A lot of companies – especially software vendors - are talking about the potential of big data. Proponents says that analysing big data sets can help businesses derive competitive insight that might give you that critical edge on competitors. But is it all hype or is it something that all companies can make use of?
Online European betting exchange Betfair is one company that has already put a big data strategy in place, mining vast quantities of transactional information from its website to better understand its customer. They’ve even been using Six Sigma tools to help analyse the information.
Antoine Bonello, Global Head of Process Improvement at Betfair and a Lean Six Sigma specialist explains how the company is using big data for an improved customer experience, why Six Sigma and big data go hand in hand and how big data can help you make more informed decisions about what customers really want.
Editor's note: this is a transcript of a video interview conducted earlier this year. Watch the original interview here: How Big Data is a Differentiator for Improved Customer Experience
Listen to the podcast here: Big data or big hype?
PEX Network: Can you give me an overview of Betfair?
Betfair is the world’s biggest betting exchange. We are one of the main companies where customers can back the outcome of an event and lay the same outcome. What is novel about Betfair is that the customers bet against each other. We do not set the odds, the odds fluctuate depending on what the customers are betting on or not betting on. Betfair has been around for 12 years and the exchange technology that we’ve created has really disrupted the gaming industry - which was mainly based around bookmakers. With Betfair you don’t need the bookmaker.
PEX Network: It also takes place predominantly online?
We are an online company. It’s only through the advent of the internet and online technology that Betfair could exist. Behind the site is fairly sophisticated technology that matches the customers bets, matches them up with other customers bets, the markets are settled and then customers can withdraw the money. We operate very much like a stock exchange and a clearing house. We actually handle more transactions a day are more than all the European stock exchanges - the FTSE, the DAX, etc. - handle in a day so there is a lot of sophisticated technology behind the scenes to enable the product that the customer bets on.
PEX Network: I understand that your process improvement programme is putting real emphasis on placing the customer at the centre of the company - what is driving that?
It is not just a process improvement programme but it is a whole drive across the whole company focusing on the customer. We are all about the customer. The exchange would not exist if there are not enough customers betting on it so we need to make sure that we not only provide value to the customer, which is inherent in the business model, but we also provide a good customer experience right from the first time they hear about Betfair. That means everything from branding; registering for their account, betting, and any customer touch points like getting in touch with our contact centre and the way we reach out to them through our promotional material, adverts, etc. We have seen that the only way forward is to put the customer at the centre of everything we do because it is the customer that makes us.
PEX Network: A lot of companies say that they want to put the customer at the heart of what they do. What does it actually mean to you and what would it look like to achieve it?
It is easy to say it. That is one thing about the whole customer philosophy: you can say it but how do you move on from that? We just found that you cannot improve something unless you measure it. What has really made a difference to us is to start measuring what the customer thinks about us. We have introduced a company-wide NPS (Net Promoter Score) programme, so that on a monthly basis we now know what our NPS score is.
Through net promoter score we are basically asking the customer whether they recommend Betfair to their friends or family. We do an opt-out because some people might not be comfortable in recommending a gambling company. We make that very clear; if you are not comfortable just tell us, you don’t need to answer the question. But what the net promoter score has provided is awareness of how we are doing across regions, across products and where is the trend going. What is also nice to see is you might launch a new version of your software or an updated web site and you can see whether the customer likes it or not through the score in the survey.
Back to your question, though, once we are measuring what the customer thinks about us then we can give different areas of the company the relevant things that the customer is telling them to focus on and this has really received a lot of attraction top down and is now really making a difference. The process improvement team is also aligned towards improving the score in specific areas and hence improving the customer experience.
PEX Network: I understand that Betfair is a very data rich company. How are you making use of this data? Where does big data fit in the drive to improve the customer experience?
