ARF Interview: John LaRocca, Vice President, Strategic Partnerships, dunnhumbyUSA

Settopbox data loyalty card data cookie data and more have created vast databases of customer data While this gives marketers great opportunities to reach receptive customers making sense of big data can be a challenge We caught up with John LaRocca Vice president Strategic Partnerships at dunnhumbyUSA to get his expert opinion on making business sense of massive data sets ARF What are the most exciting new data sources you39ve been able to use in the last decadeJohn LaRocca As someone who has spent a career analyzing and gleaning insights from syndicated panel and pointofsale databases and shopper loyalty card data today is a tremendous opportunity to better understand customers in ways we never thought possible Although much of the data is anonymous this type of data allows us to understand the behavior and motivations of a larger universe of customers It gives us the resources to personalize an experience and deliver value through relevance in areas like assortment pricing and promotions for example It gives us the tools identify customer growth and attrition and empowers brands and retailers to develop better relationships with their best customersThere is an effort today to associate these databases with customer data from other sources to develop a better understanding of the customer on the path to purchase These efforts are revolutionizing the advertising industry for example where ROI and effectiveness has traditionally been difficult to measure and targeting has largely been based on panelbased demographics At dunnhyumbyUSA I am responsible for building collaborative partnerships with other data and solutions providers to create new solutions and enable our clients to deliver more value to customers in impactful ways We have a collaborative agreement with comScore to measure the effectiveness of online advertising pairing online and instore behavior We have a similar agreement with TRA which measures the television viewing habits of two million settop box households to develop a similar understanding of the effectiveness of television advertising planning that is also based on actual purchasesIntegrating a customerdriven approach across channels connecting instore with online for example begins to shed light on a shopper39s decision process throughout the path to purchase And I think we are only beginning to understand its potentialARF What have we learned about customers from big dataJL We have certainly learned a lot of new things about the customer but the data and resulting insights have also confirmed quantified and expanded some existing beliefsamp183 Each customer is unique and therefore brands need to treat them as such including adopting a personalized approach in how they communicate with them rather than at themamp183 Customers behave differently in different categories A quotprice sensitivequot customer is not equally price sensitive in every category A quotdiscriminatingquot customer is not consistently discriminating across the storeamp183 People don39t behave as they claim and that actual behavior is a better starting point for understanding WHY customers do what they do than merely asking them And when you link actual behavior with attitudes you create insights that are game changingamp183 Demographics psychographics and attitudinal data are poor tools for targeting and interpreting customer preferences because they drive generalizations reinforce the myth of the quotaveragequot shopper and do not correlate with behavioramp183 Focusing on customer acquisition can be an expensive choice At dunnhumby we39ve found that it takes between 12 to 20 new customers to make up for the loss of just one committed customer I think we will find out that this number increases dramatically as we gain a greater understanding of social networksARF What are some of the nagging problems you don39t think we can address because they39re too timeconsuming costly or require too much processing power Do you see the industry ever solving these problemsJL Many of the challenges companies face are due to both the quantity and complexity of the data available Most companies collect data but struggle to understand how to use the data they collect effectively to drive business results and leverage datadriven insights throughout their organizations Data itself is in danger of becoming a commodity Any company can collect data but the real value comes from leveraging that data to create even more valuable data eg segments dimensions develop the right insights and discover the quotcustomer DNAquotAs databases continue to grow realtime reporting is a challenge There are more data dimensions to measure across multiple products geographies time periods and customer segments For example online shopping has created this long tail of UPCs because there is no limit to the number that can be quotshelvedquot in the digital store Thus the number of items in the report has grown significantly and will continue to do soIt isn39t only the explosion of raw data but the complexity it drives in the data cube that creates the reporting challenge There are more disparate sources of customer behavioral data from loyalty cards searchbrowsing social mobile and settopbox data among others amp8211 each with aggregation and manipulation challenges that have created opportunities to generate an increasing number of behaviorbased customer segments to report analyze and model This complexity creates an issue with the timeliness of insights People have become accustomed to simplified instantaneous results and so when they have to wait an hour to two or overnight it creates a lot of frustrationTo put it simply we have the database management and business intelligence tools to find the needle in the haystack but the haystack is now bigger I don39t believe that these issues are too great to solve The industry typically finds a creative way to solve its problemsJohn LaRocca is Vice President Strategic Partnerships at dunnhumbyUSA responsible for developing the company39s partnership strategy within media and analytics identifying and leveraging collaborative partnerships with companies that have complementary data assets and capabilities in order to develop innovative customerdriven solutions for dunnhumby clients He plays a critical role in enhancing dunnhumby39s media measurement solutions and works to expand the company39s capabilities in this areaWant to hear more John LaRocca will be discussing big data with a panel of experts at the ARF Industry Leader Forum on October 27 Registration is open

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ARF Interview: John LaRocca, Vice President, Strategic Partnerships, dunnhumbyUSA

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