Introducing the Customer Algorithm: Bringing your digital and physical analytics together

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The digital economy is facilitating a new era of engaging with customers. And so, businesses are always looking for new and innovative concepts to improve the customer experience.

We wrote a piece earlier this month around ‘new retail’; a strategy first introduced in 2016 by Alibaba Founder, Jack Ma. We have taken this concept and the principles it carriers, and extended it far beyond the retail sector into hospitality, entertainment, transport, healthcare and more. We’re calling it the Customer Algorithm, and it applies to all businesses that have a physical venue.

The Customer Algorithm is a concept that aims to combine data from both the online and offline worlds, and leveraging this data to enhance a customers experience through personalization.

Your customers have their own ‘digital algorithms’ – design for them

Personalizing a customers experience can have a significant impact on retention and revenue. However, efforts to engage with customers and make the most of revenue opportunities fall flat when you can’t identify who is in your venue – more than half of customers can be anonymous entities.

Customer segmentation is key to anticipating customers needs, and a proactive approach to removing customer anonymity and identifying their needs and behavior is critical.

You must place customers’ at the center of your operations, with full consideration of the end-to-end customer experience, from awareness right through to purchase and referrals.

You therefore need to commit to embedding data and smart technology into your operations, because in order to place customers at the center of your operations and understand their ‘digital algorithms’, you need to know exactly who they are and understand their buying requirements; both in the online and offline worlds.

The value of data capture

Understanding customers and how they engage with your brand means collecting data. Specifically data around demographics, interests, engagement, dwell and frequency of visits.

You can begin to gather this data through a number of different methods including, website analytics, social media, e-commerce etc. Although, notice that these methods of data capture focus on the digital world, and not the physical.

Remember that the customer algorithm concept is one that aims to combine data from both the online and offline worlds in order to achieve personalization. Offline makes up a huge proportion of your customer base and the importance of capturing this kind of data should not be underestimated. If you fail to do this, you risk being left behind.

Where online metrics aren’t available to paint a picture of customers’ demographics, likes or dislikes, transforming your venue itself, embedding data and smart technology into your operations, is the future of the customer experience.

Data capture methods in a physical space can include; point of sale, location analytics, and WiFi analytics, just to name a few. Using these methods, you can not only begin to understand who your customers are, but you can start to build an in-depth understanding of how they engage with your venue. This data is crucial in allowing you to design for their ‘digital algorithms’ and in enabling you to reach a proportion of your customer base that will be missed through deploying digital data capture alone.

Combining this data with your online efforts to enhance the customer experience through personalized engagement is key to implementing a successful Customer Algorithm strategy.

To help businesses understand the importance of marketing personalization and how it can impact revenue and customer retention, we have developed an in depth guide covering every aspect of personalization from understanding the Customer Algorithm, to achieving personalization through data capture, to creating a business case for marketing personalization.

To get a copy of the report, please email

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