots and machine learning are already changing the way we do business, but has yet to really show its true potential in the off-line world of retailing.

The CX strategy – a winning path for retailers

Unless you’re going to drastically change what you sell or have plans to become a discounter, there is one approach that really can change the way your customers view your business without “confusing them”, it’s called the CX strategy, or just plain CX.  The CX strategy takes time to implement and the rewards might take some time to collect, but when you do excel in customer experience you enjoy high margins, fiercely loyal customers and organic growth.

In order to be really CX centric, you need to do things on a strategic, tactical and operational level. One or two alone will not suffice. So, what do we mean by strategic, tactical and operational level?

Strategic – the foundation

Even though you need to work on the CX strategy on all levels, it starts at the top. There are three major pillars that needs to be in place to hold up the CX strategy:

  • Top management must genuinely believe in the CX strategy, it can’t just be something that they say and put in the annual report. It must be something that they live, breath and sleep.
  • You must supply the organization with the right tools to understand the customer (HR, customer service, customer feedback systems etc.).
  • Finally, it must be a long-term effort. The organization must be resilient. A successful CX strategy takes time to implement all the way to the front lines.

Tactics – the bridge

There are three major areas that you as an organization must ensure on a tactical level to be a truly customer centric company:

  1. Empower the employees (link to my “magical experience” blog post)
  2. Think local! With such a diverse market place, you should give command to the people on the ground. Provide them with local intelligence in terms of: where are we winning/loosing, which are our strongest local competitors etc. Then let the local manager make the judgement call.
  3. Ensure that the HR process really embeds customer focus in its hiring and development programs. Award people skills and genuine customer interest. Create champions and good examples.

Operations – The moment of truth

The customer centric strategy comes down to the personal interactions between your business and your customers, the moment of truth. These are directly or indirectly always the result of your employees on the floor. If you give the right set of tools, and if they have the right mindset, you will be hard to stop in your market place. This has been proven again and again.

However, a word of caution: Never relax, always use data to monitor your customers, competitors, your business, stores and managers, because you can always improve and aggressive competitors are just around the corner. How can you ensure that? Through a comprehensive analytics platform!

Analytics at the heart of your CX initiative

Although there are many important tools that you must have to implement a CX strategy successfully, we at Nepa believe that the analytics platform should be at the heart. With analytics you can have the customer centricity of the old convenience store, but at scale! But to have an analytics platform that can achieve that, you must use a platform that merges 3 dimensions of data:

  1. behavior (x),
  2. sentiment (y) and
  3. financial ($).

Let’s go a little deeper into each of the necessary data sets:

Behavioral data (x-data)

The behavioral data is basically the existing BIG data stream within the company. It looks at the patterns and build forecast models based on historical behavior. It will detect anomalies and be able to predict changes.

The shopper (y-data)

An even better analytics platform will enable you to understand the shopper in the context of their behavior, often referred to as the Y, i.e. you need to understand why the customer is behaving the way it is in order to be able to predict how it might impact your business.

Financial impact ($-data)

And finally, a true CX analytics platform is tying that behavioral data and shopper insights into top and bottom line results. Enabling you to successfully predict where to invest you hard earned dollars to get the best possible return, this based on your chosen strategy.

An analytics platform implemented in the right way will act as a catalyst for many of the key elements for a successful business. It will:

  • Show to top management how shopper drives their business.
  • Provide local managers with local, tactical information.
  • Build stories that resonates emotionally in all employees.
  • Keep tabs on changes in customer behavior and how those impact your business.

A true CX analytics platform will be the catalyst for change that you need. Let us discuss how to evolve your analytical tools for your CX platform to be a true catalyst…! Please don’t hesitate to contact us.

If you want to listen to our webinar that goes more in-depth into retail trends, and why customer experience is really the difference in competing in 2018. Here is the link .

Erik Enecker
Chief Product Officer at Nepa USA & COO Global Product at Nepa

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The value of a magical experience!

January 12, 2018

Sam Richardson

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Both of my sons’ hands where all sweaty as they looked up at the huge snow-clad mountain. You could see the desire and fear battling in their eyes. Was it fun, was it dark, what would happen, was it to scary? You could see the result of the battle shifting as they heard the laughs and screams coming from all the people riding it. And here I was, the impatient dad, “Do you want to go on the ride or not? The line is 40 minutes long and I don’t want to stand in line for 40 minutes for you to back out in the last minute”.

I know, I’m a very patient and understanding father, I know. My ten year old looked at me, then at the ride, then back at me again… ”I don’t know… I want to, but what if it is too scary?” My six year old just looked at his brother with big eyes and squeezed my hand.

