Goodbye, Wild West. Hello, New Data Strategy
Consumer experience is paramount to profit margins and brand perception, and delivering brand experiences can be significantly enriched through a new data strategy. Data allows for personalized experiences, more relevant and timely offers, driving loyalty, retention, and lifetime value. But now, marketers are faced with doing more with less.
It’s time to reframe how we think about data volume in order to see the opportunities ahead.
The 2022 industry narrative over-emphasized the demise of third-party cookies. While this is true, the opportunity for marketers lies within a healthier mix of data and a new data strategy.
We are witnessing the end of the ‘wild west’ of data collection. In its place, a new paradigm of responsible data practices and increased data dignity is emerging. Now marketing communication and controls need to adapt in response. Brands are collecting data that is relevant, timely, and much closer to the customer. Global data regulations have also caught up with rising consumer awareness of how their data is used and sometimes misused by bad actors.
While many brands see the new data paradigm as something to rally against or covertly manipulate, most see the inherent opportunities — opportunities that can create greater customer loyalty and, importantly, higher long-term revenue. Here’s how marketers are adapting their data strategy to the new frontier.
They know data doesn’t tell the whole story
Marketing leaders must reset expectations that data collection alone means they know the customer. Instead, having access to consumer data means that brands can use it to understand their customers better. Moreover, they should use data to understand why customers make their choices and find meaningful motivators that build strong connections with those customers.
A brand’s reward for building these strong connections with its audience is higher customer lifetime value. Shoppers who have purchased over six times are 170% more likely to keep buying from a brand. Finding meaningful motivators starts a virtuous cycle of customer loyalty and data sharing that benefits both the consumer and the brand.
They invest in continuous customer experience
To deliver valuable and relevant customer journeys, brands must develop the user experience from a holistic perspective. Research shows that brands collect feedback and data with an average of 5.5 different tools. However, only a few businesses are investing in solutions to aggregate the data, making it significantly less useful and more challenging to transform into insights.
Without a coordinated approach to the customer journey, larger organizations often find different departments operating on different CRM systems. As a result, customer information is siloed, and all departments are working with incomplete data.
The key challenge is to connect the dots — or data points. By working to centralize everything into an overarching data strategy with a unified view, brands can achieve better identity resolution, content optimization, and more relevant customer journeys.
They leverage authenticity to catalyze growth
Data privacy regulations have long been seen as a restriction to bypass rather than a strategic differentiator and opportunity. Unfortunately, this attitude has resulted in purposely hard-to-read privacy policies filled with jargon, pushing customers away from talking about privacy.
Not talking about privacy in a way customers can understand is detrimental to business growth. But, again, this comes back to developing an authentic two-way dialogue with customers. Companies that earn trust with customers drive revenue-generating loyalty behaviors like retention and advocacy. In addition, greater brand trust is correlated with increased growth potential.
Consumers will reward brands with responsible data practices with 23% more purchase intent. It’s clear that as consumers become more privacy-conscious, how companies handle and communicate privacy can increasingly become a competitive advantage. In addition, fostering trust through transparent communication can lead to increased growth.
They cultivate an open, two-way dialogue
So, how do brands build that atmosphere of trust throughout the customer journey? Customers are more likely to trust a company that only asks for information relevant to its products or limits the amount of personal information requested. This behavior communicates a thoughtful approach to data collection.
The key message here is: don’t trick customers into sharing personal information; ask for it transparently. Most consumers can see the benefits of sharing data with businesses. The growing trend is that customers are more selective with the brands that deserve to know them intimately. Brands that are clear and vocal about what they’d like to know and how they will use it to benefit the customer are seeing higher levels of trust. And higher levels of trust lead to higher levels of growth.
They put trust at the heart of everything
Forty percent of consumers have stopped buying from a brand they love because they didn’t trust the company that owned it. Once, customers just needed to trust that a brand would deliver on its product or service promise. There is much more at stake now for the customer and the brand.
Trust is the foundation brands must use to build long-lasting relationships with customers. Just like a newly dating couple figuring each other out. Brands that don’t address this new set of challenges with a strong data strategy will fall foul of incoming regulations and customers.
Conversely, approaching marketing with honesty, transparency, and authenticity will yield ever-greater rewards.
Jonathan Joseph is the Head of Solutions and Marketing at Ketch.
