How Sharp Is Your Customer Data? Marketers Need to Get Smarter.
From delivering on the promise of people-based marketing to leading the customer-centric enterprise, today’s marketers look to do more than just advertise products. They’re working to deeply engage their customers as individuals. That’s no easy task under any circumstance, especially as GDPR has gone into effect — but a major, preventable oversight makes this goal immensely harder to reach. B2C marketers persistently fail to address the fact that people change.
Keeping up with the Joneses
The culprit is out-of-date CRM data. Customers — like all people — undergo changes big and small, from switching jobs, to having children, to joining new social media platforms. But rather than keeping up with the change, marketers are often strapped with data that’s mired in the past. Marketers want to engage each customer in an evolving discussion, but the old data keeps them stuck rehashing conversations that are out of date and out of touch.
Some Data Providers Feed the Problem
Consider this Deloitte survey from 2017. An analytics team at Deloitte asked 107 participants to review their data profiles created by “a leading consumer data broker,” and to rate their profiles for accuracy. More than two-thirds of respondents found their profiles only 50% correct at best; one-third found their profiles at best 25% accurate. And the most common error the survey takers cited was outdated data. One respondent said that reading the profile was like getting “a snapshot of a point in time 10 years ago.”
Many marketers will find Deloitte’s survey findings alarming. But those findings are in line with the overall state of the marketing data ecosystem. As Julie Fleischer, Neustar’s VP of Marketing Solutions, wrote, “43 percent of customer records are out of date or invalid, and 60 percent of data is incorrect within two years.” Simply put: First-party CRM data is not keeping up with customers.
Of course, there’s a lot to keep up with. In the U.S. each year, an estimated 35 million people move, 2.1 million people legally change their names, 55 million consumers switch phone carriers, and 45 million change their phone numbers. In 2017, an additional 5.5 million Americans “cut the cord” on their pay TV subscriptions, while 1.9 million Americans joined Netflix in Q4 alone. Between all the life changes, address changes, transforming media habits and more, every customer is a work in progress — and a rapidly moving target.
Privacy Concerns Complicate Pre-Existing Challenges
The challenges are only getting steeper for digital marketers. On the one hand, the ongoing data explosion means marketers have to stay on top of more customer information than ever before. On the other, ongoing privacy changes are taking what used to be readily available information off the table. Indeed, Neustar estimates that in 2000, 78% of key consumer information was publicly available in the U.S.; by 2016, that number had dropped to just 30%.
As GDPR takes hold in Europe, and data privacy issues come to the fore worldwide, the proportion of publicly available data is likely to drop even further. As a result, marketers are left struggling to keep a massively growing pool of customer data up to date — while watching the pool of readily available data shrink.
Technical issues like these are only a part of the problem. A potentially deeper challenge stems from how brands and data providers view customer data to begin with — a view that gets to the root of why so many data providers can offer old data and still thrive.
As Neustar’s Fleischer explains, many data providers “use stale data because it provides the illusion of scale.”
They’re selling their data in an ecosystem built on the premise that more data points are better. But that premise is clearly not correct: more data isn’t always better, and sometimes, old data can be more misleading than no data at all.
Customer-Centric Marketers Must Face Challenges Head On
Put differently: over the course of amassing arsenals of customer data, we’ve shifted the focus away from trying to understand the real people we market to — and are focused instead on simply gathering as much data as we can. As statistician and pollster Nate Silver might say, we’ve replaced the signal with the noise. And as a result, we’ve seriously complicated the already-staggering task of engaging customers as the evolving individuals they are.
To make people-based marketing and customer-centric businesses work, we need to shift the data focus yet again — away from numbers for numbers’ sake, and back to understanding actual people. One crucial step to making that happen is to ensure that internal teams and data providers alike are committed to boosting data quality and then taking that data and turning it into customer intelligence.
Five Steps to Turning Data into Customer Intelligence
In practice, there are five steps that need to be taken to transform first-party data into meaningful, actionable customer intelligence:
1. Reduce costs and confusion by consolidating customer intelligence to a single customer record. This will help eliminate waste, like sending multiple catalogs with different versions of the same name to the same household address.
2. Fill in gaps in the database with the most current and accurate identity data (name, address, phone number, email, etc.). Complete records are more valuable than fractional ones.
3. Enrich static, flat records with customer segmentation data like demographic, geographic, psychographic, and behavioral attributes, to improve targeting.
4. Proactively capture any changes in customer data, like changes in address, phone number or new email addresses, to ensure your view of identity is persistent and always on so you can catch them when they are in-market.
5. Connect offline identity elements to online ones in order to create a single omnichannel view of your customer. Your customers flow seamlessly between online channels and the physical world. Your marketing should recognize them wherever they are.
Dedication to building true customer intelligence means committing, too, to partnership with a vendor that can accomplish these five steps and do so in a neutral, privacy-friendly way. Brands that make this commitment are primed to achieve every marketer’s ultimate goal: to create better, more impactful customer experiences.