As businesses increasingly rely on digital customer engagement, the importance of data in marketing cannot be overstated. Marketing analytics now influence over half of marketing decisions, although this is not without its challenges. Marketers face many hurdles including data quality issues, cognitive biases, rapidly changing data privacy and compliance regulations, and the sheer volume of data points that businesses must sift through to drive meaningful customer interactions.
Despite these obstacles, the potential of data to unlock valuable insights and drive effective engagement remains unparalleled. The ability to harness and analyze data effectively will continue to set successful marketers apart from competitors. It’s essential to approach data challenges with a nuanced understanding and a strategic mindset. As H.L. Mencken wisely said, “For every complex problem, there’s a solution that is clear, simple, and wrong.”
Data Challenges of the Modern Marketer: Table of Contents
The Challenge: Identifying Meaningful Information & Navigating Complexity
In the era of big data, modern marketers are inundated with vast amounts of information. Combing through this data to identify the most meaningful insights can be a daunting task, but it is essential for driving effective personalization. By working backwards from specific use cases and goals, marketers can pinpoint the data that truly matters and close data capture gaps.
Furthermore, the modern marketer also faces immense pressure to become an expert in all things data, while maintaining subject expertise across an ever-increasing number of channels and marketing strategies. To be successful, marketers must build strong relationships with IT and understand technical concepts such as cookie syncing, paid media targeting, the creation and management of a single customer view, data governance, and more. The complexity of these tasks can be overwhelming, and there is often external pressure from other business units to make sense of the data.
So how can marketers thrive in an increasingly demanding and complex environment? We recommend focusing efforts on the following:
Gain a Deep Understanding of Customer Intent Signals
Identify intent signals that indicate a customer’s readiness to engage or make a purchase. These signals can be derived from various actions, such as website visits, content downloads, form fills, adding items to a cart, or social media interactions. We recommend parlaying a deep understanding of these signals into marketing activation and tailored messaging to align with the user’s current stage in the buying journey.
Be Thoughtful About First-Party Data Collection
First-party data is a goldmine for accurate insights, and an opportunity for marketing and customer experience (CX) teams to capture the most impactful information to drive personalized engagement. Take inventory of the data captured across owned channels (web, mobile, etc.) and incentivize customers to provide additional information on their buying cycle stage, industry, product interests, and other relevant details to drive appropriate engagement, prospect assignment, and lead scoring.
Address Data Blind-Spots
Many businesses face scenarios where they lack visibility into critical aspects of their operations. For example, manufacturers may not know who their end purchasers are. Lean into first party data strategies and build creative solutions, such as warranty collection or leveraging IoT and connected devices, to help bridge these gaps. By understanding end customers and product usage, businesses can gain valuable insights to inform their engagement strategies.
Build a Data Foundation
Establishing a core set of reliable data is crucial for driving marketing ROI. This information should be accurate, consistent, and accessible to marketers across brands and channels. A strong data foundation enables better decision-making and more effective personalization strategies. We believe that Customer Data Platforms (CDPs) are the best tools to support a consumable marketing data foundation, as they centralize audience building and omnichannel activation with a trustable single customer view (SCV). Businesses who have not invested in a CDP may struggle to manage campaign lists across disparate channels and stitch together a holistic view of the customer journey. We also recognize that many businesses operate effectively by leveraging an enterprise data warehouse (EDW), analytics platform, or other solutions as their source of truth for marketing consumption.
Understand Paid Channel Usage
Paid media and social platforms, such as Google and Meta, are fantastic for creating top of funnel awareness and engaging with new customers. However, they can quickly drain your marketing budget if you aren’t careful. These channels are often referred to as “walled gardens” because they limit the ability to pull known customer information and engagement into a central data store, which presents a unique challenge for first-party activation. We recommend taking a holistic look at paid and owned channel engagement strategy within the broader customer journey, and investing time upfront to ensure appropriate attribution frameworks are in place to maximize return on ad spend (ROAS).
Leverage The Pareto Principle
Commonly referred to as the “80/20 Rule,” the Pareto Principle is a valuable framework for avoiding distractions while becoming a data-driven marketer. By applying this principle, marketers should expect that 80% of the value comes from only 20% of the data. Therefore, data-driven initiatives should begin by focusing on critical customer attributes such as contact information, demographics, purchase, and engagement data. Deeper datasets that have usage restrictions (legal/compliance), require significant analysis or standardization (e.g., IoT device usage), or have unclear immediate value should be deprioritized.
The Challenge: Compliant & Transparent Personalization
Customer expectations continue to change, and customer expect marketing engagement to be relevant, timely, and personalized. However, customers also expect businesses to respect their privacy and preferences. As individuals become more vigilant about their information, marketers must strike a balance between delivering tailored customer experiences and being transparent about data collection and utilization. This transparency builds trust and ensures that customers feel valued and respected.
Legal compliance extends beyond respecting customer contact preferences and consent. Regulations such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) have set the standard for data privacy, giving customers more control over how their data is used by businesses. We anticipate more regulations will follow. Companies must also be prepared to process Data Subject Access Requests (DSARs), and marketing is only one part of that equation.
If personalized engagement is critical to meeting your marketing goals, how can you succeed in a challenging regulatory environment? We recommend the following:
Centralize Customer Consent & Communication Preferences
Customer communication preferences can vary by channel and brand, and making sense of a potentially large number of consent and preferences across capture points can be challenging. We recommend centralizing consent management through a dedicated solution that integrates with all marketing channels, such as OneTrust. This ensures that customer preferences are accurately recorded and consistently applied across all touchpoints. This approach not only reduces errors and ensures compliance but also builds trust by respecting customer desires.
Foster Trust Through Transparency
Customers want to do business with companies they trust. To build and maintain this trust, businesses must be transparent about how they capture and use customer data. They should make it easy and clear for customers to opt out of communications, manage web and mobile tracking preferences, and more. By prioritizing transparency and user control, companies can foster stronger relationships, enhance customer loyalty, and reduce frustration.
Understand Data Usage Restrictions
Before launching their next major campaign or personalization effort, marketers must understand industry-specific (e.g., HIPAA, RESPA), geography-specific (e.g., GDPR, CCPA), and other data usage restrictions. Companies operating through B2B models may also face additional challenges due to contract terms that could differ significantly across accounts. We recommend marketers partner with their legal teams, providing a detailed overview of their goals and sufficient information on how a proposed solution works and remains compliant. It’s also important to recognize that legal teams are typically not experts in marketing and customer data management. To be successful, marketers must educate their legal counterparts and involve them in their process early.
Build the Solution of the Future
Data privacy and compliance regulations will continue to evolve. When determining how to meet current regulatory requirements, we recommend erring on the side of caution. Adopting a conservative approach will help prevent the accumulation of potential technical debt and the need to rework solutions to comply with future, more stringent requirements.
Conclusion
In today’s marketing landscape, the ability to effectively harness and analyze data is required to be successful. Marketers face numerous challenges, and focusing on strategies to navigate these complexities is essential for delivering true data-driven engagement and compliant personalization. We recommend gaining a deep understanding of the most impactful customer data to drive personalization. This can be achieved by building a first party data foundation and having a deep understanding of available information and engagement across paid and owned channels. Additionally, build trust with customers by being transparent about data utilization and adopting a conservative approach to complying with data privacy and compliance regulations.
If you would like to learn more about how to best approach your next data driven marketing initiative, contact us today.
