Learn the Evolution of Marketing Data
Learning Objectives
After completing this unit, you’ll be able to:
- Explain the history of how marketing data has been collected and stored.
- Describe why these legacy systems aren’t sufficient for today’s marketer.
A History of Data-Driven Marketing
Most brands and businesses have been making investments for years in databases and systems designed to store data about their customers. Until recently, many marketing departments were able to meet their customer data needs using a combination of legacy databases and systems. These systems were often built around the needs of non-marketing users (like IT, finance, and purchasing). These systems often excel at the purposes they were built for. But they fall short when it comes to meeting a marketer’s need for a unified view of their customer and strong relationships across channels. In this module, we cover the shift towards data-driven marketing, including data types used, and how you can manage that data with a single customer data platform (or CDP).
Current State
Let’s use an example to explain the current situation faced by many marketers. Adrian is an outdoor enthusiast who’s had a customer relationship with outdoor gear and apparel retailer Northern Trail Outfitters (NTO) for 5 years. He’s been receiving emails from NTO during that time. Adrian opens and clicks emails from the retailer occasionally, and he most often clicks links for outerwear. The NTO email marketing team has used this engagement data to try to optimize Adrian’s customer journey. They’ve entered him in apparel-based journeys with an emphasis on outerwear.
During the same time, Adrian has shopped at the local NTO store for new boots each fall and active sandals each spring. He also recently watched several videos on the NTO website about group adventure travel packages. Yet the NTO email team doesn’t have a window into that aspect of Adrian’s customer relationship with NTO, so they can’t use that data to optimize Adrian’s email journey. At the same time, the NTO digital marketing team isn’t able to use the data gathered by the email team or NTO’s in-store sales system in advertising targeted to Adrian.
Since there’s no single view of Adrian anywhere in NTO’s customer databases and systems, NTO treats Adrian like different people, depending on where he’s engaging with the brand. This leaves him with a disjointed experience. For example, he went into the store and purchased a new spring pullover last week, but continues to receive emails about spring outerwear featuring the item he just purchased. Both NTO’s marketing team and Adrian would prefer to have a more consistent experience when he interacts with NTO.
The Five Forces
The need to provide customers like Adrian with a connected and relevant customer experience has created five forces that are pushing marketers to rethink their systems—integration, identity, AI, speed, and marketing evolution.
Integration: From channels to platforms
Marketers are realizing they need systems of engagement that move away from channel-focused siloed marketing toward a platform-focused approach—allowing them to treat customers like Adrian as one person as he engages across touchpoints. This means not just engaging a customer in each channel in a vacuum. Instead, the Email Marketing team and the Digital Marketing team work in unison to drive a connected experience across touchpoints. This can include other critical aspects of the customer experience as well, including Sales and Service.
Identity: From audiences to people
For brands to truly deliver a connected customer experience, they need to link a customer’s identity across databases and systems of engagement. That’s because to deliver these experiences, NTO’s marketing team needs to understand that Adrian is the same customer who purchases boots and sandals instore and buys performance hoodies and pullovers online. NTO also needs the ability to quickly recognize Adrian the next time he’s on the NTO website, so the brand can personalize his experience there as well. In short, identity allows brands to move away from audience-based marketing that lumps people into target groups or segments (for example, Millennial Outdoor Explorers) toward marketing that moves closer to 1:1 (our loyal customer Adrian).
AI: From diagnostic to predictive
More brands realize the power of artificial intelligence (AI) and machine learning (ML) to deliver insights and analytics that drive real-world results. With that, marketing is moving to a world where analytics is less about diagnosis and more about in-the-moment predictions. For example, the NTO team is less interested in knowing Adrian’s customer journey after he bought a jacket, and more interested in using their data about Adrian—and millions of other customer journeys—to help predict his next-best journey. To do this, you need a clean data set that unites all the data you have about all of your customers, including Adrian.
Speed: From batch processing to near real-time
Data-based decisions need to move at the speed of the customer experience. The shorter the delay between when data is created (like when Adrian clicks an ad) and when it’s available to act on, the more seamless the customer journey can be. Marketers are now aiming to move closer to real-time data processing and activation to deliver those real-time journeys.
Marketing evolution: From prospecting to experience management
Marketing is evolving within organizations to be responsible for the full customer experience. The role of marketing departments is shifting from driving customer awareness and preference to driving personalized customer engagement. This is making marketing departments realize that, more than ever, they need to own and manage the technology, systems, and databases they require to drive that personalized experience. In the past, marketing departments were happy to have IT choose, implement, and maintain customer databases—this is starting to shift dramatically toward a framework where marketers have their hands directly on these levers.
Transformation With Data
Like many jobs, the role of today’s marketer, whether CMO of a Fortune 500 company or a mid-level marketer at a small firm, has undergone a fundamental change in the last decade or so. Marketing used to be seen as more of an art than a science. In the past, marketers were always on a quest to find a new creative idea for their campaigns that would capture the imagination of their current and potential customers.
While creative ideas will continue to play a critical role in marketing, data is becoming more crucial to marketers than head-turning creative ideas. That’s because data is helping marketers meet customers’ growing desire for more personalized experiences from the brands they interact with.
This major shift in customer expectations is causing marketers to try to use their customer data to drive more of these personalized experiences. In the next unit, we review various types of data available to marketers and how to use data effectively.