The innovative use of data and technology will define your future or undoing. A strong statement, but one that is necessary if we are going to challenge our industry, brands and ourselves to become data-driven, not just in theory but in practice. So, what does that mean and how do we get there?
In my last piece, Be Data-Driven or Be Displaced, I talked about companies who see themselves beyond what they sell and see themselves as data-driven customer problem solvers - companies like Chime, Allbirds and Airbnb. They are making strategic decisions to focus on direct relationships with people in order to learn about their needs and buying habits at a faster rate than their competitors. While they are leveraging technology, the true star of the show is data. Their data-driven focus allows them to consistently optimize against their customers’ needs and grow their business.
Then the question really is – how do you use your data to transform your business, disrupt your own category and start to see your brand beyond what it sells?
Three principles of being data-driven
Principle #1: Create
- An Enterprise Data Strategy. Creating your data strategy is the first step. It is impossible to transform your organization into a data-driven business without a strategy, plan and roadmap. My tip: The best companies in the world ask people for their data, but they don’t do it all at once. Creating a value exchange between people and your brand will give you direct, consent-based insights and is fundamental to your success.
- A Data-Driven Organization. A mindset shift is key. I have heard directly from Billy Beane, GM of the Oakland A’s and the inspiration behind Michael Lewis’ book Moneyball: The Art of Winning an Unfair Game, that, “You can’t choose to the listen to the data only when it supports your argument.” The hardest part: Cultural shifts regarding the use of data must occur.
- Your Identity Graph: Connecting your customer data in an identity graph that is unique to your brand is paramount. Synchronize identity data that is used across your enterprise, synthesize and analyze every customer transaction no matter where it happens. To understand people, you must first recognize them. My tip: Partnering with external companies that specialize in the creation of identity solutions is paramount.
Principle #2: Connect
- Across the company to drive insights and accountability. Get data in the hands of the people that can use it to transform your business: the product teams, the support teams, the delivery teams, and yes, the executives, so that they, too, can become data-driven. Business management thought leader Peter Drucker said, “Culture eats strategy for breakfast.” My tip: In today’s business environment, a data-driven culture eats a technology strategy any day.
- Rich third-party and second-party data to your first-party data. There is a significant amount of data available for purchase or trade that helps create insights about your customers. Start at the core with demographics and psychographics, then layer in behavioral, preference and consumption insights. Connecting your data with strategic partners to maximize the outcomes of your business is a key competitive differentiator going forward. My tip: A neutral 3rd party to facility the exchange and manage the privacy aspects is key.
- Your martech and adtech. The best companies in the world have invested millions in their marketing technology stacks and have spent as much or more in the advertising ecosystem. Connecting the two puts more data in your hands and provides greater control of how and where your media dollars are spent. Once of the biggest cost savings from being data-driven is connecting all your addressable marketing audiences and insights. My tip: There is no silver bullet here, this will take time and partnerships across your teams, your agency and solution providers.
Principle #3: Activate
- At every consumer touchpoint to enhance the customer experience. Forming relationships and meaningful value exchanges with people requires data. Any permissible data you can use to help people save time, money or delight them with new insights or suggest new content/products/services is almost always looked favorably upon by your customers. My tip: Be a data-driven customer problem solver!
- Your data across all paid media to optimize spend and increase performance. Some of the biggest ROI you can achieve is applying your first-party data to your paid media activities. You can expect to see improvements of 20 to 30% in your marketing efficiency and cost management when taking a people-based marketing approach. This minimizes the need to buy anonymous audiences that are reliant on cookie pools and are often a hotbed of bots. My tip: Suppressing existing customers is the best first step.
- The Insights collected via owned, earned and paid back into your audience models. Most of the insights gained by the interactions your brand has with people are tied up in data and technology silos or your account of record systems. Bringing your insights back into your owned platforms provides a rich set of data that historically was not available to your brand. My tip: Updating your audiences and models is critical as you learn more about the needs of your best customers.
Being data-driven ensures your business can achieve sustainable growth and competitively differentiate itself. Focusing on these three principles will help you get there.
What about data privacy and regulation?
It goes without saying, you should ensure that whatever you do with data is ethical. There are FAIR data standards and regulations – FCRA, HIPAA, COPPA, GDPR and CPRA – that exist to ensure there is a balanced use of data and an equitable exchange between your business and the people you serve. The bottom line is you should be responsible, fair and transparent not just because you have to, but because it is the right thing to do.
- Make the ethical use of data part of your core values. Data comes with liabilities and responsibilities. Make sure that if you are collecting data, it is data that will be valuable to your business and the consumers you serve.
- Provide customers with transparency and choice. You are building relationships with your customers and that relationship must start with a foundation of trust. Be clear and upfront about what data you are collecting and how you will use it.
- Remember the value exchange. Both for people and your brand. People are willing to share their data if in return they get things like convenience, time savings, money savings and entertainment. If they see value. If you’re listening to and guided by people, your business will grow.
The journey is not best taken alone, finding partners who can help make your data-driven dreams a reality is the fastest path.
At Acxiom, we are actively using these principles to help some of the largest companies across the globe continuously transform their businesses and their marketing practices. We are partnering across their organizations – executive teams, IT teams, product teams, marketing teams – to create, acquire and activate data-driven solutions.
One question I often get is: Does this strategy still apply if you don’t have direct to consumer relationships? Absolutely! Every company must be data-driven and people focused to succeed and survive. This is hard stuff, and no one gets a pass.
I’d love to hear your thoughts on what it means to your company to be data-driven. Share your comments below and don’t forget to engage with Acxiom on any of our social channels or visit our site for more resources and insights.