Pulling Insights from Data Hairballs: Five Steps to a Successful Data-Driven Marketing Strategy
When marketers consider the massive amount of data from which they have to pull insights, they may envision threads of demographic information, social media comments and purchase history. Lisa Arthur sees hairballs.
Arthur, chief marketing officer of Teradata Applications, is author of the book, “Big Data Marketing: Engage Your Customers More Effectively and Drive Value,” which released Oct. 14. The book is an analysis of the many layers of corporate and marketing data and the daunting challenge it is presenting for business. Arthur took a few minutes from her speaking schedule at the DMA13 conference in Chicago to talk about the key challenges businesses face today, the role of loyalty data and the five steps to better using marketing data.
She started by sharing an eye-catching statistic from a recent Teradata report, “Data-Driven Marketing Survey” – of 2,200 global marketers surveyed last summer, only 18% said they have a holistic view of the customer and only 10% use the data in strategic and systematic ways to better engage.
“Those (figures) really spotlight that the snarl of data is preventing marketers from being more relevant with their target audience,” she said.
That snarl of data is in fact one of the three key challenges businesses face today, Arthur said. The others are organizational silos that prevent businesses from being more customer focused and a lack of relevancy in communications.
As for the role of loyalty marketing: “What I see is using the loyalty data as a way to think differently about the way you segment your customers,” she said.
She provided an example of a Teradata retail client that found, upon digging deeper into the research, that its customer base represented fewer segments than it realized. Teradata concluded the retailer could know its customers better through targeted sub-programs for each segment – be it the discount segment or a convenience segment. The retailer sent different offers to its variety of segments, and sales increased dramatically.
The point was that the retailer did not recognize the value in its data. Likewise, in doing research for her book, Arthur said chief marketing officers repeatedly asked her the same questions: what is big data, where do I start, and what's the value? Her response is the five steps to a successful data-driven marketing strategy, outlined in her book.
- Get smart, get strategic: Marketers have a tendency to be too tactical, Arthur said. Instead, they should approach challenges with a customer experience strategy, like a loyalty strategy. This strategy should align with the business's shared vision, mission and goals and with what the marketing team is trying to accomplish. Five fundamental components should inform the plan: the customer interaction strategy, analytics strategy, data strategy, organizational strategy and technology strategy.
- Tear down the silos: All groups within the organization should collaborate to see the big picture. For instance, silos exist within marketing because it is so specialized. The digital team has a wealth of insights, for instance, but are they getting back to the creative team and email marketers? After the group is consolidated, the organization should remove the silos between marketing and other lines of businesses. But, she warned, the customer strategy needs top-down buy-in to work.
- Untangle the data hairball: There is a lot of data in organizations that, because of either politics, lack of knowledge or lack of prioritization, is still sitting within fragmented systems and silos (which is why tearing down silos is necessary). As the organization untangles those disparate streams that make big data, they should apply small tests to get their arms around it. By doing this, they can understand the path to churn and correct it by improving the experience, which translates to improved loyalty.
- Make metrics your mantra: Arthur met with one chief marketing officer who told her his team was afraid to be measured because they were afraid to be fired. Metrics should be embraced, not feared, by all organizations. If the team fears measurement results, it is time to change the culture and redefine the company's return on investment.
- Process is the new black: The marketing department traditionally is not very process-driven, which may be why the IT team doesn't always like to work with it. But that is changing as more marketers recognize the need to agile with real-time data. Savvy marketers are embracing the process so they can be more responsive, which in turn improves the process.
Looking at the future of data-driven marketing and loyalty, Arthur sees customers leading the way to how marketers provide relevant experiences. That, she said, will require delivering experiences that delight the customer.
“For that they will reward us with their loyalty and their dollars,” she said. “We are going to need to simplify the experience for both consumers and the way we have access and usage of data to drive that loyalty.”
“Big Data Marketing” was published by Wiley. All profits from the book will be donated to the American Red Cross through a Teradata charitable group called Teradata Cares.