Vast amounts of digital data being collected on consumer behaviour is transforming the way businesses operate, as Anna Leach reports
Almost all businesses have customers. And those that care about growth want to know a lot more about the people giving them money than just their payment details.
“The goal of any business is to create and maintain their customer,” says Frank Buytendijk, a vice-president at the research firm Gartner, echoing management guru Peter Drucker.
It used to be store cards that gave companies customer data – addresses, past purchases. One problem was that you only knew it after the customer had already decided to buy something. Technology has changed all that. Now companies can have much more data on their customers and they can have it in real time. They can even have it before a purchase too.
Tom Szekeres, of This Here, a new data-focused London marketing agency, explains the potential of analytics for finding new customers. “When you’re looking to expand, it helps to think, who do we want to go after, what are they interested in? Data can tell you where there’s an opportunity,” he says.
That’s why big data is turning marketing inside out and why smart companies are making sure their marketing campaigns are founded on figures.
The internet has changed a lot of things and one is that almost everything people do online – from clicking on a link in an e-mail, to tweeting, to browsing jumpers– can be recorded. There’s no record of how long someone spends looking at the jumper section in a bricks-and-mortar shop, but there is in the online store. That’s the new customer data and there is a lot of it. It no longer stops after the customer has paid for the product.
“We have shifted from static profiles – names, personal purchase history – to a different type, a behavioural profile,” says Mr Buytendijk.
“If I buy a book from Amazon and I blog about it or put it in my stack at Goodreads [social book website] then Amazon can see not only that I bought a certain book, but also what I think about it, when I read it and ultimately how I felt about it when I’m reviewing it. Not everyone will do that, but you can create a profile of how the product is being consumed.”
Big data is turning marketing inside out and smart companies are making sure their marketing campaigns are founded on figure
It’s a no-brainer for internet companies to crunch customer data. But even more traditional companies are doing it too. Take AEG, a global sports and entertainment company that runs brands from the LA Galaxy football team to London’s O2 Arena. The company’s chief marketer Kimberley Kriss told a marketing magazine how she is building a global database so AEG can develop a deeper understanding of the people attending its events.
“We’re going to understand who our visitors are, and what their needs and preferences are,” she says. “Not only does that help us when we’re marketing a live event, but it also helps our brands and sponsors market to them too.”
Ms Kriss made sure to hire in data talent when she built the marketing team from scratch earlier this year, ditching brand managers for a head of customer relationship management and digital. “Marketers are losing their seat at the table because they’re not putting the science into what they do. There’s no rigour,” she says.
An example that inspires This Here’s Mr Szekeres and business partner Jemima Garthwaite is one of the communication success stories of the past decade: the Obama US presidential campaigns, which took a data-oriented approach to the traditional business of voter persuasion.
“You had a political class who did their homework and used tools like polling,” says Mr Szekeres. “But a lot of it was about hunches – you hoped your message resonated. However, on both Obama campaigns, they did an amazing job at speaking to very small sections of potential voters and working out what would appeal to them.
“They had myriad databases, with data about every potential voter, and an HQ that combined all this and hired data scientists to run what was essentially a massive marketing campaign.”
So if we agree customer data is important, how do you do it? You may need to bring new skills into the business, as AEG and Obama’s campaign did, but you also need to train up existing staff and that should go all the way up to the top.
“Chief executives should lead by example,” says Gartner’s Mr Buytendijk. “They should want to know what their customers are saying.” And bringing customer data analysis in-house is something most companies want to do – 64 per cent, according to a Gartner survey.
There are a lot of different ways to convert customer data into marketing campaigns, but at its simplest there is a database, where the information is stored, and a dashboard, where you can access the information and slice it in different ways. Then that needs to be understood and put into practice.
The infrastructure has become more complicated as data now streams in from different sources.
“There are so many types of data you can collect – mobile, social,” says Mr Buytendijk. “You need to have a portfolio of databases and special tools, as well as the people who can operate the stuff.”
But when those different types of data do correlate, that’s when some of the most interesting insights crop up and it can go well beyond tweaking an ad campaign. Ms Garthwaite, of This Here, concludes: “You might actually realise you can create a product that didn’t exist before, purely because you’re aware that there’s audience for it.”