Marketers increasingly feel pressured to look into Big Data, unified databases and developing a “360-degree view” of their customers. But faced with the enormous onslaught of questions that brings about, some observers are suggesting that marketers should reframe their goals.
“The data is ugly, overwhelming,” said Sandra Zoratti, VP-marketing at imaging and electronics company Ricoh Co. “No one knows how to tackle it and nobody wants to. Every company tells me two things: One, that they don't have the data. But everyone has the data. And two, that they're doing analytics but aren't applying them. We're data-rich but insight-poor.”
Zoratti said to avoid being overwhelmed it's best to start simply. In a previous position—as VP-global solutions marketing at InfoPrint Solutions, a joint venture between Ricoh and IBM Corp.—Zoratti worked with hotel chain Best Western International on its direct response marketing. Best Western, with more than 4,000 hotels in 80 countries, owned so much customer data that “we honestly were so overwhelmed by all the things we could do that we just had to say, "Stop,' ” she said.
In response, Zoratti's team developed a 30-day fall promotion and set it up on a mere spreadsheet. A statistical test was performed on two types of content, one set that was "dynamic" and tailored based on prospect data, with the control group receiving static content. Delivered to 100,000 recipients, the half receiving the dynamic content showed a 30% improvement in revenue, 39% uptick in the number of stays and a 500% increase in applications for a Best Western MasterCard.
"This was our first foray into data-driven marketing 101, and the results blew us away," Zoratti said. "Importantly, Big Data means taking small steps. If you don't figure out the first step, you can't figure out the journey."
“Big Data means taking small steps,” she said. “If you don't figure out the first step, you can't figure out the journey.”
Reinforcing the need for simplification is the state of marketers' data itself, according to Experian QAS' “Data Quality and Customer Experience” report issued last month. The online survey, conducted in December, polled 804 executives and managers who focus on data management.
The results: More than 90% of respondents suspected their customer and prospect data might be inaccurate, that they have duplicate data within their systems and that they've been negatively affected as a result of contact data-accuracy issues.
“The first thing that grabbed me was the percentage of our customers who knew they have data-quality issues,” said Tom Schutz, senior VP-general manager at Experian QAS. “The idea of a "360-degree view' of the customer is jargon. Big Data is a broader term, designed to dial things down and understand your constituency in a more sophisticated manner.”
Lattice Engines is a Big Data marketing company that offers a number of predictive analytics solutions. But Shashi Upadhyay, Lattice CEO, agreed that even when marketers are armed with the best technology available, the notion of a perfect, one-to-one understanding of each customer may be far-fetched.
“That's the core problem with Big Data,” Upadhyay said. “Nobody has stepped in and said, "What does a marketer actually have to do, and how do we make it easy for him?' ”
As for the 360-degree idea, Upadhyay said, “At best it's a 180-degree view of the customer; but who really needs to know everything about the customer? For example, the biggest predictor of churn is whether someone is using your product or not. If you can see who's using the product every day, you can create a nice dashboard of who's likely to churn.”
Stephen Guerra, director-vertical market at LexisNexis Group, said he thinks that the long-sought-after “complete” view of the customer is simply not obtainable.
“We have found that the more choices we give our marketing customers about accessing the 300 million contacts in our database, the less they use the system,” said Guerra, speaking at the Direct Marketing Association's Email Evolution conference in Miami Beach this month. “So we ask them to tell us big questions, or just one—such as, "Who is most likely over the next few years to switch insurance companies?'—and pose it in human language.”
Often it's the basics that matter most—and are neglected just as often, according to a study by contact list-building company NetProspex Inc. Its “B2B Marketing Data Benchmark Report” released last month, analyzed the company's customer and prospect databases containing more than 100 million contacts throughout 2012, grading such areas as record duplication, record completeness, phone connectability and email deliverability.
The assessment found that more than 50% of companies had an overall data health score below 2.7 on a 5-point scale, putting their data firmly in the category of “unreliable” or “risky.”
“The Big Data word is daunting,” Ricoh's Zoratti said. “But do we have to know all the data? No. Just start with one campaign with a single overarching goal, such as acquisition, retention or reactivation. Limit the data you have, and set up a test. Start bare-bones, and take it forward from there.”