As a man of action, I finally went up to one of the staff (sorry cast member), and asked the young lady; “Is this ride scary? The reason I’m asking is that my kids are really hesitant and we don’t want to wait in line and then have a bad experience.” She looked at my kids, asked them, not me (also a pretty unique experience) what they wanted. Again, “don’t know, scary, want to but…”, from my 10-year old. Then came the magic, the young lady said to my sons “you know what, if you want, I can get you to the front of the line right now, and then you can decide right away… If you want to go on the ride, jump in, otherwise you can continue enjoying the rest of the park”. Speechless, my sons nodded their heads, and I gaped. What, just like that? She took my sons hands and led them around the whole line and spoke to her colleagues. The last I heard as we approached the ride was the young lady saying; “It’s a magic moment”, and that it truly was!

Two weeks ago, on a Christmas inspired round table discussion around customer experience with some of the industry’s leading CX experts, an interesting discussion emerged. What do companies that create a truly unique customer experience do, to get employees that are sincere in their will to create a truly exceptional customer experience

How do they do it?

I would say, thinking back on my own Disney experience, that each employee, given the right tools, can provide customers with magical experiences every day… But why don’t they?

I would argue that one of the major reasons are lack of empowerment. A common mistake is trying to micro-manage customer interactions, restricting the employee in servicing their customers. This is a growing trend that I have observed over the last 10 years. Today, all too often I hear the phrase “I have to check with my manager”, even for small things, like returning a 1,50 Apple at the local supermarket.

And it seems that Disney agrees with me.

I have been working with CX improvements for a long time and empowerment is one of a couple key areas that needs to be addressed if you want to create a magical customer experience. Contact me if you want to discuss how to use analytics to fuel empowerment, culture or something else that stand between you and magical customer experiences!

And yes, my kids went on the ride, and will forever remember the magic experience!

Erik Enecker
Chief Product Officer at Nepa USA & COO Global Product at Nepa

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What you learn when world class CX leaders come together

January 11, 2018

Sam Richardson

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As the holiday spirit swept into New York in early December, Nepa hosted a round table discussion with CX leaders from the retail, hospitality and entertainment industries. Companies that are on the top of their games. Literally the Louisville City FC had just been crowned USL Champions, while a national retailer was riding high from a strong Black Friday performance, and an international hotel chain that is posting RevPar growth amidst difficult conditions.

I think I speak for all when I say one of the biggest takeaways was simply the value of meeting with leaders for other industries to share experiences. This open venue allowed for open dialogue about overcoming challenges to make an organization be customer led and brainstorm about the future.  My professional new year’s resolution is to organize similar discussions. Comment below if you’re interested!

Without further ado, here are 4 key themes from the discussion.

1. Measurement is necessary; Story-telling leads to Success

There was a lot of talk about Executive Support. Funding alone is not sufficient – executives must evangelize CX programs through (and beyond) the organization to demonstrate their importance. Chick-fil-a – a company that has not been shy about its commitment to service – was mentioned frequently as a company that delivers great customer experience.

Not all measurements are created equal though, and measurement alone is not sufficient. The ability to translate CX measurement into financial predictions gives them more weight with analytical leaders. And, the best measurements need to be woven into stories that inspire all staff to be customer-obsessed. This is important for an industry that has too long relied on dashboards to inspire change.

2. Customers’ Experience your brand at the Front Line

Whether it’s an employee that lacks the empathy for a customer’s situation or a Disney employee that turns a problem into a Magical Experience – customers’ experience your brand at the front lines.

A common problem shared by CX leaders across industries is motivating and empowering front-line staff to deliver great experiences. This is especially important amidst increased reliance on partners to carry out parts of the experience in the gig economy.

Serving up CX dashboards and analytics are not sufficient – as data analytics rules the day in many corporate HQs, it does not on the front lines. While we didn’t solve this problem in an afternoon, there were some great tips shared:

  • Give authority to make the right decision for customers.
  • Provide the right decision support (e.g. customer data and focus on what is most important to get right).
  • Lead with passion and purpose – everyone need to see leaders putting customers first.
  • Communicate in the language of those in the front lines of your business.

3. Focus on the Customer over the Competition

Jeff Bezos (not in attendance) has said “If you’re competitor-focused, you have to wait until there is a competitor doing something. Being customer-focused allows you to be more pioneering.” This brilliant round table made similar points about the importance of being led by customers, not by your competitors.

