Getting Into the Data Game

“Big Data” is a buzz-phrase that is tempting marketers with the promise of increasing customer engagement. While big data is part of a larger solution, the real power lies in using the right data. Marketers want to deliver the right message to the right client at the right time.

The Data Challenge

In today’s market, there is an abundance of information available on customers. Marketers have access to transactional, demographic, psychographic and behavioral data. While there are many data sources and list providers, the challenge is figuring out what data points really matter and determining how to apply that information for increased customer acquisition, loyalty and ultimately return on investment.

In a 2018 NAPCO Research study titled Omnichannel Marketing: A Key to Unlocking a Powerful Experience, 457 marketers indicated that their No. 1 strategy for delivering a better customer experience was to enhance the use of customer data.

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The Facts

Technological advances have spurred marketers' unprecedented access to volumes of customer data. Every time a consumer uses a loyalty card, data is gathered about each and every item they purchased. In fact, research estimates that the amount of digital information increases tenfold every five years.

While volumes of data are available to marketers, there are significant challenges in unlocking its potential, including getting data too late to act on it; dealing with legacy systems; understanding and analyzing the underlying trends; and the lack of a complete view of the customer.

So, What’s a Service Provider to Do?

Service providers not in the variable data/cross-media services market today need to reassess their strategic direction. Marketers will continue to focus on leveraging data and multiple channels of communication. It is an opportunity you can’t ignore and service providers either need to partner or develop the skills to participate.

Given the market complexities, if you offer data services, you need to consider how you can better support marketers that are “drowning in data and starving for information.”

Data-driven marketing doesn’t need to be as complicated. Here are fundamental principles you can put in place when working with clients to simplify the process of creating data-driven campaigns.

1. Start with the customer’s strategy. The customer needs to have a clear picture of the campaign objectives and what they want to accomplish. Is it new customer acquisition, retention, increasing share of “wallet”?
2. Determine what data assets the customer has available (e.g., analytics, monitoring tools, application builds, CRMs, databases, etc.) Work with the customer to identify the data points that are most relevant to the campaign objectives. For example, if you are working with a car dealer to sell new cars, understanding which customers have leases expiring is a good starting point. Alternatively, if you are selling life insurance, couples that recently had their first baby are a good target.
3. Create goals depending upon what the data tells you (e.g., conversion rates, member counts, buyers, downloads, etc.)
4. Create a hypothesis with the client that will lead to achieving the goals (e.g., by making this offer, we will increase the conversion rate by 6%).
5. Test the hypothesis (no one knows, just test). Not all offer strategies are created equal, so testing is essential. Some offers will work with some demographic segments while the offer may need to be altered for other segments.
6. Set up relevant reporting. There are many data analysis tools that have dashboards to track responses. Service providers need to simplify the content and identify what is working well and what is not.
7. Adapt your tactics (change according to results rather than gut feeling or taste). Work with clients to help them understand that working with data and cross-channel direct marketing campaigns is a journey and not a destination. You need to use the insight that you gather to learn, adapt and improve.

Stepping Up to the Challenge

Service providers need to help marketers embrace data to deliver a relevant message. It means working with clients to understand the data they have and what data points will drive more relevance to ultimately engage the customer.

Start small with campaigns that you can digest and make sense of. Use those campaigns to decide how to change tactics, offers, creative and value propositions. While more marketing technology and data is available, it is not about the mailboxes you reach, but your ability to deliver relevance and get the recipient to open what is in them. Consumers expect relevant content regardless of channel and that means a personalized message at the right time.