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The challenge of Big Data: marketing as a data-driven organization
Director of Consulting
Marketing Information Services
As we look towards the new financial year and reflect on the current economic challenges and recent developments, particularly in mobile and social in 2011, one thing that seems to cut through is the growth in data. There’s growing talk and media news about ‘Big Data’; no matter how you define it we have more and more data within our business every day. A recent IDC study found that digital data and information is doubling every two years. And whilst some of the technology and software providers will no doubt push the Big Data concept, we all need to consider how data and its use will affect our business.
1. Facing the data challenge – become one of the Datarati
In a recent report 71% of CMOs stated that they were underprepared for the data explosion. So if you are facing this challenge in 2012, you are not alone. The volume and variety of data is growing with ferocious velocity; we as marketers accumulate customer data every minute – whether from our websites, conversations in social media, emails, traditional transactional or operational systems or from ongoing service history. Those who do well will be those who embrace this and become the “Datarati”. Google's Chief Economist, Hal Varian once said that "Datarati are companies that have the edge in consumer data insight...Data is ubiquitous and cheap, analytical ability is scarce... The sexiest job in the next ten years will be statistician."
The information available about buying behaviour across different channels constitutes real opportunities to engage potential buyers in different ways to drive revenue at every stage of the customer lifecycle at the right time. The challenge is how to harness this, the first hurdle is to decide why you need the data (ie what business decisions will it drive), what data you need to achieve this and how you will pull it together.
2. The new role for the Marketing Data Hub
Forrester recently wrote about the concept of a Data Management Platform (DMP) which offers the opportunity to more effectively roll out segment and customer centric marketing activities. Whilst this concept resonates with anyone struggling with data fragmentation, underused data assets, and a hunger for more audience insight the solution is not simple as it cuts across IT, CRM, legal, Marketing and analytics.
An alternative approach is to start simpler with an enhanced and updated marketing database or hub that at least acts as a funnel to manage multiple data assets. The key here is how to link data at a customer level (match keys) and this in itself is a core requirement for any customer centric solution. For some digital data sources this is a huge challenge as you often cannot identify that individual. Even where you can, current systems and analytics are often focused on events and behaviours rather than the individual and rarely integrate data outside that digital platform. This is particularly true for automation based software solutions. Data and insight through the hub are the foundations; marketers need analytics (business driven) and deployment interfaces to make the insight actionable. By addressing data integration in a phased manner, marketers will create the basis for deeper segmentation and insight to drive revenue performance from campaigns.
3. A new age in Customer Intelligence
Customer intelligence will go beyond traditional fixed segments, dashboards and insight. It will become more advanced and more fluid meaning that more agile and specific models and segments will be developed to drive new customer acquisition and create up sell and cross-sell opportunities more efficiently. This may be a cultural change for some and a new adventure for others. Those more versed in digital analysis will be exposed to techniques to analyse and predict customer propensities and attributes; and those in the traditional space will be exposed to new data assets and the need for a greater range of models and segments that can be used on a pick and mix basis.
The demand for analysts should grow as the market evolves and the ability to create the insight as the business differentiator becomes more important. We have already seen some of this start to happen in email marketing where engagement scores and the application of value scores to customers are being integrated in to more targeted campaigns.
4. Relevance is the new black
Customers are deluged with information everyday so the need for cut through and relevance will only increase. ISPs continue to change spam rules and now see unopened emails as a sign of spamming; to maintain deliverability and reputation, email is moving to a more targeted and relevant approach... and data and insight sit at the heart of the decisioning to deliver this. The days of ‘one size fits all’ marketing are coming to a close. The most successful marketers today are those who are using customer analytics technology to gain a deeper understanding of their customer base. Mining this wealth of information, they are creating targeted offers that stand out from the crowd. As email inboxes become more intelligent, sorting messages by the perceived relevance to the user rather than the date and time of delivery, online marketing must evolve to include customer intelligence.
5. Multichannel, cross channel or omni channel Marketing
Customers have more choices than ever, and are more frugal. This affords them the luxury of demanding more. This is the year that the CRM Marketer will be charged with offering a consistent experience across all touch points and developing the infrastructure that allows for knowledge sharing and smart communication. Integrating communications and decisioning across multichannels in a coordinated, consistent and planned way will lead to efficient cross channel marketing.
In theory it sounds logical but in practice it is difficult. In 2012 brands will not only look at their data and how they analyse it but what deployment tools they have and how they manage these in a customer centric and planned way. No mean feat as this involves both technical and process changes; keep it simple and start with areas that are bought in to the concept. Exploit classic test and learn techniques to prove ROI and expand from there – then the steps to cross channel marketing will be started.
In summary, there are many factors at play but Big Data is becoming a driver in marketing strategy. When you transform Big Data into customer intelligence, and then use it across multichannel marketing, your opportunities for driving revenue throughout the customer lifecycle become enormous.