Among marketers, there is widespread consensus that all marketing today should be data-driven marketing. But why and how you adopt data-driven marketing depends largely on your industry. Every sector faces unique challenges and opportunities in using data to identify, attract and engage consumers.
Take consumer packaged goods (CPG), for example, often considered the bellwether sector for all things branding, marketing and advertising. Nobody invests more in consumer research or targeted tweaks to messaging, offers and products. But in many ways this sector lags in data-driven marketing, thanks to the simple fact that it has very little first-party data (which comes from direct customer interactions) when compared to retailers and e-commerce players, banks or healthcare firms.
Knowing they need data to build more direct consumer relationships, CPGs are working to enhance existing first-party data with second-party data (through sharing relationships with retailers and other partners) and third-party data sources (such as commercially available demographic and psychographic data sets). The goal is of course to gain new insight into what consumers want and the best ways to reach them – the very essence of data-driven marketing.
CPGs are also adopting bold innovations such as smart packaging and automatic reordering, more sophisticated campaign design (e.g., immersive brand experiences) and more robust loyalty programs. The CPG sector has a long way to go, but its recognition that it needs more data and its commitment to innovation mean it will likely advance quickly.
Retailers are in the envious position of having a great deal of customer data, though a case could be made that they have too much to handle efficiently. For most retailers, the main challenge involves cross-channel complexity; that is, how can they be sure that the customer who was looking at product reviews online and who downloaded a mobile coupon is the same customer who walks in the door of the nearest store? For organizations that get it right, their data-driven marketing success can extend into high-quality purchase experiences and personalized service. The key is to get the channels synchronized so it’s clear where consumers are in their journeys to purchase or in the overall relationship lifecycle.
Healthcare marketing programs are often shaped, even constrained, by regulatory concerns. Certainly, they have a lot to think about when it comes to securing the valuable customer data they collect. But the upside of data-driven marketing is becoming clearer, even when it doesn’t look like classical marketing. In health insurance, for instance, the growing adoption of fitness trackers and other wearable technology enables real-time nudges to exercise or encouragement to eat more healthily.
Health systems also use personalized “push” communications to encourage patients (especially those who are receiving long-term treatments for complex conditions) to keep their appointments, take their medications and otherwise stick to their care plans. The goal is to prevent patients from getting sicker or missing out on procedures. Such programs may fall under the heading of “patient engagement,” but it’s data-driven marketing by another name.
Speaking of meds, pharmaceuticals have long used third-party data in the outreach to physicians. For years, they’ve relied on third-party data sets about prescribing habits to focus their field sales reps on those doctors and practices most likely to prescribe their wares. But when it comes to reaching consumers via data-driven marketing and through digital channels, pharmas are playing catch-up.
Today, they spend only 3% of their promotional spend on digital channels (according to IMS Health), even though the vast majority of consumers (72%, according to Pew Research, look online for information about healthcare and medications). There has been some progress in building branded patient communities, but again pharmas need to lay a foundation in the recognition that they are playing a new game.
Financial services is another highly regulated field with a wealth of data, but it’s safe to say that they have been a leader in data-driven marketing for many years. Banks, credit card companies, insurers and investment firms have proven adept at identifying “lookalike” customers – that is, mixing first-party data about their current customers with external third-party data to find individuals who are likely to become customers based on a range of qualifying attributes.
Still, there is plenty of room for improvement. Consider that many large banks still struggle to integrate data across all of their channels – websites, mobile apps and retail branches. Insurers may also struggle to create single unified profiles for customers who hold a life insurance policy with one division and an automotive policy with another division. Banks and other firms could also increase the sophistication of their customer segmentation and cross-selling pitches.
A cross-sector approach to improvement
Despite their considerable sector differences, all of these industries share a common goal of using data so that they can make more relevant and timely offers to people across channels – the right offer to the right person at the right time via the right channel. Making that happen typically requires setting clear and measurable goals, creating alignment across the business (which is typically necessary to break down organizational barriers that restrict data usage) and adopting new or updated technology.
Looking specifically at the data front, most marketing leaders have taken steps to understand the data they have today and which external data sets might be most useful to them. Further, they recognize that a blend of data and tools – a well-designed and effective “martech stack” – are necessary for data-driven marketing success.
The bottom line
For all the buzz about data-driven marketing today, it can mean very different things depending on the type of company that tries to adopt it. What most sectors have in common, however, is a need for a strong foundation based on efficient data capture, integration across silos and the right strategies, processes and tools to activate and actually use that data – whether to find new customers or increase engagement with existing ones.
Phil Kyle is the president and chief operating officer of Infinitive, the consultancy for the digital world. Phil has worked across multiple industries, including communications, media, financial services, and education, to help clients drive successful large-scale, complex transformation programs. Phil leverages his vast experience, strong communication and leadership skills to help enable successful outcomes for Infinitive’s clients. Connect with Phil via LinkedIn or e-mail.