We’ve got a lot of data; much more than we can probably analyse and go through in a lifetime. As I said, we are a very transaction rich company. We process millions of bets a day, but the data is not just about the bets, it is all about the customers as well. We ask the customer what they think of us but we also have loads of data to see what customers are doing once they are on our site and once they engage with our product and that is crucial to giving the customer a better experience. Sometimes it is not just about what the customer wants but it is telling them what they need and we are really trying to do that because we can understand what their behaviour is through data.
One example of how we have used big data recently is we launched Betfair on mobile. What the data has enabled us to do is look at, okay these customers like mobile and they are using it and they have this behaviour from which we built a profile based on that behaviour. We then went to customers who have not used mobile but fitted that profile and told them listen, we think you will like this mobile app that we have done, here it is, try it out. It has been really successful so we have suggested to these customers that they will like this new channel of our product. But also we did not just shoot in the dark; we knew that based on their behaviour, based on their profile we knew they would like it. The uptake was great. Most of the customers we suggested this to use mobile and are still using it, but it is also because we knew they would like it because of big data, because of what the data has shown us.
PEX Network: Take me through how you actually get those kinds of insight from big data. How do you make sense of it? What tools and approaches are you using?
We have a big data business intelligence team, a big data warehouse team and we use standard data mining tools, but then that is where Six Sigma has really come in. Most of the tools you would be trained in as a Master Black Belt like binary logistic regression, clustering - all these geeky techniques that usually you cover but then you never really use - this is where myself and my team have really found them useful. It’s not just about getting the data: it is about what you do with it and also how can you use the data to predict and anticipate customer behaviour and make business sense out of it. That is where these two have been really useful. But with regards to software etc. it is just Minitab - just standard Six Sigma software packages.
PEX Network: How would you say big data fits into improving the customer experience. Could you elaborate?
When you look at the big online companies - Google, Amazon, etc. - they are giving you content that is relevant to you because of your previous behaviour with their products. So if I’ve bought a certain product from Amazon, the next time I log on I’m going to get similar products to what I’ve bought recommended to me. That is because there’s a high likelihood that since I bought ‘A’ - and because ‘A’ and ‘B’ go together - that I would also be interested in ‘B’.
All of that applies to Betfair as well. We look at the customer’s past behaviour and look at the data, and then we can recommend markets and events that we know you’re going to like based on your previous behaviour. This is important for marketing promotions but also down to the basic site itself where we recommend specific markets to customers and save them the pain of having to search for the market. It’s there in just one click away.
The data also allows us to localize our offering. We are a global company, we operate in all regulated markets where we are allowed to operate and sometimes you might come up with a promotional idea, a banner on the site that makes sense in one region but not in the other. By looking at the data we are immediately going to see that and then we will make changes and localize the offering.
The data will show you immediately whether you are doing the right thing or not. There is a lot going on with multivariate analysis so you’re looking at different factors that get a customer to click on a certain area of the site; where do most customers spend most time on the site, where do we think we’ve got paying points through the online customer journey? It is only through data that you can find these things.
This is a bit different from Lean. It applies in the steps, the non-value added ones, but having the data there makes it much easier to show people what we need to focus on. Six Sigma is also then very important. That is why we made good use of the interaction between Lean and Six Sigma. You could get people in the room- and we do that - but unless you have the data, people would just be assuming from their experience as customers of where we need to improve. We have it easy because we have the data, so we have a real picture of what is going on, which then allows us to adapt, optimize and improve - sometimes on the fly.
PEX Network: Where does big data fit into process improvement?
You can reach that low hanging fruit without necessarily using too much data and most of the time low hanging fruit gets you 90% there. But then again it is still low hanging fruit so everyone can do it - your competitors can do it as well. What big data enables companies to do - some more than others depending on the sector - is make informed decisions rather than a guess, also because you know what the customers are doing. You have in ones and zeros the customer’s behaviour and it is not speculation, it is not what the customer thinks, but it is actually what the customer has done. Big data helps any company understand the customer better but also anticipate what the customer might need, which is very powerful. Big data is not a ‘must have but it is definitely ‘very nice to have’ and can make a big difference in getting you from that 90% closer to your objective.