Today, fewer than 10% of companies use their data in a systematic, strategic way. But that will change: 71% of marketers plan to implement a big data analytics solution in the next two years. As web analytics matures into digital analytics and the well-trusted techniques of database marketing are increasingly embraced by digital marketing, marketers are now able to exploit detailed data to gain individual customer understanding and drive better, more relevant customer interactions.
However, the question remains: how will marketers make a successful transition towards true data-driven marketing? The challenge is not only the volume of data and diversity of data sources. Marketers need to introduce the right tools, processes and skill-sets to harness that customer data, rapidly analyze it for new insights, and then use that information to deliver personally tailored marketing.
Step One – The Data Foundation
The right data is essential – and that can mean taking tough decisions. If the data you currently receive is not fit for purpose, don't spend months – or years - trying to make it work. For example, if the data is only available at an aggregated level, it cannot deliver the detail required for data-driven marketing or one to one personalization. If data is only provided on an overnight feed, it cannot support real time personalization or triggered email messaging. If marketing only has access to raw data, how can the business context be introduced to deliver any valuable insight?
Creating the data foundation is key.
Step Two – Omni-channel Data Platform
Data-driven marketing is about far more than digital data. Examining email open rates or web analytics provides just slice of the overall customer experience. Combining the strong digital data foundation with other digital channel and offline data is essential to build the cross-channel information platform required to create the essential Single Customer View (SCV).
Today just 18% of marketers have an SCV. The ability to integrate data in a technology stack that can collect and connect online and offline data and support rapid analysis and drive actions is essential to attain customer insights that can be applied across every channel. That's very hard to do in a coherent and coordinated fashion with a series of point solutions. Look to take a platform approach instead: whilst it can be harder in the short-term the long-term benefits will more than pay off.
Step Three – Creating the Cross-Functional Team
Data and technology are just the start. To drive value from these investments requires the right skill-sets to analyze the data to deliver insight and drive action. To be truly successful it is important to create a cross-functional team, including marketers, analysts and IT as each brings their own skills, perspectives and experiences to deliver the best results.
Forrester Research estimates that over 45% of big data deployments are for marketing – but that doesn't mean that Marketing should own marketing data and technology single-handedly: they must also recognize the skills IT brings to big data technology choices and deployment. It is therefore important for the CMO and CIO to work together, leverage different areas of expertise, pool resources and ensure the robust, scalable platforms are in place to deliver long term value.
Step Four – Exploiting Analytics
To date relatively few organizations have extended their use of analytics beyond web analytics into areas such as journey mapping, golden pathing and affinities analysis. Those companies that have pushed on with analytics are reaping the rewards: almost three quarters (71%) have achieved better customer targeting, 58% improved conversion, 51% improved marketing personalization and 51% improved customer experience.Analytics tools provide marketers with the chance to find new insight, including individual customer journey analytics and marketing attribution. To make the most of these tools, marketers need to get stuck in; ask questions of the data and gain real confidence in the depth of customer insight now available.
Step Five – Test & Learn
Data-driven marketing is exciting and offers compelling opportunities to transform the customer experience and engagement.
The results made possible by a well-executed data-driven approach are business-changing so it can feel a little daunting. Don't try to boil the ocean on day one. Start small, gain familiarity with the data, then test and learn to gain understanding and confidence. Once the team has confidence and experience in a range of analytics, it is time to embark upon ever more sophisticated and real time activity.
It is becoming clear that marketers who fail to adopt a data-driven marketing strategy will no longer be able to effectively meet today's consumer needs – or increase their bottom line. A data-driven marketing strategy enables an organization to collect all detailed customer data across every touchpoint; exploit analytics to gain greater customer understanding; and drive immediate, relevant interactions that make a real difference.
It is only by taking the tough decisions up front regarding the creation of the right online and offline data foundation that organizations will be able to rapidly exploit the value of analytics to deliver that essential omni-channel customer experience and two-way engagement.