A Data Centric Approach to A New Retail Experience

SINGAPORE - In Microsoft's Data Culture Champion Series in Asia, we look at how Mr. Auttapol Rerkpiboon, Senior Executive Vice President, Oil Business Unit, PTT Public Company Limited turned to data to transform their customers' experience at retail across more than 1,400 service stations nationwide, and why he believes that the era of "mass marketing is over".

In the digital transformation era, even business titans can find themselves brought low by rapidly changing customer needs. Consumers in Thailand are far more connected through mobile and social cloud services than ever before. Their attention span is short and their loyalty fickle. Businesses like PTT understand that if they continue in their old ways, they will soon find themselves irrelevant. 89% of the Fortune 500 companies in 1955 are in fact no longer in existence.

Auttapol Rerkpiboon, Senior Executive Vice President, Oil Business Unit, PTT Public Company Limited shares, "Now is a time when companies are facing unpredictable and challenging business environments. Customer segments are exhibiting a larger range of behavioral patterns, interests, and expectations."

A Microsoft Asia Data Culture Study 2016[i] of 940 business leaders from medium to large companies in 13 markets in Asia found that 88% of them agreed it was important for their organization to have an agile business that is data driven. However, only less than half of them (43%) believe they have a full digital strategy in place -- and this is indeed worrying.

PTT Public Company Limited, Thailand's only Fortune 500 firm[ii] and one of the leaders of Thailand's energy sector, is making their focus on the customer and their data a key strategy for their transformation in the digital era. This is especially evident at PTT's retail business, where the Group has modernized its gas stations around the country to offer more diverse services, including expanding to offer groceries and F&B to their customers. While finding a convenience store at a gas station is not an unfamiliar concept today, the concept of personalizing customer experiences is a perpetual business challenge for many brick and mortar retail businesses.

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The PTT team continues to explore avenues through technology to drive their digital transformation journey in order to stay relevant to the new generation of customers. Auttapol, who leads the Oil Business Unit at PTT, explains: "The world has entered the "digital economy era," an age in which technology is a significant influence on consumption of services and economic development. Thailand is not an exception. Any organization that conducts business in their old, traditional ways will no longer thrive in the next five years."

"The Era of Mass Marketing is Over"

PTT's management team realized that they needed to drive greater customer loyalty in order to ensure continued growth for the organization. Today, an average Thai motorist visits PTT not just to top up the gas tanks, but also to get grocery shopping done with their trusted PTT Blue Card, where they can exchange points earned for treats like discounts on resort stays and free meals.

"PTT Blue Card represents a core component in our strategy, providing customers with exclusive benefits that strengthen their relationship with the brand -- resulting in greater brand loyalty and widespread word-of-mouth," shared Auttapol. "Customer insights are highly valuable as a foundation for our work. When it comes to marketing, the era of mass marketing is essentially over. Every marketing activity and campaign must come with its own distinctive characteristics, which in turn allows us to respond to the different needs of each customer."

To the customers, the PTT Blue Card is a customer loyalty program that rewards. But with over 1.6 million cardholders and approximately 150,000 transactions recorded per day, PTT Blue Card is a vital source of customer data. To Auttapol's team, the PTT Blue Card provides a rich database that enables the team to understand their customers better in order to develop suitable consumer promotion programs to deepen their relationships with their existing customers, while acquiring a new customer base.

Embracing the Digital Transformation Journey with Big Data

As the first energy company in Thailand to utilize big data for its operations, PTT launched the "Smart Analytics with Big Data" program in August 2015 with annual plans spanning a five-year duration to transform itself for the digital era.

Previously, the team was unable to combine data sets generated from customers with those from internal support operations. This meant that they were not able to cross-analyze data sets that could uncover customer insights to better mold the PTT Blue Card program for its different audience groups.

As a result, Auttapol's customer relationship management team identified that they needed to rely on big data tools to achieve scalability in their analysis. Compared to deploying a data warehouse platform, big data tools enabled the team to be able to analyse larger sets of data from more information sources and a wider range of perspectives. This approach also allows PTT's operations to combine data from both internal and external data sources to uncover new insights through a centralized system.

Auttapol shared: "Customer insights are highly valuable as a foundation for our work. However, we are not limited to seek these insights only from our customers. Instead, we can make use of the vast amounts of information around us to achieve maximum, positive impact.

In order to make the best use of data, we chose to implement Microsoft's data platform solutions -- including Dynamics CRM and SQL Server -- as we feel that Microsoft understands our business challenges and has what it takes to enable us to transform. With this deployment, we are able to develop innovative offerings that satisfy our target customers, resulting in repeat purchases and higher brand attachment. Furthermore, we were able to achieve a shorter deployment time thanks to support from Microsoft's experts."

With the program, PTT is now able to develop new business insights to drive operational excellence in every aspect of its operations, and transform the organization into a customer-centric, data-driven organization. Today, the organization is able to develop marketing campaigns that meet the demands of specific customer profiles and even deliver personalized marketing activities that create desired customer experience, resulting in greater customer and brand loyalty.

In addition, Auttapol's team has benefitted from improved efficiency as the platform reduces time for insights, which in turn creates a level of agility for his team to develop marketing and action plans.

"Proposals are now submitted in a matter of days, rather than a lead time of three months. More importantly, we have been able to maintain our leadership position in the domestic market in a sustainable and cost-effective manner," shares Auttapol.

Auttapol is now raring to expand the program to a broader team in the next few years such as its marketing and cost management departments, where he believes data will be key to unlocking even more customer insights.

Preparing for digital transformation is about "Data Culture" readiness

In reflecting PTT's year-long journey, Auttapol had the following learnings during the implementation of the "Smart Analytics with Big Data" program:

1. Transformation needs to be driven from the top

"Every organization should understand the context of its own business and have clearly defined goals and objectives." Auttapol believes that in order for an organization to successfully transform for the digital economy, management needs to communicate its goals and vision to its employees. Without a vote of confidence from an organization's management team, PTT's workforce would not have been able to recognize the impact of the program on the company's competitiveness in today's fast-changing economy.

2. All-round readiness is required

Embracing a data culture is beyond technology. This can only be accomplished with full readiness in every aspect -- including hardware, software, data, analytical expertise, as well as a data savvy workforce.

3. Developing an analytical workforce

From Auttapol's point of view, its people are as important as its hardware investments. The customer relationship team underwent training to have a better grasp of the platform deployed, and also had an analyst within the team that helped make sense of the data and insights generated.

4. Have a clear ROI set for the investments made

Auttapol recommends that business leaders have clear objectives and ROI be set when it comes to data-related investments. By pegging a value to the program, teams are more accountable in generating results that match the level of investments made.

Making the investment to adopt more data centric approaches may carry with it a risk of failure, but that is a risk even the titans of the business world must make lest they fade away into history. As Auttapol puts it, "our focus on data has totally transformed the way we do business and I believe it will continue to deliver the kind of performance that sets us apart from the crowd."

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