A hotelier shared about how innovation to the room key by a competitor sent senior management into a frenzy to catch-up. But, their own customer data showed this innovation was not important to its customers. Chasing the competitor could have diverted valuable resources from delivering on what’s important to customers.

The point is simple here – have conversations with your customers and act on their needs and wants.

4. The attention economy – from Customer Experience to Customer Engagement

Anne Roggeveen, Professor of Retail and Marketing at Babson college, kicked off a discussion around the “owners” of different touchpoints – that is brand, partners, the customer, and externally (e.g. social/independent). In an increasingly connected and always-on world, the balance of touchpoints has shifted away from brand-owned and towards touchpoints owned by customers, partners, and other external sources.

With less control, Customer Experience needs to broaden to Customer Engagement. It is more important now to engage customers even at the touchpoints that you don’t own (e.g. review sites) and interact with customers beyond your traditional lines of business (e.g. branded credit card that builds loyalty through all a customer’s purchases). Journey Mapping and Path to Purchase solutions are making new strides in understanding all touchpoints along the journey, both on and off line.

You can also engage to help mitigate a bad experience at a partner touchpoint along the path to your brand (e.g. solving for a bad parking experience that is not owned by the sports club).

That’s it for now – there was some great content from this discussion that was left on the cutting room floor – please feel free to comment or email me ( to discuss more about CX trends heading into 2018. And, let me know if you can help me out with my resolution to participate/host more of these discussions this year.

Sean Dunn
Vice President, Client Solutions at Nepa USA

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How to steal foot traffic from competitors

December 12, 2017

Sam Richardson

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Know what drives customers to walk by your competitor’s store and into yours, to drive more visits and more sales

What is it that Draws shoppers to stores in less convenient locations? I mean, if convenience was the only deciding factor, that would never happen. How can you as a retailer understand the outside draw and take actions that influence shoppers into taking a “Detour” to your store?

Groceries, it is a recurring chore that I, as a family father of three sons, need to complete all too often (with 6 gallons of milk and similar amount of yogurt each week, they tend to reoccur often). I usually go to Publix because it’s convenient and has a great assortment. But lately I find myself wanting to go the long way, looking for another store. I frequent Costco more and more, visit Aldi and Walmart even though they are much further away. I take a detour, go the extra mile to shop at a different location. Why do I take a Detour?

The understanding of why your shoppers take detours is one of the golden key‘s to increase visitation, and sales!

Are your shoppers really your most valuable asset?

The retailer is still essentially a merchant who makes money from the supplier through its services: store, shelves, shoppers and displays. And advertising revenue from suppliers is still the No 1 profit driver for the retailer. While many retailers talk about shoppers being their most valuable asset, many treat them as a necessary evil to be made reasonably satisfied when they frequent the store.

In the words of Herb Sorenson, “Why are retailers not paying more attention to the shopper? They are not paid to! One trillion dollars are paid to supermarkets (from suppliers) to manage their stores in a certain way.”

This is a business model that has been cultivated, refined and profitable for over 100 years, so it’s easy to see that it’s hard for the retailer to change.

Focus entirely on your No 1 asset

But the truth is that it is the shopper that empties the shelves, no matter if the shelves are physical or digital. And here is the big surprise, to the suppliers you are just a channel – as good as any other channel. This is something retailers are acutely aware of in the last 10 years with the rise of new channels such as Amazon.

So, what to do? Every retailer needs to put the shopper in the center of everything they do, if they are to survive. That means changing the way the retailer sees its shoppers, their No 1 current and future asset.

If you want to increase sales, there are essentially 3 ways to do it:

  1. Make existing customers buy more – increase basket size
  2. Make existing customers frequent your store more often – increase loyalty
  3. Increase number of customer – attract new shoppers

Looking at this list, all 3 are in the hands of the shopper. We are avid promotors of customer experience and loyalty, it is one of the best ways to be a profitable and successful business. But even if you are a star at customer experience and loyalty, you also need to attract new shoppers. This blog post focus on the last lever – attracting new shoppers.

Attract more Shoppers

For a business to survive, they must continually build and increase traffic to the point of sale at least enough to match natural attrition.

Simple in theory, but with the rapidly shrinking brick and mortar market, easier said than done. This is about leveraging all that you already have:

  • Sales data
  • Behavioral data
  • Shopper insights

and combining them in a meaningful way. One such application area is shopper choice, i.e. why the shopper chose one store over another, and how that influence your business.

Location, location, location, right? It is immensely important. There is no arguing that the location is one of the deciding factors for a Brick and Mortar success or failure, but is that the whole story?

