Lexer CEO and Co-Founder explains why democratising data is the key to providing better customer experiences.
What are the biggest roadblocks making customer data accessible for retailers?
- The number of point solutions: retailers are using eight or more systems (ecommerce, POS, website email, SMS, loyalty, reviews, surveys & customer service) that create separate silos of customer data, making it impossible to truly understand the relationship they have with each individual customer.
- The cost of data manipulation & advanced analytics: the information in these systems once aggregated into one place is still very raw and hard to use. The starting cost to hire your first data science resource and to tool them with a data warehouse and analytics tools is well in excess of $400k to get started.
- Operational processes to gain insights: even with a single data scientist to support the business the process for business users to write insights briefs is often slow and painful resulting in long response times and many important customer questions will go un-asked or un-answered.
How do retail teams operate differently after they onboard Lexer?
When retailers onboard Lexer, they don’t have to use so many manual processes to analyse their customers and build targeted campaigns. They also dramatically reduce their reliance on the data and analytics team because they can access their data from a single source of truth and leverage Lexer’s pre-built workflows.
It’s easier to find deep customer insights, because a single customer profile is linked with orders, NPS surveys, customer service, spend, web behaviour, email and SMS engagement, purchase habits, app usage, and loyalty programs.
This completely transforms the speed and effectiveness of marketing, sales, and customer service teams. It’s democratising insights across the business.
What questions can marketing teams start answering if they are using Lexer?
Marketers often get asked questions that seem simple on the surface, but have traditionally been very hard to answer. However, with a single source of truth, all of a sudden they can answer important questions about their customers and marketing strategies, such as:
- Who are my best customers and what do they look like?
- What is the lifetime value of customers?
- How much of my revenue comes from the top 20% of my customers?
- What are my hero products for customer acquisition?
- What is my returning customer rate and what products are they buying?
- How many of my customers are not addressable via email?
- How many of my customers are active, inactive and lapsed?
- How many months since a customer’s last order do we consider them churned?
As economic pressures grow, retail marketers are under more pressure to deliver ROI in a highly competitive market. How does Lexer help them to achieve this?
Lexer’s mission is to help brands and retailers to know their customers and grow their business. As such, there are four ways that we help them to deliver impact and ROI across their paid and owned channels.
Through business transformation, Lexer empowers all teams with access to the customer data and insights needed to improve decision-making and strategy. It also reduces the cost of doing business without impacting results. This occurs by reducing customer acquisition costs, marketing waste, and improving productivity.
When using Lexer, retailers can also increase revenue by improving customer lifetime value, acquiring high value customers, driving engagement, and reducing churn. They can also have a big impact on customer experience, by creating more personalised, relevant, and engaging interactions across all channels and teams.
Australia has had a lot of issues with cybersecurity breaches in recent months. How does Lexer keep its data safe?
Data security is Lexer’s core business.
Lexer maintains an ISO 27001 standard for our Information Security Management System and goes the next step further to become annually SOC2 certified via an independent auditor. We also regularly undergo external penetration testing to ensure we have no vulnerabilities that can be exploited.
We also have security tenets in place that cover encryption, least privilege access, automated patch management, backup and restoration, strong access controls, secure AWS data storage, OWASP10 and SANS25 web standard testing, secure code development, as well as constant monitoring, logging and alerts of system metrics and user commands.
Omnichannel strategy seems to be key for retailers this year and going forward as consumers opt to shop on and offline. How does Lexer support on and off-line shopping behaviours?
More than half of Lexer’s clients are omnichannel retailers. We consume both online data from ecommerce systems and offline data from POS systems. In the Lexer platform you can see a customer’s spend in both channels and in total.
We support a host of use cases that focus on driving engagement in each channel and across channels. A good example of this is store catchment analysis and activation. We help omnichannel retailers to identify customers that live in a store catchment but have not shopped in-store to drive store traffic or alternatively customers that live outside of a store catchment to suppress them out of the store messaging to improve relevancy of marketing.
There is a large divide between customer experience in online and offline. Digital experiences are increasingly measureable and informed by customer data. However online typically accounts for <25% of an omnichannel retailer’s revenue. At Lexer we see a big opportunity to use the data in the CDP to improve customer experience in-store where omnichannel retailers make the lion’s share of their revenue.
In early 2023 Lexer will be releasing a clienteling tool called Lexer Serve. This new product will make customer data accessible to retail sales associates via a tablet to help inform them of a customer’s history with the retailer and guide them on the optimal interaction for each individual customer.
I’ve noticed you refer to Lexer as a CDXP, what makes it different to a CDP? How do you ensure customer experience is prioritised?
Many CDPs are focused purely on solving the disconnected customer data issue for large enterprise organisations. They provide integrations for data ingestion, record stitching to match datasets together and feed the unified data into a data warehouse.
Lexer is different. We are 100% focused on retailers and brands that sell direct to consumer. We combine the capability of a CDP with tools that help all customer facing teams to better understand and to create the experiences that drive engagement and revenue. This includes analytics, segmentation, media activation, customer services and soon to be clienteling tools.
Google recently announced they would be eventually banning third-party cookies, do you see this as a good thing? Has the announcement driven more traffic toward Lexer?
We think that the growing respect for customer privacy is a good thing. The removal of third-party cookies has also inspired marketers to explore better ways to reach their customers, while learning how to manage zero-party data and first-party data (some of their biggest assets) far more effectively.
As a result, Lexer has experienced more demand. The demise of the cookie has had the greatest impact on acquisition. As a result retailers are now more than ever focusing on growth and retention activities.
What do you think are the three most impactful ways retailers could be using their data today?
- Identifying and deeply understanding their best customers. For most brands the top 20% of customers will make up between 60-80% of their total revenue. Deeply knowing these customers drives huge operating efficiencies in improving acquisition performance and prioritising marketing and product investment. Many brands allocate marketing investment evenly across their customers which results in missed opportunity with high value customers and wasted spend on low value customers.
- Understanding the role that product plays in customer acquisition and growth. Not all products acquire equally valuable customers. Typically a retailer will have a few hero products that acquire a higher volume of future high value customers. Understanding and focusing these products will help improve acquisition and customer lifetime value growth. Secondly it is important to understand your customers behaviour based on their product of first purchase. This provides key insights into their likelihood to buy again, the products they are likely to buy next and when they are likely to place their second order. Putting this all together is the cornerstone of a highly personalised messaging strategy to improve the conversion to second order.
- Testing messaging and channel effectiveness. There is a lot to be learned and incremental revenue earned by understanding how your customers best respond to an offer and marketing creative by channel. Having a robust strategy continually A/B test offer and creative by audience and by channel should be the backbone of all marketing teams. With the decline in measurement effectiveness caused by iOS 14.5 we are seeing a big uptick in sales incrementality measurement using hold out groups to measure the efficacy of marketing to customers in Paid Media.