Tag Archives: data

Why do social media “experts” talk such guff?

Why do so many social media “experts” talk such guff?  A couple of weeks ago I was at a conference, where the focus was very much on data and how it could be used to help Telcos prevent their customers paying late (or not paying at all) and/or once in debt, collect the most overdue money, most quickly, at the lowest cost – all the time doing their best to treat their customers fairly.  Clearly a challenging combination.

An interesting inclusion in the programme was a chap who came from a social media consultancy.  He was asked to talk about how social media could help businesses understand their customers well enough to prevent them from falling behind with their payments, and, in the event that they fell into debt, whether social media data could be used to identify their ability and intent to pay.

I had hoped this presentation would be fascinating and full of insight.  To be fair to the guy, his social media generic overview was fine. But when it came down to the nitty-gritty of whether or not, and if so, how social media data could be used in a payment behaviour or collections environment, he frankly floundered, and failed to answer even one of the three questions he had been tasked with.

At the end of his presentation I walked downstairs with a fellow delegate.  I didn’t know him, but I asked him what he thought.  His answer was a single word:  “Irrelevant”.

And that’s the problem.  That one poorly targeted, ill-thought out presentation convinced a large group of Telco delegates that social media has no part to play in their business.  And my view is that this is simply not true.  Whether or not it’s possible, legal or even advisable to use social media data in a collections environment, and whether or not there is anything more than marginal benefit to be gained from doing so,  there are certainly opportunities to build  two-way, engaging relationships with your customers, and obtain useful data from them in the process.

If nothing else, that approach gives you an opportunity to encourage your customer to feel positive about you and your brand, making it more likely that your bill will be higher in their hierarchy of “must-pays”.  Especially in the case of mobile networks and phone providers, where it is highly likely much of their social media interaction will be conducted through mobiles.  And these things can be measured – simply compare the payment and spending behaviour of those of your customers who engage with you on, say, Facebook to those who do not.

Use the social media platform to gain information from them, obviously ensuring that your collection and use of such data is compliant.  Make it fun for them to tell you which networks or mobiles they’ve previously used, do some research on how they would rank them, how they use their phones, proportion of personal to business, gain further information on how the phone is used in business – the answers may not be entirely honest, but, with caution, you can use that data to identify likely switchers and even, in some circumstances, likely payment or contract defaulters.  It is worth noting, however, that the time to build the relationship is BEFORE the payments start to be missed – in other words from the moment the application is approved.

What is crucial, and, I think, not understood, is that social media data, communication and engagement are not ends in themselves. They are simply part of an ongoing communication programme with a brand’s customers and prospects.

It is for each individual company or brand to adopt a strategic approach which identifies its business goals, and develops – and measures – the combination of communication channels appropriate to achieve those goals – which could be telephone, social media platforms and forums, email, websites, mail, blogs, updates (digital and print) on news/technical developments/new product, downloads, apps, face to face and so on.

But I think a core difficulty for many businesses is in identifying so-called social media “experts” who look at the subject strategically.  I’ve met both types of animal.  The ones who do really are very good indeed – the bad ones do an alarming amount of damage and harm – both to the perception of social media and, in the worst cases, to the customer’s brand and image.  To identify the good ones, make sure you talk strategically to them, ask them pertinent questions – if they don’t understand your business, your issues, or can’t answer you, or sidestep, or generalise … find someone else!

We’ll welcome your thoughts or comments on this post – and if you need any help with your communications strategy and/or activity – across channels or through specific channels – please don’t hesitate to give me a call.  If I can help, I’ll be happy to.  If not, I can at least point you to someone who will provide sensible strategic advice.

Victoria Tuffill
Partner, Tuffill Verner Associates
 
Tel:         +44 (0)7967 148398  /  +44 (0)1787 277742  
Email:     victoria@tuffillverner.co.uk
Web:       http://www.tuffillverner.co.uk

Victoria Tuffill is a direct marketing consultant with over 30 years experience. She founded Tuffill Verner Associates consultancy with Alastair Tuffill in 1996. She is also founder and Director of Fraudscreen – a data tool that assists in the prevention of 1st party fraud. Her experience ranges across businesses including publishing, home shopping, insurance, utilities, telcos and collections.

© Victoria Tuffill and Tuffill Verner Associates, September 2012. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Victoria Tuffill and Tuffill Verner Associates with appropriate and specific direction to the original content.

Protecting the innocent and vulnerable against First Party Fraud

Life’s not fair. And that’s a fact that we tend to learn very early on in life. But the level of unfairness generated by fraud in the UK is grotesquely unfair. The Fraud Advisory Panel states that UK Fraud is estimated to cost every adult in the country an average £765 per adult.