Yes, it is important to find the optimal store locations for a target group, housing, travel patterns, traffic, parking, competitors etc. But when the store is established, location analytics are irrelevant, right? I mean, why does it matter in the short term?

Location = only 1 of 4 drivers

If location is everything, how can a new IKEA store suddenly redefine what is prime commercial real estate in a market? The answer is quite simple. Shoppers like the IKEA experience and travel quite extensively to get to an IKEA store, and this is true for many different brands and stores. How is it that some customers are willing to go the extra mile to a store that is less convenient, and how can your stores become that “detour magnet”.

Models have long been used to model geography, sociodemographic data, travel patterns and competition using complex algorithms to understand how to place and position stores. But are they giving you the full picture?

For the shopper, only 4 major drivers exist for choosing which store to visit:

  1. Value/Price
  2. Convenience
  3. Experience
  4. Assortment

Examining this list, it is clear that location is not everything, just one of four decision criteria. In fact, convenience in form of a great location, can sometimes cost substantially more than the actual gains. It is therefore imperative for the retailer to understand how and why these choices are made.

Introducing “Detour” – learn from the shopper and grow your business

What is convenient? Well, it’s all in the mind of the shopper. What might be convenient for one shopper might not be for another.

Nepa has developed a Detour concept that leverages existing data flows in the shopper centric concept of subjective convenience, i.e. let the shopper define what is convenient and learn from that.

We use sophisticated data models based on purchase behavior, geolocation data, competitor sets and add the layer of shopper subjectivity to understand how the shoppers’ definition of convenience impacts each unique store.

Nepa Detour determines what drives the shopper to take the long way and how that can be nurtured, developed and expanded to grow your business.

4 cornerstones to drive sales growth

Detour is built on Nepa’s Consumer Science platform™. The platform brings to bear the true potential of data science to unleash consumer research’s full power. The detour application merges multiple data sources with shopper insights to deliver bottom-line results.

The Detour solution is a business development tool tailored to drive growth to your point of sales. The Detour application will provide you with powerful analytics and will help you understand the competitive landscape both in perceptions and sales. This understanding will provide you with insights into which specific departments you should focus on, either to improve or to communicate, to leverage your competitive strengths.

The four cornerstones of the Nepa Detour solution:

  1. Think local. Each store has a unique set of local factors influencing shopper store choice.
  2. Use multidimensional data. Use behavioral, geographical and sales data to understand behavioral patterns and how they influence each of your stores.
  3. Inside the shoppers’ mind. No amount of behavioral data can alone bring understanding of the choice process of the shopper, you need him or her for that, and you know what – it is different for different shoppers!
  4. Be inspired by data. The local store manager is best positioned to use the knowledge from the Detour application optimally. So, we developed Detour deliverables with him or her in mind – to inspire them in ways that promote action.

Nepa Detour analytics – download our product sheet

Want to know more? Download our product sheet or contact me or your Nepa account manager to discuss how to get more shoppers to take a “Detour” to your stores.

By the way, the reason for my own personal “detouring” that I mentioned in the beginning of this post is:

  1. Even though Publix has a great assortment, their prices are just too high compared to the value that I feel they provide. Especially in the Dairy category.
  2. If the customer experience would have been great at Publix, my Detours would likely be fewer.
  3. Publix doesn’t provide me with incentives to be a loyal customer. I know they have some sort of rewards program, but none has ever been offered or explained to me. That means Publix doesn’t have a clue that I am removing more and more of my business from their stores. This might be the greatest threat to their existence, not knowing what might hit them!

Erik Enecker
Chief Product Officer at Nepa USA & COO Global Product at Nepa

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Data Everywhere – Insights Not Found

November 01, 2017

Sam Richardson

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Why should we be looking at insights to inform our decisions? The simple answer, money.

It’s that time of year again and I’m receiving campaign mailers for local elections for two towns. I don’t live in either one. While I’m honored that they think my “vote is important”, I can’t vote in either election. An easy check against public records would save each of these campaigns more than $1,000 – where budgets are often not much larger than that.

Instead, over the last couple weeks, I’ve accumulated over 50 campaign mailers – even at a low end cost of $2 each, that could reach – in my neighborhood of 400 homes (none of which can vote in either election, but are receiving these mailers) – a cost of $40,000, none of which will have any positive influence in the outcome. Matching against a list that costs about $50 would have saved these campaigns precious funds that could have been better used for their targeted audience.

Are you working to improve the right KPI?

