American automakers trust dealerships to make drivers happy whenever they think about their cars. Bad customer experiences can lock up the brakes in a competitive market, with household brands breaking down overnight as irate customers voice their displeasure on social networks.
The customer is in the driver’s seat these days.
But automakers have newly discovered digital fuel – i.e. customer data – that helps them gain insight into customers’ feelings about certain dealerships. An automaker can cross-reference its customer database with data products from mail and shipping services giant Pitney Bowes to learn, for instance, that customers aren’t buying cars from a dealership near their homes. Or maybe customers are taking their cars to a dealership for service other than the one they bought from.
“These can be really interesting metrics” that shed light on the customer experience with certain dealerships, says Dan Adams, vice president of data product management at Pitney Bowes. “Conversations with our B2B clients about the business problems they’re trying to solve have been one of the major drivers for Pitney Bowes building out a portfolio of data products.”
Automakers, of course, aren’t the only ones driving data as the new digital currency. Insurance and financial services compete on their ability to analyze and process information. Digital marketers in virtually every industry now make decisions based on customer data, not marketing intuition. All tallied, Ovum predicts the big data market to grow from $1.7 billion last year to a whopping $9.4 billion by 2020.
“A company’s ability to turn data into decision-making information has become a requisite area for competing,” Adams says.
The idea of location-based data products seemed a natural fit for Pitney Bowes, and so the company made a series of data-related acquisitions. In 2004, the company bought Group 1 Software to convert postal addresses into latitude and longitude. The acquisition of MapInfo three years later gave Pitney Bowes the ability to conduct spatial analysis of addresses to learn about trade territories and other demographics.
Today, Pitney Bowes accesses billions of unique and proprietary data points and has some 400 different data products for standardizing, de-duping, cleansing, enriching, and analyzing customer information.
As the data market gains momentum, Pitney Bowes has begun courting channel partners to grow its data products business. Pitney Bowes, which traditionally sells directly to customers, launched a partner program less than 18 months ago.
The thinking goes, data products help line-of-business executives make informed decisions about some of their biggest challenges. But Pitney Bowes lacked intimate knowledge of businesses, industries, and competitive challenges. System integrators, on the other hand, already have deep relationships with companies and understand them well. They could guide Pitney Bowes in offering the right data product to match the business need.
Pitney Bowes sought channel partners on the “progressive side of the spectrum,” says Adams. At its annual sales meeting in January, 97 channel partners sat side-by-side Pitney Bowes’ internal salespeople to learn about data products. Channel partners include Pegasus Knowledge Solutions and Ironside Group.
“We see great potential to drive machine learning and AI [artificial intelligence] capabilities leveraging the detailed industry data sets from Pitney Bowes,” says CEO Timothy Kreytak at Ironside Group. “Our data science practice is built on helping clients to organize, enrich, report and predict outcomes with data.”
While data science, AI and machine learning may seem complex, Pitney Bowes’ data products promise to solve simple-yet-critical business problems. For instance, Pitney Bowes can aggregate usage data from installed mail metering machines to help a small business find potential lookalike customers to target.
In fact, managed service providers and value-added resellers serving the small business sector can help businesses get into the data game.
That’s not to say Pitney Bowes itself has a clear path; the fast-moving data market presents lots of challenges. Chief among them are privacy, security, and regulations. Adams admits customers raise eyebrows when they hear that their mail metering machine may be sending usage data back to Pitney Bowes. Is there a mechanical spy in the office?
“Another challenge is keeping pace with regulations – what companies need to do to protect personally identifiable information,” Adams says. “When talking to clients, we’re hoping to provide an authoritative voice around best practices for data governance, data usage, and with [channel] partners for data security.”
It’s important to get this right. If customers feel Pitney Bowes is using their data irresponsibly, they’ll find another data company to help them. These days companies switch out cloud software components on the fly if they’re not happy with the experience.
“There’s a power shift toward the customer,” Adams said. “Our ability to keep clients happy is coming down to data quality, data freshness, data accessibility.”
Based in Silicon Valley, Tom Kaneshige writes the Zero One blog covering digital transformation, AI, marketing tech and the Internet of Things for line-of-business executives. He is eager to hear how data as the new digital currency is impacting your business. You can reach him at [email protected]