Marketing analytics is the number one investment area for CMOs, according to Gartner's 2017/2018 CMO Spend Survey. By the end of this year, CMOs are likely to spend more money in technology than CIOs, Gartner said in 2012. As such, small talk with CMOs are often filled with big data, machine learning and creating a single-customer view.
However, according to a survey by The CMO Council, 95% of CMOs struggle with understanding their consumer journey, with only 3% saying their data sources are integrated and aligned.
Data is the new oil, but oil is not really helpful if you are driving electric car. As such, to create a truly data-driven organisation, you need to change how your organisation works:
1. Data as process: Action is all that matters
No one is doubting the potential of data, with 70% of business executives say that analytics is extremely important but only 2% have yet achieved broad positive effect with their analytics efforts.
Data itself is meaningless, and all that matters is action. You might get monthly report filled with vanity metrics and nice graphs, but so what? How that report will drive your business? How will the numbers get you closer to your customer? The information that the fuel tank (or battery) of your car is empty is meaningless if you don't fuel (or charge) your car.
Investment in technology is only one side of the coin, but the collection, analysing, deriving insights, building strategies and disseminating these strategies throughout the whole organisation and creating effective process for it is even more important. This requires investment as well (both monetary and time), and also attitude shift amongst employees (see point three).
Reporting is meaningless if it does not result to clear action points.
2. Smart data collection: Occam´s razor
There has been a fetish of big data amongst companies. Companies have been collecting all possible data points, with shaky premise that eventually when you put those data points together magic will happen. But having more is not always better.
The overblown Cambridge Analytica-Facebook scandal is a good example of this. Their approach was combination of psychographics and micro-targeting. Although it is possible to build a personality profile based on your online behaviour, according to an article by Vox, that is not particularly effective in predicting how people vote, a ScienceDirect study about personality said.
Micro-targeting works also to certain extent, but there is limit when the additional variables bring more value. Boat ownership correlates to being Republican, Eitan Hersh, professor of political science at Tufts University, once said. But if you are targeting rich white males in a specific town, you would already know that he is Republican regardless boat ownership. Of course knowing that someone owns a boat is crucial if you are selling boats.
That being said, although we live in complicated world you should always aim for the simplest solution. Don't hoard more data. Focus on getting the most relevant data.
3. Data as change management: Everyone is an analyst
Responsibility to understand numbers cannot only be assigned to that lonely, usually slightly introverted, "data guy". Everyone in the company should have basic understanding of statistical methods and what those numbers in the reports actually mean. This helps you to recognise misleading charts and the data "snakeoil salesman". Nothing is more convincing than lying with facts.
Because data is the new universal language, you should at least be at a conversational level regardless of your job role. Data is not only responsibility of data department, everyone should become data-driven.
4. Data as human right: Security will matter
Data is the new oil, but it is also the new oil spill.
Historically people have not been particularly worried about giving their own data for cheap rewards or personality tests. Cambridge Analytica scandal hardly made a dent to Facebook user figures. Not to mention that same people advocating Facebook boycott were happily using Instagram and WhatsApp.
The general lethargy against data rights does not mean that people will not eventually start to care about them. You don't worry about your data security until your identity is stolen. GDPR in Europe has now created a golden standard for how data transparency should work.
Progressive firms should consider implementing elements of it to their operating model even though this region is not yet under GDPR. You should let your customers know what data you collect about them, why and how it will actually benefit them.
The transparency of data is win-win situation for both consumers and companies. Consumers know that they are not exploited and companies can collect more relevant data to serve their consumers better. In the future, blockchain can also enable that you can access that relevant data point on case-by-case basis and don't need to hoard data.
Be transparent about what data you are collecting.
5. Data is behaviour: Experience, effectiveness and efficiency
The opportunity to learn more about our customers will explode in coming years with sensors that consumers are putting willingly in their homes (voice assistants, IoT). In certain countries there will also be more surveillance tracking people as they move throughout their day. These devices will detect facial expressions, interpret speech, and be able to analyse physiological signals. Opportunity to truly understand your customers will take giant leaps in the future.
The better you understand this behaviour, the better experiences you can create for your customers. You can target and serve them more effectively. With machine learning and predictive models you can automate and streamline your processes, resulting to better efficiency.
All the data you are collecting should get you closer to your customer and drive to actions that improve customer experience, effectiveness and efficiency.
So buzzwords aside, being data-driven means that you put customer at the heart and centre of your business. You don't make guesses but act on real behaviour. Eventually you can track everything, but the question is will you make those data points benefit your business?
The writer is Riku Vassinen, head of digital transformation, J. Walter Thompson Singapore.
(Photo courtesy: 123RF)