We're all knee-deep in data. We're surrounded by it all the time. Probably generating it indirectly and adding it to the vast murky pool of information out there in the ubiquitous cloud. Let's not drown in it though, but learn to use it to it's full advantage. Every passing year sees data becoming a bigger commodity and frequently the cornerstone of the most innovative of companies. Fortunately 'data alchemy' is a fairly straightforward process of the transmutation of base data into precious insights.
As a planet our current output of data is roughly 2.5 quintillion (a thousand raised to the power of six) bytes a day and growing. That's a veritable tsunami of data out there. Another equally astounding data fact; when it eventually comes to market, experts believe the self-driving car will generate around 100 gigabytes per second. Or crazily, for a typical FTSE 500 company, just a 10% increase in data accessibility will result in more than £45 million additional net income. Frankly there's a lot of data out there and it's only getting larger!
Whether you're in the business of selling to other businesses or ordinary members of the public, data is essential for companies and it's going to usher in an era of data innovation as companies attempt to balance privacy concerns (*cough* GDPR and the like) with the need for more accurate targeting.
Targeting
For most companies the numero uno role of data within commerce is better and more accurate targeting of potential customers. Here companies are determined to spend as little capital as possible to maximum effect. This is why they are gathering data on how they as a business do things currently, making tweaks based on this insight, and then looking at the data again and again to discover what they need to do to optimize the situation. By targeting people who are likely to be interested in what you have to offer, you are maximizing your advertising power. However, it is essential to formulate a clear business question before you start your next epic data analysis hunt. What are the business goals? What are you trying to achieve? You can easily waste hours of your precious time by getting lost in your data. And coming up with "insights" that are already known or not deemed important can be highly frustrating as well as wasteful. Death by data. To get to grips with this element of the task it is paramount to hire a smart data analyst who can do this and has the ability to turn insights into actions. In reality these are amazingly rare creatures to find.
Targeting an audience
Most businesses will say they have an established view of what their ideal customer looks like and probably how to reach them. One of the key strengths of data is that it can tell you if you're A) actually hitting your target audience in the first place or B) if your target audience has changed or even C) the most effective method of reaching them has changed? One good shot is worth more than many bad ones. Good marketeers preserve their ammunition and lock onto their target before firing. The first step in effective targeting of an audience is to describe your ideal customer . Next is knowing where your ideal customer lives, works and plays, therefore focusing your marketing and advertising effort.
Marketing Analysis
So the most important role of data is paying attention to how well advertising methods are working. To assess the effectiveness of a marketing campaign, you can monitor sales, new customers, requests for information, phone inquiries, retail, web traffic and click-through rates. It's meant companies can now try out these acquisition techniques if they haven't done so previously and test in a safe and reduced risk fashion. One takeaway of data is that it's shown people that traditional forms of advertising are as relevant as ever before. In other words, they have discovered that email, TV or print might be back on the agenda for their particular brand.
A single customer view
For me the greatest opportunity lies with not just knowing and utilizing these methodologies it's also about evolving them so that you hook more and more data sources together. Data integration, refinement and enrichment. The insights that drive business are usually buried deep within multiple syndicated, internal, and point-of-sale data sources. Innovation is uniting these disparate sources into a single customer view. Establishing a deeper customer profile will inform your marketing intelligence and get to the nirvana of knowing truly who your customer is, what they want, what their problems are and how to overcome any objections.
The obvious benefits of this include much improved customer service levels, better customer retention, higher conversion rates all round and hopefully an improved overall customer lifetime value. A single customer view also means being able to use the huge amount of data being pulled in from all these crazy, seperate channels into one place, and being able to use that data in a real and meaningful way. By building a fuller, personalized picture of the customer and their zig-zaggy journeys, a business will have a more insightful guide to improving future sales and make improvements to future customer interactions.
Action - 4 steps
Once you have mined your precious and shiny insights from the crude and sludgy data pool you need to turn them into actions. Often this is the hardest part of the process. If a business considers consumer insights an important way to create value, then its top leaders must make that priority known to the wider business. If a marketing plan is not based on insights from customers then it really shouldn't see light of day. So...
- Be ready for pace. You need to couple insights to speed. Get the production line of churning out insights into top gear, but most importantly it's acting on those findings at pace. 'Act like a start-up' is an oft used but useful phrase. If you ditch complacence, preconceptions and the established conventions of the past you'll be far more agile here. Do not let perfect get in the way of good enough. Data doesn't often benefit from maturing like a fine wine or cheese, it needs to be consumed fresh to get the most from it.
- An Insights-led culture. Let insights tell you if you're right or wrong. Make decisions that are held to account by data that either supports or undermines your theories and actions. Especially important if you are unable to establish or work within a testing culture.
- A Testing culture. In addition to the foundation of an Insight-led culture innovative companies tend to have also adopted a strong testing culture and are willing to go out to market quickly to test the emerging hypothesis. A good example being a web Conversion Rate Optimization road map that is always fed by a decent flow of new and evolving data insights. Take your ideas and test them against real people. Continuously.
- Open your mind and don't ignore the data. It's amazing how many marketeers ignore what the data is saying to them because it doesn't support their world view or back-up their existing marketing agenda perhaps already in play. Part of data alchemy is allowing your mind and perceptions to be utterly open to new ideas. Let the data take you in a new direction if necessary but never get lost in it and get data paralysis (see Targeting above).
As time rolls on the biggest companies in the world are no longer those pulling vast quantities of oil from the ground but those creating vast repositories of data and actually utilizing it. But perhaps the biggest change people are going to notice is that data, and specifically joined up and intelligent data is no longer the arena of these huge corporations with large amounts of resources. Exploiting your data is perhaps no longer a commercial advantage but a necessity and it doesn't ever have to be a dark art.