Against that backdrop, there is a requirement (particularly among those in the water industry, energy providers, telcos and financial services) that businesses should “treat customers fairly” – a challenging goal, given the increasing sophistication and ongoing evolution of fraud.

The many faces of fraud

Fraud has many faces – and it’s somewhere between difficult and impossible to keep up with the latest innovations from fraudsters. Fortunately technology, combined with experience, provides solutions to some of the problems. Identity verification, address and age verification, voice analysis, IP address checks, CCJ and credit checks all help in the battle against identity theft, cybercrime, password theft, credit card fraud, consumer scams and so much more. Transactional and social media all have a part to play – and can be particularly effective in the area of first party fraud.

First party fraud

So what is first party fraud? And how big a problem is it? Fraudscreen defines it as “your own customers, using their own identities, taking advantage of your inability to challenge their version of the truth, in a distance selling environment”.

And why not? It’s easy to do if you’re so inclined – just tell lies to businesses in situations where they can’t prove that you are not telling the truth.

The result? Higher costs for everyone. £765 per adult, much of which is due to first party fraud, is a huge amount of money for any individual. And it is the innocent, the vulnerable and the honest who end up paying the price for other people’s dishonesty.

Changes in culture and consumer behaviour

What’s particularly alarming is that this kind of opportunistic behaviour is continuing to grow across all demographics and throughout the UK. According to the National Fraud Authority Experian Fraud Index 2010 (April 2011), private sector fraud cost the UK economy £9.5 billion in 2010. Of this, over half was attributed to first party fraud – and when talking about automotive fraud, the percentage shot to a massive 80%!

We can make excuses about the economy, but this increase is at least in part driven by the shift in UK culture. Even in 2010, according to an ABI survey, 44% of individuals consider it acceptable to inflate the value of an insurance claim; in addition, consumers have been encouraged by the legal profession and others to claim injuries that cannot be disproved (soft tissue damage such as whiplash) – needless to say, this drives motor insurance prices ever upwards – last year saw a 39% increase!

‘Society’ has become increasingly tolerant of dishonest and opportunistic behaviour, and this acceptance has led to increases in first party fraud across home shopping, TV licensing, government-funded benefits, insurance, water and energy companies, lenders (credit cards, mortgages, banks and building societies, payday lending).

The common denominator? All these sectors offer the consumer the opportunity to receive goods, services, or money dishonestly, by exploiting weaknesses within a business’s systems and processes – particularly where there is no comeback in terms of CCJ or credit score. For example, first party fraudsters deliberately

  • Apply or place an order for goods, services, or loans with the pre-meditated intent NOT to pay
  • Tell lies on application forms
  • Claim that home shopping parcels have been returned or were never received
  • Falsify insurance claims and/or inflate the value of the claim
  • Falsely claim injuries that cannot be disproved
  • Fail to pay insurance instalments once certificate has been received

Until relatively recently, this sort of behaviour has gone largely unchallenged and has simply been attributed to bad debt, or delivery issues, or just not picked up at all.

The rule is simple. When it’s pre-meditated, it’s first party fraud.

Treating your customers fairly

The simplest solution for businesses is to tar all customers with the same brush and spread the costs among everybody. Unfortunately this means that the honest, the innocent and the vulnerable end up paying the price for the dishonest minority.

It’s hard to know that an individual “intends” to behave in a dishonest way before he has actually done so. But the good news is that, in statistical terms at least, it is possible to pull apart your customers into predictive segments of good, bad or mixed behaviour. Fraudscreen, for example, can be applied as early as prior to making an outbound marketing decision; for inbound, at point of application; even after the horse has bolted – ie when you’re at the point of collections or, worse, recoveries.

Having used conventional fraud prevention techniques to ensure you know to whom you are talking, it is then a matter of applying additional data that tells you how consumers are likely to behave. Most particularly, how they will behave in an environment where they can ‘get away with’ opportunistic behaviour – where it actually doesn’t matter what they do – because there will be no come-back in terms of credit score or litigation.

Third Party Data for First Party Fraud

There is a range of data sets that are used, individually and in combination, to prevent fraud of all types, including first party fraud.

Credit data identifies a customer’s ability to pay. CCJ and similar data is also extremely useful, but works best in combination with other data sets as it provides absolutely no information on individuals who have no CCJ against them. Geo-demographic data can also be useful as part of an overall data solution, as can transactional data like Goods Lost in Transit – a tricky area as not all GLIT is caused by bad people – it can just be that something’s genuinely gone wrong, or the person delivering is lazy or dishonest.

