Data offers companies an unparalleled opportunity to win more customers, but with an ever-increasing quantity of what’s trackable, how can companies use it effectively?
Data can tell you everything you need to know about your customers – and more. When the manager of a US supermarket was confronted by an angry shopper demanding to know why his teenage daughter was being targeted with sales offers typically aimed at pregnant women, he conceded he didn’t know and could only say sorry; a couple of days later, the shopper called back with an apology of his own – he’d just found out his daughter was expecting.
This true story speaks volumes about the power of the data that companies have at their disposal today. The supermarket in question automatically targeted its customer with pregnancy-related offers simply because her purchasing history suggested she was pregnant: it was a highly targeted sales offer generated by automated analytics tools.
This power has to be handled sensitively, of course, with respect to privacy. However, in an environment where almost every company, both B2C and B2B, generates at least some business digitally, those who fail to make the most of the data and analytics technologies risk being eclipsed by their competitors. Data now represents companies’ most powerful weapon in the battle for customer acquisition – and, thereafter, in the equally crucial battles for retention and share-of-wallet.
This is a remarkable transformation. Barely two decades ago, companies knew almost nothing about their potential customers. If your would-be customer left your shop or browsed your catalogue without making a purchase, you had no idea what stopped them buying – or even who they were. Today, it is possible to track the behaviour of customers using your digital channels with total precision – from where their mouse moved on the screen to the moment at which they abandoned their shopping cart – and to constantly fine-tune the response according to what works best. This precision is also increasingly available offline, for example using RFID tags to track visitors at business conferences.
However, the exponential increase in the data generated by such interactions presents problems as well as opportunities. The data may hold the secret to, say, whether it is more effective to email a customer who abandoned a purchase on your website 10 minutes or 10 hours later, but only if you have the capacity to process the information to extract this insight and the agility to act on it. And since the data flows in every minute of the day, this is a real-time challenge.
It isn’t only volume and velocity that make this difficult – the third “V” that big data enthusiasts worry about is variety. Your business may be collecting data from a slew of different sources. The information might include data from Google Analytics, intelligence from your CRM, feedback from your email campaigns and even tracking calls made to your sales team. Amalgamating that data to inform an intelligent response is no mean feat.
Sales and marketing technology, therefore, will be increasingly crucial to any organisation seeking to accelerate its customer acquisition. Businesses need technologies that reduce the need for human intervention in the analytics process; in its place, automated tools will parse all available data and many will initiate responses that the information suggests will accelerate customer acquisition at the fastest possible rate. This has led to a huge increase in the number of marketing technology tools available in recent years. In 2010, there were around 150 known tools or technologies in this space; today the number is more like 5,000, from established categories such as CRM tools to cutting edge AI-driven optimisation tools. With so many to choose from the experience of investors such as Livingbridge can be invaluable to helping assess and implement the right tool for your business.
From an investor’s point of view, there is real opportunity for companies with strong products and services that are thinking about how to put such tools to good use. Best-in-class sales and marketing tools could turbo-charge their growth.
The era of big data finally gives such companies a means with which to make much more scientific decisions about sales and marketing spend. Currently, many companies are under-spending on marketing because, in the absence of hard data about the true source and lifetime value of their customers, they’ve taken a conservative view about what resources to allocate to customer acquisition. Armed with better data, however, it is possible to shift from cautious to calculated. By justifying spending today through accelerated acquisition that creates long-term value, the marketing function will increasingly be regarded as an important profit centre for successful businesses, rather than as a source of cost.
This isn’t to suggest the transition to being data-driven will take place overnight. Many businesses will make this shift incrementally, learning by trial and error what works best for their particular market and operating model.
Nevertheless, the potential could hardly be greater. The better companies know their customers, the better they can serve them. Automating the process will enable them to reap the benefits of big data at scale.
Our in-house customer acquisition team are on hand to help management teams unlock value from sales and marketing. Click here to find out more about how we could help your business, or contact investments@livingbridge.com.
