(pictured: Darrell Ludowyke)
For super funds, the term ‘big data’ has generally been regarded as something its IT people and service providers, such as custodians, needed to be aware of. Not any more. Big data has come of age as something all CEOs and marketing people should be addressing.
While the use of the term is probably on the wane, recognised more as clever marketing than an explanation for how data collection and usage is evolving, it has at least prompted far greater interest in database management from the non-IT executives in big companies.
At Empirics, the data analytics affiliated company of administrator Link Group , super funds still make up about 90 per cent of its business. But recent developments have shown the very broad applications which can enhance the customer experience for all sorts of businesses, including super funds.
Darrell Ludowyke, Empirics CEO, says that the company offers retail solutions too, by incorporating data feeds from, say credit card expenses, and turning the information into deeper insight on behaviours and further dashboards for clients to use.
An area that super funds might consider involves collaboration with affinity partners. He says: “If you think of the members of HostPlus, for example, mainly from the hospitality industry, you can set up a data set to allow collaboration through special offers from hotel chains. Or say a health and fitness chain and Hesta could be brought together to collaborate on offers… We have a platform that takes care of all the technical privacy requirements so each partner never sees the others’ names or details. Funds can send smart targeted messages to members about things that are relevant to them. We’re trying different things to take this industry forward.”
Ludowyke, with business partner Bill Kelso, has been championing the cause of better direct communication between organisations and their customers for years – since well before the two set up Empirics in 2004. In 2011 they sold 51 per cent of the company to Link, which enabled the acceleration of systems development.
“It’s really just ‘direct marketing 101’,” he says. “The movement of data allows us to target intelligently, run tests, and then measure what’s working and what’s not working. We encourage funds to do direct marketing and try different things and we can channel the messages according to which distribution media the member prefers.”
One issue facing all organisations is a decline in opening rates from marketing emails. According to data from the Australian Communications and Media Authority, financial services has one of the lowest unsolicited email opening rates at 23 per cent (in a 2014 study).
“That’s because the industry has been sending too many generic messages, with too little relevance, for too long. You have to get the project and IT staff out of the way and put the marketing and operations people in charge or whoever is charged with being at the forefront of how a fund is best harnessing the member experience,” Ludowyke says. “And then let the specialists get on with the job. If you want to be known for your smart use of data to create the best experience for your members… it’s not an IT function and it’s certainly not reporting.”
Empirics has recently been commissioned for several projects from its data science team to do with predictive analytics and related areas. This is where Empirics helps funds analyse all available member data to predict member behaviour. A common myth is that if a member looks at his or her account balance often, it’s a sign of engagement. It may actually indicate there is a good chance he or she may be thinking of changing funds. The fund could be proactive and send a message to the member offering to assist with information.
“This science is definitely taking off for the more advanced funds,” Ludowyke says. Among new products being created, Empirics is looking at the insurance sector to see what insights it can bring to assist them and also super funds.