Consumer behaviour and attitudes

There are also data sets which can be used to understand a consumer’s behaviour and attitudes. Social data is becoming an interesting tool from a first party fraud perspective – useful insights can be carefully drawn from self-reported data on Linked In, Facebook, Twitter, Google + etc. In insurance, CUE, though it has some bugs to iron out, provides claims information which can be a useful tool to verify whether or not people are telling the truth on their application forms – especially as the consumer is now quite sophisticated in his use of aggregator sites to test which answers to which variables will provide the lowest premium. The application form has now become more about price than telling the truth.

And, of course, there’s Fraudscreen, a data solution which was designed from the outset to identify consumer groups who are likely (or not) to behave opportunistically (ie first party fraud), and provide categories of consumers who are statistically more or less likely to lie for their own gain, or steal if it’s easy, or claim money or refunds from service providers. Fraudscreen can be applied across sectors to segment customers into groups of predicted good, bad or mixed behaviour. It’s an ideal solution for helping businesses in their goal of treating customers fairly as its data provides insights into consumer attitudes towards payment and honesty. And it means that the innocent or vulnerable consumer is less likely to pay for the behaviour of the opportunistic consumer.

First party fraud isn’t going anywhere, and the issues of treating customers fairly will continue to grow. A water company recently quoted that honest consumers end up with an additional £16 on their water bill, purely to cover the costs of those who won’t pay. Rather than make everyone pay for the faults of the few, surely it would be fairer to punish the dishonest, reward the honest, be fair to the innocent, and help the vulnerable?

Fraudscreen was designed to help businesses treat consumers fairly, and succeeding in that challenge will provide businesses with a real edge over their competitors, help them gain and keep new customers, afford excellent PR opportunities and improve their profitability.

Victoria Tuffill is a direct marketing consultant with over 30 years experience. She founded Tuffill Verner Associates consultancy with Alastair Tuffill in 1996. She is also founder and Director of Fraudscreen – a data tool that assists in the prevention of 1st party fraud. Her experience ranges across businesses including publishing, home shopping, insurance, utilities, telcos and collections.

© Victoria Tuffill and Tuffill Verner Associates, April 2012. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Victoria Tuffill and Tuffill Verner Associates with appropriate and specific direction to the original content.

Big Data – a new world of consumer information

Some four years ago, I was chatting to the head of a large data company, who was complaining that he had, on average, over 80K pieces of transactional data per supermarket customer.  Taken at face value, that sounded terrific.  But his difficulty was in understanding what was significant and what was not, so that he and the client could identify and use the relevant data quickly and effectively.  As I started speaking to more businesses, I heard this theme again and again – even Debt Collection Agencies found they just had too much data and not enough time to be able to understand how to find and apply the useful key data to improve their results and ROI.

 The Three ‘V’s

Even in the few years since then, volumes of data have simply exploded – Analyst Doug Laney described it accurately as being three-dimensional – a combination of volume, velocity and variety. His terminology is now widely used.

Big Data began with consumers shopping over the internet.  Businesses started to save and analyse data from clicks, searches, registrations, purchases.  Of course, having collected the data, many companies were quite clueless about how to analyse and use it.  But those who looked further ahead, like Amazon, were able to harness its power to gain market share against their competitors.

And the situation has developed further. More recently, consumers have discovered other uses for the web and smartphones – they use social networks where they post personal and business information about themselves, they link and hold conversations with their friends, family and colleagues, they post updates and information and photographs and music and films and videos and reviews and … the sky (or should I say cloud) is the limit.  And the data they are so happy to provide is available for marketers and businesses if they’re ready to take advantage of it and can cope with its relatively unstructured nature.

Combined insight:  Big Data plus traditional data

Data has always been used extensively by consumer-facing businesses to segment and target customers.  But Big Data demands a more agile approach towards engaging customers, and providing a more personal or tailored shopping experience.  Combining Big Data with the traditional purchasing and customer data previously used by business offers a massive opportunity to gain three-dimensional insights into consumers – whether for marketing purposes, product development, or customer service and management.

Forward-looking businesses and retailers will track an individual’s behaviour, including product or offer preferences, and model – in real time – that consumer’s likely behaviour.  While the customer is shopping, the business will be able to offer appropriate upsell products, loyalty programmes and increase spend and loyalty much more effectively than any competition who fails to take advantage of the opportunity.  The retailer will know when it’s safe to offer credit and on what terms;  they’ll know what the consumer wants and will be able to choose how … or whether … to deliver those needs.

Big Data Benefits

And the benefits are not just limited to retailers.  Telcos, media companies, utilities, energy providers;  insurers and aggregator sites – Big Data allows genuine communication between provider and consumer – and the consumer is beginning to understand this, and take advantage of opportunities to “switch” providers or suppliers or retailers so that they interact with those who understand their needs and wants, and are prepared to engage with them on that basis fairly and openly.

