One of the main goals of marketing is to relate to your audience. Without understanding who your customers are and what makes them tick, it's difficult to communicate in a way that is both effective and engaging, according to John Woodrow of RightSize, who here examines how effectively managing your data can help you to understand your customers better.
In a recent survey by B2B Marketing, 71% of marketers did not feel they were getting the most out of their data. Three specific areas of concern were highlighted: poor data accuracy, limited depth, and a lack of usability.
What do I want to know?
It is important to identify exactly what information you require to allow you to target your audience. Initially it may be easy to feel overwhelmed with the sheer volume of data, or be guided only by what is currently available. Good practice is to work out beforehand which questions you want answered and therefore what information is important. From there, you can then investigate where this information is currently captured or where it could be in the future.
Imagine a fashion retailer who wants potential customers to sign up for a newsletter. Although requesting only name and email address has the lowest barrier to sign-up, in this example it may be sensible to also request age and gender to ensure that appropriate products can be marketed to each individual.
Poor Data Accuracy
Many marketers struggle with old and incomplete customer and client data which is often held in different formats and across many systems. 70% of respondents to the B2B Marketing survey felt that lack of accuracy was the main reason for not being able to leverage their customer data effectively.
You may want to consider initiating a data cleansing project to improve the accuracy of your customer data. One option is to contact your customers asking them to provide updated contact details. However, it is typically more cost-effective to work with third party data suppliers who can match your data and refresh from their own sources.
Research indicates that approximately 30% of customer information will corrode each year if not kept up-to-date. In the main, this is due to life events such as moving home or job, a change of marital status or even moving mobile operator or email provider. This means it is not sufficient to simply cleanse the data once. Fortunately, many suppliers offer a service to provide ongoing maintenance of your data ensuring it always remains current.
As well as improving the quality of your existing data, you may benefit through the addition of further information not currently available to you.
For example, a company offering financial planning services may be interested in targeting businesses that are going through rapid expansion. In this instance it would be useful to have the last few years' worth of accounts and employee count to track growth.
There are two main challenges here; firstly to identify and source this additional information and secondly, to add it to your current information. Both of these issues are most simply resolved using data experts who can both provide the additional information and also merge it with your exist data into to a single view.
Lack of usability
A common issue is often not lack of data, but rather that the data is stored in different systems and in different formats with no easy way to collate into a single consistent view. Examples include the CRM, Finance system, spreadsheets or any IT solution that touches the customer journey. In many cases legacy systems may run in parallel with their intended replacements. The same customers may appear in multiple data sources (duplicates) and important fields may be missing.
It is not uncommon for marketers to resort to using tools such as Excel to try and piece the information together from the various sources. However, this is time-consuming and must be repeated each time the single view is required.
Fortunately there are suppliers that can connect your information together, enabling visualisation of it in a way that enables the marketer to segment and spot patterns without the need for costly and time-consuming IT integration or manual effort.
So what next?
Once you feel confident you have clean and up-to-date information in a single view, you can then start to analyse your data to understand more about your customers. This is normally achieved by uncovering the commonalities between them and thus identify patterns.
Through understanding how customers buy and use your products and services, insight can be obtained to identify up-selling and cross-selling opportunities. This insight may also uncover ways of enhancing and developing new products or services that increase your customer wallet share.
For instance, you may find that your customers are skewed toward a particular gender or age range, or typically reside in a particular part of the country. This understanding will enable you to communicate on a topic and in a language that resonates with that particular target audience.
Segmentation means organising your customers into groups of similar individuals. Using this information, a marketer can send targeted communications to a portion or 'segment' of their customer base in order to connect with them in a way that keeps them engaged and valued as a customer, thereby building loyalty. Failing to tailor communications in this way risks annoying your customers and having a negative effect on your relationship with them.
Customer profiling aims to describe typical customer personas according to data such as demographics or lifestyle habits. These personas then can be used to identify the best prospects based on certain characteristics or to improve existing services. Customer profiling will help you to understand your customers and as a result improve customer satisfaction. For example, a telecoms company may identify female teenage customers as more interested in mobile SMS bundles, whereas middle-aged male customers might be identified for cross-selling of home broadband services.
RightSize's guide to extracting value from customer data has been made available for free download - click here (email address required).