Think about the amount of time, effort and money spent at your company looking to improve customer experience. Often these budgets can reach into seven digits, not including the man power spent on the efforts – but:

  • Are you reaching the wrong people?
  • Are you working to improve the wrong KPI?
  • Do you spend all your time fixing individual complaints coming from your data, but not driving strategy from insights?

Shine a fact-light on data

Our businesses succeed when we have revenue and make a profit. While we can look at other measures that help drive our business towards that success, our efforts in improving them should not take away from the goals of the business. We gather transaction data, basket data, customer information and loyalty data – but all too often they aren’t brought together and understood – and therefore you can´t reveal decision-worthy insights.

Do you have examples where companies gather data, but they are not using insights – and not utilizing the opportunities of generating financial outcomes?

Comment and let me know about your stories. You can also download our CX IQ eBook to learn more about using data to gain insights.

Ken Peterson
Managing Director of Nepa USA

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Customers decide what lives or dies – building towards customer-centric growth

January 19, 2017

Sam Richardson

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Towards customer-centric growth

in a drive to achieve goals, organizations tend to lose sight of who their customers are. They start to see them as “things” that need to be optimized for different purposes. To turn your business into a customer-centric and profit-driving mode, you have to bring your customers to the center of your business and make them feel your honest intentions.

What´s your centricity?

Turning your business into full customer-centric mode, you have to walk the walk. Can you recognize yourself in any of these crucial don’ts?

  • Staying fully sales-focused in fear of losing business deals hence making it hard to deliver necessary customer-oriented experiences. You just want to sell and deliver your short term reports.
  • Insisting on a strict marketing focus. You will most likely end up being more or less brand- or product-centric; not customer-centric.
  • Consumers are fed up with corporate, ungraspable messages, and advertising. They want to find what they need fast and without hassle. That is in relation to the navigation of your website, the interactions with a shop/contact center, and more.

If you recognize yourself in any of these crucial don’ts, then maybe you should reconsider your strategy. Becoming a more customer-centric business will result with better alternative results.

Becoming customer-centric makes commercial sense

Consequently, without changing your own mindset or treating customer centricity as a business strategy, you will most likely fail. Becoming customer-centric is not a temporary campaign. When handled correctly, it can become your continuously growing and positively differentiating money machine.

According to the bestselling author and consultant, Peter Fisk in his book Customer Genius: Becoming a Customer Centric Business (great book by the way), you have some heavy stats to lean on in your decision:

  • 98 % of dissatisfied customers never complain, they just leave you.
  • 65 % of lost customers are due to negative experiences.
  • 75 % of the negative experiences are not related to your products.
  • The biggest reason people leave is because they don’t feel appreciated.

Your business objective should be to provide great experiences for your customers at the:

  • point of sales
  • point of service (after an actual sale)
  • different points of innovation and development in your organization

From doing this, you will benefit a lot from incorporating the voice and footprints of your customers in early stages of innovation and development. You will drive profit and gain competitive advantages that your business most certainly haven’t touched before.

Who is the right customer for your business?

Who are your most valuable customers? How do you make sure they stay happy? When you have found the recipe of success, you want to copy that recipe and apply it to more customers and prospects.

It’s your customers who decides in what way your organization should be organized to “please” them. After all, they are the source of your profits and the ones who dictate what lives or dies – eventually. In organizations with outstanding business success, corporate strategies ARE customer-centric strategies.

6 steps on the way to customer-centric growth

Let’s stop talking about fluffy business opportunities and let’s start talking about a customer-centric approach that will get your business going:

  1. You must access more data than what is generated from the static survey reports and the “experienced” gut feelings you might trust today.
  2. Start gathering customer data from multiple channels from both feedback and actual behavior – the footprints of your customers.
  3. Gather and analyze the data continuously – more or less on a daily basis; as today’s consumers tend to change their behavior very often and unexpectedly.
  4. Combine the data and analyze it deeply to better understand and categorize the needs and actions of your customers. Ask your research/insights supplier about their data science skills as well as how they solve this “issue”.
  5. Distribute the customer insights throughout your organization and provide your different stakeholders with the next best actions. This should be accompanied by the financial value that comes with the action being performed and that is related to your own KPI´s.
  6. Automate the entire process and begin to harvest the fruits of your investment.

Overall, I have only scratched the surface. To become a true customer-centric business, there is of course a number of tricky tech issues, complex analysis, specific understanding of your industry and more to consider. That’s actually our area of expertise at Nepa. So, why not get in touch with us at Nepa and we promise to get you started.

Ola Bergfeldt
Head of Global Communications