The business of marketing, and the marketing of business, is undergoing significant change – more so in the “New Normal.” Stakeholder expectations have been reset, new-age technologies are leading digital transformation, and businesses are trying to lead with “purpose” to create a more human brand.
Against this backdrop, will marketing undergo a paradigm shift in the future? How far will digital transformation impact the new age of marketing? Importantly, what will be the role of data analytics in creating insights and shaping marketing decisions? And what could be the probable pitfalls along this journey?
Data-driven marketing – the challenges and the remedy
Data-driven marketers are outperforming competitors on key metrics such as brand awareness, customer satisfaction and retention, and conversion rates. Taking a data-driven approach to marketing allows marketers to make more informed decisions, with two out of three marketers agreeing it is preferable to make decisions based on data than simply on instinct.
Yet, marketing teams are struggling to use data effectively to drive marketing decisions and actions. For example, less than 25% of companies have developed data-driven cultures within their organizations. At a sectoral level like the automotive and utilities industries, the number drops further. Siloed data sources, investment challenges, and traditional mindsets that deter commitment at the organization level are some other concerns in building a data-centric approach in business.
For marketing to derive the full benefits of data-driven insights, it’s critical to take a robust approach to the discipline. Data mastery – meaning extracting insights from deep data analysis to shape marketing decisions and customer activation – will be key to marketing in the future. Other steps include investments in AI technologies, as well as in talent and skills to create actionable and real-time insights.
A starting point could be building a framework for collecting customer data to enable a single view of the customer. For example, to better serve its 80 million guests, Airbnb restructured much of its processes by gathering key insights from data to assess its best and worst performances geographically; analyse the back data for recommendations; and upscale the level of service. The result? It generated $5.9 billion in revenue in 2021, a 73% year-on-year increase.
Real-time data is starting to be another key enabler for marketers to deliver personalized content and responses. This helps understand how customers interact with brands and when and where to engage with them. Zappos, the US online shoe and clothing retailer, sends an e-mail response to customers immediately after product delivery, with an image of the items delivered and a short quiz inviting feedback. It also has a dedicated space on its website for agents to share their customer stories.
With the subscription economy set to grow to $1.5 trillion by 2025, business strategy, organization culture, processes, product, and people are all being driven by a strong foundation of data management and insights. Take the example of Netflix, a pioneer of subscription-based content; if a customer logs in late night, the platform recommends the shows they have already watched or those of shorter duration instead of longer ones. This data-based subscription model saves Netflix over $1 billion per year.
Unfortunately, few marketers can act this quickly. Per a CMO Council study, only 7% of respondents said they were able to deliver real-time, data-driven experiences across physical and digital touchpoints regularly. Many marketers struggle with the volume of real-time insights they access. Only a minority react to online customer interactions immediately – 43% in the pre-purchase stage, 38% during purchase, and just 35% post purchase.
A new trend in data-driven marketing has been the emergence of ‘zero-party’ data as a tool to understand the customer better. Zero-party data is collected when customers agree to share data with a brand to allow a deeper and more meaningful experience. As third-party cookies are gradually phased out, zero-party data has assumed increased significance as a marketing tool.
To connect with a new customer group of younger customers interested in “meme stocks” (i.e., investing based on what they hear on social media), Fidelity Investments started an “Ask me Anything” forum on Reddit for the purpose of collecting insightful data directly from this younger customer base for their campaigns. Needless to say, it’s taken off really well.
With the rise of e-commerce and social media, social-driven growth will be increasingly important to reach customers. The onus is clearly on marketers to use data gathered across customer touchpoints to analyse how customers interact with brands. And marketers can anticipate high revenue from social commerce, an e-commerce subset that involves selling products directly on social platforms.
The future of business … led by data
We are looking at an age where marketing executives will need to have a clear vision in their marketing strategy and build a framework-driven data-collection process. New modes of interaction have emphasized real-time data as the marketer’s biggest asset. Indeed, the profile of the marketing function has evolved over time, and will evolve further, to drive business.
The marketers of today are more purpose-led, more data-driven, and more human-centred and collaborative. The past two years have brought significant change – and opportunities – in how customers approach brands and what they expect. It’s left to marketers to harness this data and shape deeper engagement with customers to deliver a superior experience and in ensuring loyalty and brand building.
Welcome to the new age of marketing … led by data!