The Data-Driven Way to Win Customers’ Hearts

It’s Customer Contact Week and hundreds of people who are responsible for delivering better customer experiences are gathered this morning at the Renaissance Hotel in Austin. Neil Hoyne, chief strategist at Google, Wharton fellow, and author of Converted: The Data-Driven Way to Win Customers’ Hearts is this morning’s keynote speaker.

“I get people to click on pictures,” he humorously and humbly says from the main stage. He adds, “I also build AI tools to drive value from data.”

Hoyne is an animated speaker and he knows his material well. There’s a teleprompter if he needs it but he rarely glances at it. “I come from the marketing side,” he says. In his role at Google, he spends countless hours (actually, he counted and it’s more than 9200 hours) in meetings with boards and other stakeholders to help them discover how to use their data and make better business decisions.

To secure high-quality data in the first place, Hoyne advocates for the building of a test-driven culture. The company needs to experiment with its products, services, and customer context. “You have to innovate to push the business forward,” he says. “Make experimentation your superpower.”

Practically speaking, he suggests the use of the following framework.

1. What is the hypothesis? What should we do differently?
2. What data supports it?
3. How would we test it?
4. If it was true, what would we do?

“Only 5 out of 100 companies use data to make decisions,” he says. “The goal is to get to six. Do what you can. Keep the faith. Pursue one more opportunity. Test one more hypothesis.” To illustrate some of the built-in resistance to testing, Hoyne shares a funny story about how many organizations are open to testing as long as they’re certain of the results.

Why the need for so much testing and strategic rigor? Hoyne says, “You’re looking for the moment that changes behavior.” He adds, “The biggest opportunity in AI is to help predict customer behavior. AI can be used to predict Customer Lifetime Value (CLV). When we can predict what people will spend, it all of a sudden looks like cash flow, like an investment to the CFO.”

Given how hard it is for most CMOs to defend their budgets, moving from a cost center to an investment with a predictable return represents a big step forward for savvy marketers. And his message—that we can use data to discern the behavioral characteristics of our best and worst customers and adjust our spending and tactics accordingly—isn’t just for CMOs, it’s for anyone who runs a business.

I spoke with Hoyne after his speech and he told me it’s more of an organizational skill than a technical skill of an employee to run experiments. He also made it clear that these are his thoughts and not Google IP.

Given his role at Google, I asked him to define strategy. He said, “I need to understand how the company is going to create value and who they’re creating value for. And I need to know the reason to believe that they can create that value.” He added, “The challenging part is creating the conditions by which executives and companies can be open with themselves (and admit) that they haven’t developed a strategy.”

Hoyne’s book, Converted, which I just read and highly recommend, explores these themes in greater detail. The book’s substance and style are at once approachable, pithy, at times poignant. On page 108, it says “Behavioral attributes have much more value than demographics.” That’s a shift in thinking for some, but it’s easy to see how behavioral attributes help to paint a richer picture of customers.

Not all clicks, sales, or customers are equal in value. By understanding who is who and what is what, companies can have better conversations with customers, the kind of conversations that create better experiences for customers and in time develop into better relationships with greater CLV.

One additional hopeful note for all the writers and storytellers in the audience. Hoyne specifically makes the call for more and better storytellers. He did it from the stage and he highlights it in his book.

I greatly appreciate that he recognizes the need for story. It makes sense. To get the most value from the science of data it takes the art of persuasion. Data has been called the new gold, and data is this valuable, but only when there’s a rigorous means of gathering and analyzing it, and even then it doesn’t always mean much to decision makers in the room, not until the conclusions drawn from the data tell a pertinent business story in human terms, a story that everyone in the organization can easily understand and readily act upon.