Filling the Olympic void… but watch out for the ‘Hotel Rwanda’ effect! How LOVEFiLM has harnessed the power of Big Data to keep the customer satisfied
Now that the Olympic and Paralympic extravaganza has drawn to a close we’re all desperately searching for something to fill the void. Fortunately for me, my broadband provider has recently given me a free one year subscription to LOVEFiLM, in return for upgrading with them. I have plenty of films to catch up on; as I have been to the cinema just once or twice in the last few years (babysitting more than doubles the cost)! But which films should I choose and how should I get the best value from the service?
Russell Morris, LOVEFiLM’s Commercial Director, is a member of the Ipsos Loyalty Council (a networking group for customer management experts from many of the UK’s leading companies). In a recent conversation with him, we have learnt how LOVEFiLM is harnessing the power of ‘Big Data’ to turn a potential driver of churn – the ‘Hotel Rwanda effect’ – into a positive customer experience.
If you haven’t seen it, Hotel Rwanda is a film about the 1994 Rwandan Genocide of an estimated 800,000 people. It’s a film that many of LOVEFiLM’s customers put on their ‘must see’ wish list. The day arrives and it’s delivered to your door, ready for you to sit down and watch; either at the end of a day at work, or relaxing at the weekend. The ‘Hotel Rwanda effect’ kicks in: you know it’s a great film and you really want to watch it… but not now, not after a long day, not when you want to switch off. So the DVD box sits on the side unopened and after 3 weeks it’s still there, reminding you that you’re not getting the value that you thought you’d get from the service.
LOVEFiLM knows the titles that can cause the Hotel Rwanda effect so they’re on the ‘watch out’ and they have optimised the timing and messaging to turn this situation into a driver of future customer loyalty. LOVEFiLM triggers a campaign when a customer has held onto a disc for three times their average length of time and proactively sends another disc from the customer’s wish list that is known to drive quick turnaround – perhaps a rom-com that they are more likely to watch at the end of a long day.
Giving customers a solution in exactly their hour of need drives future loyalty. The opportunity available to data literate businesses is to determine how ‘organic’ data taken from across the customer base can be used to identify these key moments of need and then optimise the timing of the business action based on the individual customer in need.
‘LOVEFiLM has many loyalty-driven campaigns honed through analysis of the one million customers signing up to its service each year. By setting up automatic triggers which fire when each single customer displays lower levels of engagement, LOVEFiLM is able to recover this engagement and benefit from this customer’s positive experience being communicated to others.’
Russell Morris, Commercial Director, LOVEFiLM
One caveat to this is that organisations need to be careful about how they use big data and communicate this to customers. In similar conversations with other Ipsos Loyalty Council members we heard how some communication has resulted in customer cynicism or mistrust. Showing there’s a fine line between personalisation or useful targeting and what customers see as ‘big brother tactics’. Sometimes Big Data can have BIG unexpected consequences; recall the American father who discovered his teenage daughter was pregnant because she started receiving offers in the post for baby clothes based on her purchasing unscented body lotions and vitamins from their local Target supermarket! Following this, Target starting mixing coupons for baby clothes amongst other unrelated items to make it appear less like they are ‘spying’ on their customers.
We also heard in our conversations with customer management experts how in many cases customer data collected by organisations (for example loyalty card data) can only tell you so much – the ‘what’ – but if you want to truly understand the ‘why’ you need to uncover the context and customers’ underlying motivations. Not everything can be explained and modelled by past behaviour and associations – and most of the Ipsos Loyalty Council members we spoke to expressed a need to combine ‘Big Data’ with customer survey data and, crucially, interpretation! So I’d suggest the next big thing in customer measurement and management is not ‘Big Data’ per se but intelligently integrating insight from Big Data sources with primary research to solve business issues.
To learn more about the Ipsos Loyalty Council and Big Data click here
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