Almost everything consumers do today is connected to digital technology. Every interaction triggers data: shopping online (on a tablet or smartphone), watching a video on YouTube, sharing content on social media, clicking on an advert or redeeming a voucher. Brands can use this data to create insight about their customers and prospects and deliver targeted and personalised offers, content or adverts.
We are witnessing a major strategic shift in the brand-customer relationship. The old days are gone when brands could simply push products at customers. Time is scarce and media is plentiful. Brands increasingly need to adopt a more sophisticated approach to customer marketing.
Data informs digital experiences
Discerning and digitally savvy consumers expect brands to understand them and anticipate what they are looking for. We expect brands to use the data they have about us intelligently to deliver meaningful experiences specific to our personal context.
If I’m thinking of buying a car, I want to engage with media about relevant auto brands. If I’ve just bought a car, I’m more interested in related information about insurance or ‘how to’ maintenance tips.
Because customers know brands can deliver contextual information, intolerance of ‘spam’ or blanket communications is higher than ever. Investment in customer insight is fast becoming a strategic priority as brands are acutely aware that customers are spoilt for choice and they must create loyalty.
The ‘Data deluge’
The challenge is magnified by the deluge of data: just a few years ago, in the ‘old media’ world, brands knew very little about their customers. Retailers knew little about who shopped in their stores; publishers, at best, had a database (often an Excel spreadsheet) of their print subscribers.
Fast-forward to today’s omni-channel world with multiple customer touch points – print, websites, apps, social media, transactions – all with associated data streams. Managing the customer relationship is becoming a complex art. This complexity and data deluge is set to swell.
According to Microsoft, over the next five years we will generate more data as humankind than we have over the past five thousand years. Data is now the core currency of the digital universe, with commercial models increasingly based on real-time data, which has reinvented channels like digital advertising. Amazon, Google and Tesco are examples of massive disruptors in online retail, search, customer interaction and advertising – all powered by data.
Our increasing use of smartphones and mobile tablets, particularly in the UK where mobile data usage is highest globally, according to Ofcom has not only fuelled companies’ data banks but also opened up new opportunities for customer interactions.
Big data: small is the new big
Let’s deal with the ‘big data’ bandwagon that’s commanding so much attention. ‘Big data’ is a poorly defined buzzword (originating from computer science and machine learning) which has a broad application, however most organisations haven’t yet got to grips with ‘small’ data.
Creating the single customer view
The secret to creating value from customer data is not big data but useful data that give brands the strategic insights to meet business goals.
This exercise starts with identifying and pulling together a few key offline and online data sources to help brands build a picture of their customers’ preferences, spending and behaviours on different channels – the holy grail of the ‘single customer view’.
They can use this insight to give customers more of what they want – cross-sell and up-sell products to grow revenues. The customer benefits by receiving personalised offers relevant to them. It is a two-way value exchange – a necessary condition for brand loyalty.
As the customer deepens or widens their interaction with the brand, additional data sources are created and may be added to the original ‘single customer view’, thereby enriching the profile further.
Over time, this enables increasing granularity in the brand-customer relationship. Start small by creating two-way value from the lowest hanging fruits and build out from there.
The cost of data investment
This is a fundamental departure from the BI (business intelligence) and data warehouse world we once lived in, which gave rise to the fear that data projects take 10 years and require millions of pounds of investment against very uncertain ROI (return on investment). We at @newmedia2.0 sometimes hear this from clients at the start of a customer data-to-insight project.
The good news: a lot can be achieved in the short term without a major investment. The bad news: it’s easier for incumbents when the customer relationship becomes increasingly granular (insight-based), it becomes harder and harder for ‘new’ brands to compete. This is true for both B2C and B2B customers.
Create meaningful relationships
Whereas traditional marketing approaches focus on taking share from competitors through new customer acquisition, data-centric marketing focuses on building deep and meaningful relationships – and two-way value – with the customers’ that brands already have.
They can then use the knowledge of what makes your existing customers buy your products and stay loyal to you to target new prospects.