In an increasingly customer-centric world, having the ability to capture and analyse insights about customers is absolutely critical.
This makes the way that organisations approach, handle and integrate customer data increasingly crucial to business success, and particularly marketing success.
‘The Customer Data Imperative’, a new report by Econsultancy produced in partnership with SAP Customer Experience, explores the importance of harnessing customer data to underpin the customer experience and ensure commercial success. In particular, the report identifies and highlights the behaviour of customer data ‘leaders’, defined by the ability to successfully integrate different sources of customer data, and execute marketing activities based on these insights.
How do the behaviours of customer data ‘leaders’ differ from their mainstream counterparts – and what can we learn from it? Here are some insights from the report.
How customer data leaders treat the marketing function
In order to be a source of competitive advantage, improved customer experience, and more effective targeting, customer data needs to be turned into insights and action.
While various different functions of a business are customer-facing and have some responsibility for customer data, ‘The Customer Data Imperative’ found that successful companies are those which give the marketing department responsibility for the customer.
Econsultancy’s research found that companies defined as customer data leaders are six times more likely than their mainstream counterparts to strongly agree that the marketing function within their business ‘owns’ the customer, with two-thirds (66%) of leaders strongly agreeing with this statement compared to one tenth (11%) of mainstream businesses.
As the report author writes, “This … shows clearly that allocation of the responsibility for data is an important success factor when it comes to understanding customers and delivering them with the right experience at the right time.”
The report goes on to state that it is becoming increasingly important for marketers to expand their areas of expertise, and exert more influence over parts of the in-company ‘data sphere’, in order to ensure genuine visibility over customer-related data and insights.
“Where leaders stand out from the pack,” the author writes, “is in marketing-led responsibility not just for customer data and insight, but in making sure the foundations are there to ensure the quality of information sources and the insight extracted from them.”
To that end, customer data leaders are significantly more likely to give their marketing departments primary responsibility for marketing logic and intelligence (48% of leaders versus 38% of mainstream companies), and also for infrastructure – identity management, authentication and security. 29% of leaders reported giving the marketing function primary responsibility for infrastructure, versus 11% of their mainstream counterparts.
Architecture (e.g. taxonomy, schemas, and metadata) is another area that leading companies are more likely to bestow upon marketing, with 27% giving marketers primary responsibility for architecture, versus 14% of mainstream companies.
The culture of customer data leaders
How does the culture around customer data in leading companies differ from that of mainstream companies? The report by Econsultancy and SAP found that leaders are more likely to see co-operation between their marketing and IT departments, promote an integrated approach to customer data, and to democratise data in such a way that it is accessible to non-specialists – not just analysts and data scientists.
Three-quarters (75%) of customer data leaders described the level of co-operation between their marketing and IT functions as “excellent”, compared to only 16% of mainstream companies. Leading companies are also far more likely to have excellent co-operation between their marketing and back-end operations – reported by 68% of leaders, versus just 12% of mainstream businesses.
Too many companies have historically been focused on shiny front-end digital projects without paying enough attention to the back-end connections which are necessary to underpin seamless customer experiences.” – Report author
Moreover, the democratisation of data throughout an organisation is a demonstrably important component of creating a company that leads on customer data. Just over three-quarters (76%) of leaders strongly agreed with the statement that “Our company culture is conducive to an integrated approach to customer data” – and none disagreed (22% agreed somewhat, while 2% neither agreed nor disagreed).
This stands in stark contrast to the equivalent response by mainstream companies, just 9% of whom strongly agreed with this statement, while two-fifths (41%) either strongly or somewhat disagreed.
Leading companies are also six times more likely to have created a culture in which non-specialists can gather and analyse customer data without requiring outside help.
60% of marketers from leading companies strongly agreed that this was the case within their organisation (with none strongly disagreeing, and only 6% somewhat disagreeing) compared with 10% of marketers from mainstream companies. A fifth of mainstream respondents (21%) strongly disagreed that their customer data was accessible to non-specialists, and a further fifth (21%) somewhat disagreed.
In other words, although marketers may ‘own’ customer data in terms of curating and being responsible for it, giving sole access to the marketing department is not the way to go. In order for cross-departmental initiatives and collaborations that involve customer data to be a success, data should be something that every function can tap into.
Elaine Roberts, CMO at Lloyd’s Register, explained to Econsultancy’s research team how businesses can address people-related challenges around internal data collaboration. “When selling a new service many of our salespeople want a brochure to take in to customers rather than using data to target the client,” she said. “Cultural issues are the main challenges. You’re asking people to collect data and they haven’t had to do it before. But this isn’t really a data question, it’s about change. How do you bring people along with you on the journey?”
Roberts believes that marketers should champion data within their organisation in order to help other parts of the business get on board with using customer data to achieve their objectives.
“I’ve always tried to partner very closely with the CIO and talk about what they can do and what I want to achieve. There’s a meeting of minds around standardization. If you are someone that champions data, people will find their way to you.”
How data leaders approach technology
Technical limitations can often prove a significant obstacle to bringing together insights around customer data. As Econsultancy’s report author writes, “Marketers have long bemoaned difficulty in getting the different applications within their technology stack to work together smoothly, allowing them to fully leverage the data their various marketing activities produce.”
Unsurprisingly, organisations who are leaders in customer data far outstrip their mainstream counterparts in technology spend, software integration, and infrastructure. For starters, close to three-quarters (72%) of leading companies strongly agree that “Our marketing and commerce software is integrated”, with just 2% disagreeing somewhat. Meanwhile, less than a tenth (8%) of mainstream companies were in strong agreement with this statement, with 20% strongly disagreeing.
More than two-thirds (67%) of marketing leaders also strongly agree with the statement, “We spend enough on marketing technology to deliver against our marketing objectives” (with just 1% somewhat disagreeing, and none strongly disagreeing) – in contrast to just 6% of mainstream respondents. 19% of marketers from mainstream organisations strongly disagree that their organisations spend enough money on technology for their marketing function to deliver on objectives.
Finally, 63% of respondents from leading companies strongly agreed that, “Our martech infrastructure facilitates a 360-degree view of the customer” – and none disagreed at all. By contrast, only 7% of respondents from mainstream companies strongly agreed with this statement, and a full third (34%) strongly disagreed.
While attaining a 360-degree customer view is not the be-all and end-all of marketing, the difference is striking. And these responses only relate to whether companies’ tech infrastructure can facilitate a 360-degree customer view – not deliver one.
Leading companies were also significantly less likely to cite disparate technology platforms as a main challenge that they face when trying to integrate and activate customer data. One third (33%) of respondents from leading companies still cite disparate technology platforms as a top three challenge – but this is far below the nearly half (48%) of mainstream companies who say the same.
What can we learn from customer data leaders?
Not every company is going to become a customer data leader overnight, and there are obstacles that stand in the way of companies improving their approach to customer data.
Nevertheless, The Customer Data Imperative report highlights a number of areas in which companies who want to improve their track record can focus their attention:
- Entrusting the marketing function with ownership of customer data – and possibly other elements of the company ‘data sphere’, such as infrastructure and architecture
- Encouraging and facilitating communication between departments such as marketing and IT, and marketing and back-end operations
- Democratising access to customer data and making sure that data is accessible to non-specialists as well as specialists
- Investing in marketing technology, integrating marketing and commerce software, and ensuring that the company’s tech infrastructure facilitates a 360-degree customer view.
Download The Customer Data Imperative report in full to get access to even more stats, insights and takeaways about customer data.