Big Data Big Issues

As ever, Big Data has its difficulties as well as opportunities.  There are concerns about data security and data privacy.  And not least, concerns about the ability to analyse Big Data –reflected in the growing number of software firms who specialise in data management and analytics – growing at almost 10% per annum – which is roughly twice as fast as the software business as a whole.  According to McKinsey, by 2018 as many as 140,000 to 190,000 additional specialists with deep analytical skills in Big Data may be required.

And there’s a Big Data technology revolution too – Big Data will need new and different technologies to allow efficient data processing swiftly enough for the data to be deployed effectively in realtime, such as MPP (massively parallel processing) databases, the Internet, and cloud computing platforms.

So where will Big Data go from here … interesting times!  And    whether you’re a marketer, a data provider, a software business, or an insight and analytics business, those who adopt an agile, creative approach to the issue will be the overall winners.

Click here for more information on TVA’s Data services.

Victoria Tuffill is a direct marketing consultant with over 30 years experience. She founded Tuffill Verner Associates consultancy with Alastair Tuffill in 1996.  She is also founder and Director of Fraudscreen – a data tool that assists in the prevention of 1st party fraud.  Her experience ranges across businesses including publishing, home shopping, insurance, utilities, telcos and collections.

© Victoria Tuffill and Tuffill Verner Associates, April 2012. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Victoria Tuffill and Tuffill Verner Associates with appropriate and specific direction to the original content.

So what’s new about multi-channel marketing?

multi-channel imageWell, I know I’ve been in marketing for a long time. But I can’t help raising a wry smile when I hear today’s up-and-coming extol the virtues of this or that media channel, and propose it be used as a marketing tool. Occasionally (too rarely) they even suggest testing and measuring results. And the listener is left with the impression that direct marketing is all their very own invention.

There is no doubt the media opportunities have evolved beyond recognition since the direct marketing of the ‘90s. As well as traditional channels like direct mail, loose inserts, press ads, telemarketing, package inserts – all of which are, when appropriately used, an effective part of the marketing mix – we can include email, websites, e-commerce, mobile commerce, apps, social networks, blogs, e-newsletters, microsites, links, PPC etc etc.

And it’s not only the number of channels that has expanded. So has the number of vessels which deliver our communications every day. Technology’s exploded into smartphones and iphones, tablets and ipads, readers, smart TVs, pcs, laptops, Macs. Print media is also evolving – with more advertising in return for free information, QR codes to integrate with new technology, and a greater degree of personalisation within customer communications.

To cope with the diversity and range of channels, marketing platforms are evolving to help businesses integrate their marketing and make it customer-friendly.

Of course the prolific nature and ongoing evolution of marketing channels drives a correspondingly diverse number of “experts” who offer a range of “optimisations” – search engine optimisation, conversion optimisation, click-through optimisation, social media optimisation and so on.

But what I find so interesting is that, despite the new and continuously evolving channel opportunities, the basic principles of direct marketing are unchanged. It’s still a science that involves data, analysis and insight, media choices, creative and design, pricing, branding, product, offer, research, communication, delivery and customer service.

And it’s still about identifying and understanding the customer. Testing data, channels or media, offers, products, new ideas, new creative / copy, response and delivery mechanisms is still an essential part of the process.

And, vitally, it’s still about identifying and measuring the business’s key metrics ongoing to provide insight and refinement of ongoing, healthy and integrated activity.

Certainly there are significant shifts in consumer behaviour – they are more sophisticated, with a shorter attention span. They are hit by multiple messages about multiple products and services from multiple businesses via multiple devices. The lines between above- and below- the-line advertising have blurred to the point of oblivion – which does make the measurement of individual media channels a little more challenging.

But ultimately, the aim of any successful business has to be to deliver appropriate and seamless services, products and communications to its customers, while allowing the customer to deliver communications back through the channels of their choice. And the company that can achieve that is the company that will succeed, both now and in the future.

by Victoria Tuffill 30th August 2012

Victoria Tuffill is a direct marketing consultant with over 30 years experience. She founded Tuffill Verner Associates consultancy with Alastair Tuffill in 1996. She is also founder and Director of Fraudscreen – a data tool that assists in the prevention of 1st party fraud. Her experience ranges across businesses including publishing, home shopping, insurance, utilities, telcos and collections.

© Victoria Tuffill and Tuffill Verner Associates, August 2012. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Victoria Tuffill and Tuffill Verner Associates with appropriate and specific direction to the original content.