Our recent study shows that activating data is crucial to successful artificial intelligence (AI). However, 92% of the companies we surveyed said that they struggle with one or more of either data access, unification or analysis that prevents them from making better use of their customer data (see figure 1).
Old news to you? Perhaps, but the ever-increasing importance of data in marketing will ensure that those who cannot harness their data are going to be left behind. The problem becomes clearer when we drill down into each of these areas to better understand the situation and look for potential solutions.
Figure 1: Top challenges faced by marketers
Data access is the first and most fundamental step to working with data. It gives marketers the ability to use data from multiple sources in near real-time. Today’s marketers need quick access to data stored or generated from multiple systems both inside and outside their organizations. Here are some examples:
- Customer record data from the CRM system
- Purchase data from e-commerce and traditional point of sale systems
- Campaign response history from the marketing system
- Customer service data from the support system
- Visitor and browsing data from the website
- Ad clicks from advertising networks and social media networks
- Social media activity and interactions from those systems
With so many sources of data, it’s not surprising that 46% of all marketers consider data access one of their top challenges. Besides the numerous sources of data, two other factors impede data access:
- Systems that are monolithic and focused on specific tasks but not designed for easy data access. Legacy systems, in particular, were designed to work as fully contained units where information extraction was episodic and infrequent rather than continuous.
- Organizational processes that emphasize guarding the data and limiting access to it rather than sharing it. Usually IT departments serve as guardians and gatekeepers to data access. In our study, marketers who were given advanced access to data were 1.6x more likely to be using a majority of their customer data over those who had to go through IT to get access to this data.
All of this results in balkanized data that is hard to get to and difficult to access in real-time. Solutions such as data warehouses and data lakes were designed for a “store and analyze” approach which is ineffective in today’s real-time environment.
Data unification refers to the ability to bring together data from multiple sources and connect them together. A unified view of customer data is a good example of this because it enables marketers to better engage with customers by offering them personalized experiences on not only their profiles (gender, preferences, purchases, etc.) but also their behavior (website visits, catalog views, mobile phone activity, current geographical location and social media activity).
McKinsey & Company refer to this as a 3D-360° customer view (see Figure 2) that comprises data from many sources that get updated often and needs to be used in almost real-time to see its value. 41% of marketers in our study considered this to be one of their top challenges.
Figure 2: 3D-360° View of Customer
Analysis is perhaps the hardest of these functions so it’s probably no surprise that 54% of all respondents in our study considered this to be a top challenge. As a 20-year data-driven marketer, I attribute the data analysis challenge to three things: lack of a strategic approach to the analysis, missing data analysis skillset in many marketing teams, and deployment of the wrong technology.
It all starts with strategy. Very often marketing teams jump into data analysis expecting to dive into the data in the hopes of an answer revealing itself. And very often, such efforts take a lot of effort and don’t produce the results expected. It’s the “dumpster diving” of data analysis. Instead, it is far more effective to start with one or more hypotheses, frame the questions you want to answer and then start the analysis.
There’s no substitute for having the right people. Data-driven marketing has been the domain of a relatively small number of people and good talent is hard to find. This leads to marketing leaders confusing people who know how to create reports and run operations with those who can effectively frame the problems they are trying to solve and use analytical techniques to solve those problems
Use the appropriate technology to solve the problem rather than using the latest technology hoping to get the answers. This starts with setting up the problem correctly, identifying use cases and then using the right technology that collects and helps analyze the data.
McKinsey & Company go beyond these three general areas to identify several other more specific issues in their recent report, Ten Red Flags Signaling Your Analytics Program Will Fail.
The Way Forward
Data has been called the “fuel of the new economy.” And just like during the oil rush of the late 19th century, everyone’s drilling. Smart organizations will take a thoughtful and fresh approach to getting the most out of their customer data by:
- Opening up access to the data so marketers can utilize most of their customer data
- Providing a unified view of the data by dynamically accessing the data from multiple systems rather than trying to consolidate everything in a single system
- Analyzing the data by first developing a strategy and process for developing hypotheses and testing each hypothesis by asking the right questions.
Learn how to overcome your customer data struggles in this new independent research, “Activating Customer Data for AI-Powered Marketing”. Get your copy now.