Co.Design

How Companies Like Amazon Use Big Data To Make You Love Them

Businesses now sit on data goldmines, but very few leverage the data to improve customer service. Ziba’s Sean Madden suggests 3 ways forward.

Last month, I talked to Amazon customer service about my malfunctioning Kindle, and it was great. Thirty seconds after putting in a service request on Amazon’s website, my phone rang, and the woman on the other end—let’s call her Barbara—greeted me by name and said, "I understand that you have a problem with your Kindle." We resolved my problem in under two minutes, we got to skip the part where I carefully spell out my last name and address, and she didn’t try to upsell me on anything. After nearly a decade of ordering stuff from Amazon, I never loved the company as much as I did at that moment.

Remember, this was a customer-service call, so I was fully prepared for it to suck. Like most American consumers, my experience with service interactions is largely negative, whether it’s on the phone, in the murky depths of a commerce site, or in the aisles of an electronics store. I’m accustomed to the company being in control, and for our communication to be cold, scripted, and inhumane. Barbara’s congenial but no-nonsense approach was part of what made this experience different, but more important, she had access to exactly the right data about me, and that made the favorable exchange possible. The fact is, Amazon has been collecting my information for years—not just addresses and payment information but the identity of everything I’ve ever bought or even looked at. And while dozens of other companies do that, too, Amazon’s doing something remarkable with theirs. They’re using that data to build our relationship.

The Most Useful Data Set in the World

Big Data has gotten a lot of attention over the past 18 months as retail, manufacturing, and technology companies realize the gold mines they’re sitting on and rush to scour them for competitive advantage. Nearly all of this discussion, though, revolves around consumer trends, marketing guidance, new product planning, and other market-level insights. When McKinsey wrote its omnibus report on Big Data last year, the consulting company identified five different ways it can be used to create value, but only one of those methods mentions customers at all, and then only in terms of improved segmentation. The Wall Street Journal outlines several business success stories in its Big Data blog series, but it focuses almost entirely on smarter market visualization, better process maps, and other efficiency enhancers. Efficiency is a worthwhile goal, but from a customer’s perspective, data has far more power at the personal level.

Perhaps the only business and marketing topic that’s been talked about more than Big Data recently is the evolution of brand relationships into two-way conversations. Now that consumers have seen what social media and mass customization are capable of, they increasingly expect this kind of personalization in their communication with favored brands, not just a passive role absorbing marketing messages. Combine this insight with the rise of Big Data, and you have a clear mandate: In order for interactions to feel individualized and human, they must be well informed. That makes data about the customer you’re talking to right now the most useful data of all.

Technically, this is hard to do. Amazon has grown large while staying fairly consistent as an organization, but most big companies got big through acquisition, and that makes synchronizing data a massive chore. Getting targeted information in front of the person who’s dealing with an individual customer, or designing for one, is still a low priority. Customer service in its various forms is still treated as an expense to be minimized, not an opportunity to be developed.

Service designers know that the opposite is true. When a customer calls the support number, sends an email, or talks to a store employee, he is initiating a conversation. You have his undivided attention, even if he’s annoyed, and that makes it a crucial brand-defining moment. He’s hoping for a conversation, but bracing for an ordeal. He knows you’ve collected information on him for your own purposes and wondering why you don’t do something useful with it. Not useful to you—useful to him.

Synchronized data is worth the expense because it’s a hallmark of human interactions. If I talk to a friend and they keep asking me for information I know they already have, I have a right to get irritated. In the age of Big Data, I hold brands to the same standards. The few that meet those standards earn my trust and loyalty. But if you’re hoping to use personal data successfully, there are a few things you have to get right.

1. Give your employees the right tools.

I have no idea what Barbara was looking at on her screen when she called me up, but it gave her the information she needed about me in a matter of seconds. Someone designed the tool that delivered it and made sure she had access to it. Despite your internal divisions, I as a customer have only one relationship with your brand, and it has to be seamless. That’s what makes information tools so vital. They transfer data that’s been collected automatically or through form-filling into the personal realm, allowing us to get the awkward, impersonal, corporate conversation out of the way, and make way for the human one. The rise of portable platforms makes this possible for designers and store employees, too, not just the headset-wearing call-center folks.

2. Let the customer know you know. Then listen.

When I meet an old acquaintance at a party, she remembers my name and asks one or two questions about things we discussed last time we spoke. The fact that she remembers establishes rapport; the fact that she doesn’t list out every bit of information she possesses makes me feel comfortable. Without even thinking about it, humans are very good at conveying just the right amount of information in personal conversation.

Companies need to do the same. When I spoke with Barbara at Amazon, she had access to plenty of data, but only referenced what was necessary, starting with my name and the problem I was trying to solve. It quickly disarmed my self-defense instinct and made me comfortable referencing facts we knew in common but hadn’t explicitly stated. "Can you send it to the Northeast Ninth Avenue address?" I asked when we got to shipping options, even though I hadn’t asked if she had it on file. "Sure," she said, and I smiled.

3. Give the customer a sense of control.

Many of us have read the story of Target’s uncanny ability to recognize a customer’s pregnancy based on her purchasing habits. At first frightening, this revelation sounds reasonable on further review, but no less creepy. Target quickly learned to get nuanced about using this insight. To avoid upsetting these customers (and their parents), they now send them flyers customized to include just a few coupons for prenatal necessities, mixed in with a random assortment of others.

That’s a partial solution at best. In the future, smart retailers will be more transparent about their data-gathering efforts and use the results more appropriately. They’ll give customers more options for controlling how much they share and how that information gets applied. Regardless of who gathered it, customers still see it as their data. They expect to be treated like the owners.

The power of being known

There’s a quiet race going on right now among brands to form customer relationships that earn loyalty in the face of increasing competition, and personal data is the surest way there. Brands like Zappos, Netflix, and Amazon are already showing the power of such an approach. Not only does smart data use empower you to treat customers as individuals, it does so without invoking many of the fixed expenses associated with improved service. Good data support doesn’t require a vastly expanded workforce, or even a new type of employee—these are conversations that people already know how to have.

But imagine the benefits if you get it right. An auto mechanic who’s smart about data could tell you that your fan belt is due for a change in 2,500 miles and suggest doing it today to save future labor costs. An airline that knows more than just your frequent flier number could propose a seat based on your past selections, offer discounted upgrades tailored to your preferences, and let flight attendants know you prefer tomato juice to orange juice in the morning—even if you’re just flying coach. If they’re really paying attention, they could even learn whether or not to offer you an upsell, and in which categories to do it.

As long as they’re given transparency and control, consumers are becoming quite comfortable with these kinds of interactions. In the future, they’ll expect them. When that happens, the question won’t be "How much do you know about me?" but "What are you going to do with what you’ve found?"

[Images: almagami and Everett Collection via Shutterstock]

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