In today’s hyper-connected and increasingly data-driven world, the pursuit of a comprehensive understanding of consumers continues to be the holy grail for businesses eager to deliver exceptional customer experiences and stay ahead of the competition. The concept of a 360-degree view of consumer identities has been widely embraced as the key to unlocking insights that drive growth and loyalty. However, despite the insatiable desire for data, some marketers are realizing that an increase in data quantity does not necessarily equate to a corresponding increase in value.
The law of diminishing returns applies to data, just as it does any process or system you build to scale. A Gartner Marketing survey found that 72 percent of marketers who believe they need every customer data point to be successful also report that the more data they collect, the less benefit they see. That’s because the true value of this data lies in the interplay of internal processes, cutting-edge technologies, and the human expertise that orchestrates it all.
Simultaneously, volatile economic conditions are reshaping the marketing landscape. Marketers across nearly every industry are being asked to tighten up budgets, with more than 75 percent of CMOs facing increasing pressure to cut marketing technology spend, according to Gartner’s 2023 State of Marketing Budget and Strategy report. This new reality demands a serious reevaluation of organizational priorities and a strategic reallocation of resources.
Follow along as we delve into the innovative strategies reshaping how businesses leverage their internal data. Explore how to remedy a data overload, bridge knowledge gaps through the use of third-party data, and witness the transformation of brands into authoritative publishers of insights. By uncovering these new approaches, we aim to pave the path forward for marketers seeking to harness the full potential of their company’s data ecosystem.
Making Sense of a Data Deluge
The allure of capturing vast amounts of information for marketing purposes is undeniable; however, it comes with a caveat. Companies face the challenge of effectively sorting and analyzing this data in a way that provides adequate ROI. Some experts argue that businesses that collect every piece of information they can get ahold of run the risk of experiencing a data overload.
It’s true that collecting data without a pragmatic approach to its utilization can be counterproductive. For instance, an organization might eagerly gather information without pausing to question whether they have the means to extract meaningful value from it. The absence of a purpose-driven collection strategy leaves companies drowning in an ocean of information, yet still struggling to find actionable knowledge. To avoid falling victim to a data deluge, embracing a more calculated approach should be mission-critical for organizations across nearly all industries.
A contributing factor to poor data management is the restrictive nature of outdated technology. While marketers may successfully collect and identify clean, actionable data, they often stumble upon a roadblock when they attempt to harness its power. This roadblock materializes in the form of an aged database infrastructure that hasn’t kept pace with the rapid evolution of current marketing technology. Picture a brand new iPhone 14, but with the internal processing power of a Nokia flip phone. No matter how much potential the device has, its performance is bound to be compromised.
Similarly, we’re seeing data platforms become more and more distributed. In a distributed world, data is stored and processed across multiple nodes or servers, not to mention a variety of vendors with different standards for what they can ingest and how. The integration of third-party datasets can act as the glue to create better interoperability between platforms, propelling actionable insights to the forefront. This, combined with thoughtful and strategic collection methods, can transform the way your organization interacts with customers.
Many platforms are making these investments on behalf of their customers. For instance, consider this case study published in collaboration with Consumer Orbit, a leading aggregator of consumer behavior-based information. The key takeaway here is that even companies that specialize in consumer data and insights struggle with unification. Partnership and collaboration are critical to getting better together.
Bridging the Gaps
Even once your organization has a handle on how to best collect and govern first-party data, you’re still limited in your ability to deliver personalized marketing. While the data created and provided by your own customers provides a great foundation, you’re often starting with incomplete identities. Consumer’s lives and needs change over time – sometimes overnight. For example, a home purchase or new baby may trigger new and different purchasing needs and interests. To truly achieve personalization, you need to validate the data you already have and supplement with additional third-party data to enhance your view of a customer and their household.
According to a study by Salesforce, 66 percent of customers expect brands to understand their unique needs and expectations, and 52 percent expect all offers to be personalized. With contemporary consumers expecting personalization in nearly every interaction with a brand, having comprehensive identity data should be non-negotiable when crafting your marketing initiatives. This means always having the most complete and up-to-date picture of consumers.
Partnering with a third-party data provider or identity resolution specialist to enhance the value of your existing databases allows you to truly provide the best customer experience , leading to more conversions, better brand loyalty, and improved ROI. However, not all data providers are created equal. You need a partner with the flexibility to work with the data you already have while supplementing the missing information needed to enhance your view of the customer. It’s crucial to establish precise guidelines for the data analytics procedure and ensure that the vendor you work with can adhere to those guidelines.
For example, imagine a retailer like Best Buy which sells a wide variety of products. While they can collect customer data on their own, they’re missing out on information about what these users are doing elsewhere on the internet and in their day-to-day lives. After partnering with third-party data providers, they discovered that many of their customers are interested in outdoor activities, like kayaking. With this information, they can now make a point to advertise things like waterproof phone cases and portable GPS systems, better connecting with customers’ interests beyond just electronics. This drives higher engagement and sales while offering consumers the tailored experience they value — a win-win for everyone involved, but most importantly us as consumers – yes, we are the beneficiary when the job is done right.
Brands as Publishers
As brands step up their e-commerce capabilities, they are compiling more comprehensive, unique, and therefore valuable first-party data to action on. This data is a goldmine, making brands more than just sellers – they’re becoming publishers of valuable insights. This opens the door for other marketers to tap into these insights, marking a pivotal shift in the way businesses collaborate on and leverage data.
A great example of a brand doing this right is The Big Ten Conference, an association of universities that share a common mission of prioritizing academics in the lives of college athletes. The Conference is undergoing a digital transformation to enable a better experience on and off the playing field for sports fans. Its recent partnership announcement with Boost, a sports technology and analytics company, illustrates a brand innovating to sustain and scale its legacy through dynamic storytelling and one-of-a-kind content paired with a direct-to-consumer experience. This partnership allows the brand to latch onto insights they otherwise wouldn’t be able to leverage, providing a better experience in the short term and endless opportunities in the long term to surprise and delight sports fans.
This example mirrors a larger trend: brands are redefining their roles and better understanding the economic benefit of data accumulation. Identifying and investing in strategic partnerships rooted in actionable data and a modern technology stack can generate significant value and keep your organization ahead of the curve.
Bottom Line
Data accumulation is not just about quantity, but about purposeful collection, strategic integration, and collaborative partnerships. Brands that embrace this mindset will navigate a new era of data-driven customer experiences more effectively, propelling their success.
The allure of stockpiling data is strong, but it comes with challenges. As we stand at the crossroads of digital transformation, the choice to invest in data-driven enterprises becomes a foundational step in navigating the present market dynamic. These initiatives are a strategic driver of growth for not only individual businesses- but the economy as a whole.
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ABOUT THE AUTHOR
Zora Senat , Chief Commercial Officer, Verisk Marketing Solutions
Zora Senat serves as Verisk Marketing Solutions’ Chief Commercial Officer overseeing sales, marketing, and customer success operations. She joined Verisk in 2022 following its acquisition of Chicago-based Infutor Data Solutions where she served as Chief Marketing Officer and Vice President of Strategic Partnerships. Prior to Infutor, Zora served as President at Exact Data where she specialized in operational excellence, sales, and marketing strategy.