In the ‘data economy’, business marketers and strategists increasingly rely on ‘big data’ to improve decision-making processes, better understand markets and consumer behaviour, and more accurately predict outcomes.
While political scientists ponder the meaning of last year’s unexpected outcomes, business leaders are wondering why data science didn’t pick up the winds of change in the world’s political landscape and whether this failure has implications for businesses that use data to drive their marketing strategies.
The simple – and sobering – message is that data doesn’t eliminate mistakes, entrenched biases, and poor judgment.
A global consumer study by Accenture Strategy illustrates just how easy it is for companies to stick to ostensibly ‘tried and true’ marketing tactics even as their customers drift away.
The report, Seeing beyond the loyalty illusion: It’s time you invest more wisely, gauged the attitudes of 25,426 consumers around the world about their loyalty relationship with brands and organisations. It found that while 90% of companies currently employ some form of customer engagement or loyalty program, 71% of customers claim loyalty programs did not engender loyalty, and 23% of consumers demonstrated a “negative or non-existent reaction” to loyalty programs - particularly younger consumers.
The report concluded: “Loyalty still matters. It always will. But today, as the correlation between customers’ loyalty sentiments and purchasing behaviours continues to weaken, it’s becoming clear that the old loyalty rules no longer apply”.
How can businesses be so out of touch with their customers at a time when there has never been more data available about consumers’ behaviours and attitudes?
Mark van Rijmenam, CEO of Datafloq, says the crucial point is not access to data, but rather - how that data is used.
“You can have two companies where both have access to the same data but different analyses can result in different insights and outcomes”, he says.
Van Rijmenam says the quality of data analysis – not data itself – is the key to developing a competitive advantage. He believes that as the transition to the digital economy deepens that data will become the stock-in-trade of every business, which will require a change in mindset. It’s an adjustment he believes businesses should be making now.
“We’re all data businesses. Every company should consider itself a data company – a data company that happens to create consumer products. If you have that perspective, it changes everything,” van Rijmenam says.
“We’re all data businesses. Every company should consider itself a data company – a data company that happens to create consumer products. If you have that perspective, it changes everything.”Mark van Rijmenam, Founder of Datafloq
During a recent trip to Australia, Andrew Davis, an internationally recognised thought leader in content marketing, observed that “marketers have a real problem understanding the difference between reporting on the right things and measuring the right things”.
“Marketers have this unbelievable and uncanny ability to inspire people to buy the things they sell…there are great ways to measure that. There are very simple ways, you can use things like Google Trends, which is one of my favourite tools, to actually chart and measure how a market moves; and then you can actually measure your impact on the market.”
In a data-rich environment, Davis says the ability exists to segment markets and target customers like never before, yet many companies still utilise a broad brush approach.
“In the online world, we have this belief we should target everyone, when in fact, targeting everyone reaches no one. We've really got to get past the idea that we can't target in very smart ways” he says.
“We have this unbelievable power to dive deep into an audience. I call it fractal marketing. If you take the audience you're going after and you divide and sub-divide your audience constantly, you'll find a new audience that you never knew you could address.”
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