Harnessing Big Data for cross-channel success
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1 Harnessing Big Data for cross-channel success How analytics and intuition can lead to big results for modern marketers An Experian Marketing Services white paper
2 Summary: The Big Data promise Big Data is being touted as a kind of informational panacea through which marketers can reclaim ownership of the consumer-brand relationship. All marketers need to do, it seems, is collect multichannel data, decipher it then use it to create more effective customer messaging. Sounds simple enough, doesn t it? The problem is that Big Data is big. Really big. And big, when it comes to the quantity, complexity and speed of Big Data, can be intimidating even to the most sophisticated marketers. Which helps explain that while most enterprises are outspoken proponents of Big Data s potential, few have implemented such programs of their own. 1 Lost in all of the talk (and anxiety) about Big Data is that while volume, variety and velocity are good, value is always better. As in, marketers ultimately don t just want to collect and keep all of their customer data; they want to pinpoint the really meaty, meaningful pieces pertinent to their brand s goals. Lost in all the talk about Big Data is that while volume, variety, and velocity are good, value is better. But identifying and leveraging the informational gold lurking within Big Data is no easy task. Far from being little more than a traditional marketing exercise through which oversized volumes of data are processed, Big Data is a paradigm-altering phenomenon that requires brands to reconsider all of their data measurement, management and analytical practices. More specifically, big customer data makes it incumbent on enterprise marketers to: Fully understand the value of the data they are capturing Adopt a mindset to trust what their most valuable data tells them Develop fundamentally new strategies for organizing and leveraging that data 1 Gartner Survey Reveals 64% of Organizations have Invested or Plan to Invest in Big Data in 2013, Gartner, September 2013
3 Determining value in a Big Data world Big Data has been likened to new oil, an informational resource through which brands can forge more intelligent, targeted forms of consumer connection and engagement. Data is just like crude oil. It s valuable, but if unrefined, it cannot really be used. It has to be changed into gas, plastic, chemicals, etc., to create a valuable entity that drives profitable activity. 2 Michael Palmer Executive Vice President of Member Relations for the Association of National Advertisers Central to the Big Data refinement process is recognizing that the very nature of customer data has changed. Where not so very long ago a discrete piece of customer data (perhaps an abandoned shopping cart, for example) might have played an important role in informing a brand s channel-centric marketing tactics, in today s hyperconnected, multichannel marketplace, that same piece of data holds value for a much briefer moment. In a world where consumers can easily and rapidly transition from one channel to another in search of the best possible deal: How valuable is that abandoned shopping cart? What is its half-life, i.e., the length of time before its value to the brand begins to degrade? How much of this data should be stored and for how long? Which parts of that consumer interaction should be captured, stored and used to influence marketing strategy? Is that data relevant to a larger sequence of customer events? 2 Tech giants may be huge, but nothing matches Big Data, The Guardian, Aug. 23, 2013 An Experian Marketing Services white paper Page 1
4 The point being that as today s brands look to cross-channel data to develop deeper insights into their customers, they must recognize that discrete event data is a much smaller piece of a more sophisticated (and meaningful) puzzle. Its real value exists not in that lone event, but in its role within a larger flow of linked events. The real value of Big Data exists not so much in the customer event itself, but in its role within a larger flow of events. It is in this event sequence stretching across time, channels and customer actions that a far clearer portrait of customer behaviors, trends and intent can be extrapolated. And therein lies the true value of Big Data. By stitching together a huge volume and variety of seemingly unrelated but in reality linked consumer data, marketers are able to, in the words of Fordham University s Alice Marwick, Create mental models of [customer] actions, beliefs, and activities. 3 But to succeed at such a process requires not just new means of capturing and analyzing customer data, but the mindset to trust what that analysis tells you. 3 Status Update: Celebrity, Publicity, and Branding in the Social Media Age, Yale 2013 Page 2 Harnessing Big Data for cross-channel success: How analytics and intuition can lead to big results for modern marketers
5 In Big Data we trust Travel in the early days of the airline industry quite often was a turbulent affair. The piston-powered aircraft of the day was subject to the whims of nature, including darkness, geography and weather. Today, of course, its computer-operated, turbine-powered successors speed travelers across the globe, day or night, irrespective of topographical or meteorological barrier. The ease and speed with which consumers transition across channels makes the use of (and trust in) sophisticated blackbox analytical systems a must. Of equal importance was the mental leap required of the pilots to trust what all that technology was telling them. When I taught the Boeing 767, one of the original electric jets, I noticed that old-school pilots were quick to disconnect the then-modern automation and hand-fly the aircraft. (The thinking being that) we are first and foremost pilots, not automation engineers. 4 Capt. Mark Berry Despite their resistance to the idea, a changing world did indeed require those pilots to become automation experts in much the same way that modern marketers are being asked to trust their own version of black box analytical systems. 4 Do Commercial Pilots Really Suck at Manual Flying? NYC Aviation, Nov. 21, 2013 An Experian Marketing Services white paper Page 3
6 Analytics AND intuition The key here, however, is to recognize that Big Data does not replace so much as complement marketing instinct, experience and intuition. Big Data is not an ice-cold world of algorithms and automations, writes Big Data experts Viktor Mayer-Schonberger and Kenneth Cukier, coauthors of Big Data: A Revolution That Will Transform How We Live, Work, and Think. But it does speak to a new era of marketing data specialists who will rely on correlations without prejudgments and prejudice. 5 Gone are the days when marketers could outsource their data efforts and expertise to internal IT departments. Customers are moving too quickly, their devices and channels are too numerous, data volumes and complexities too extreme, and marketing s influence on every aspect of the brand-consumer experience too important to the enterprise. With Gartner predicting Chief Marketing Officers out-spending Chief Information Officers on technology by 2017, it s clear the pendulum has shifted and the two departments must work in concert if customers are to be understood and successfully engaged. 6 Knowing when to say good-bye An equally important part of tapping into Big Data s intrinsic value lies in understanding when to toss out data that is no longer of relevance to the brand. To do otherwise is to risk becoming a data hoarder, which puts brand marketers at a very real risk of being overwhelmed by their data. We have an enormous capacity to store information that we didn t in the past and new ways of searching it that didn t exist before. It is an exciting world, but it s very easy to drown in this data. 7 Rachel Kennedy Director of the Ehrenberg-Bass Institute 5 Does Big Data Mean the Demise of the Expert and Intuition? Wired, March 5, By 2017 the CMO Will Spend More on IT than the CIO, Gartner, March 3, Not All Data is Created Equal, CMO, Nov. 28, 2013 Page 4 Harnessing Big Data for cross-channel success: How analytics and intuition can lead to big results for modern marketers
7 Most relevance to the brand is not necessarily the discrete pieces of customer data (i.e., a specific purchase or action), but rather what that data means in relation to a series of other multichannel activities. In effect, the real value of a specific purchase isn t so much the purchase itself, but as a constituent piece to a far more sophisticated story that, through the powers of predictive analytics, points to far richer forms of customer engagement. As they are incorporated into a larger customer story, those individual pieces of data can be eliminated confidently. This process must be repeated again and again and even up the value chain. In short, this dynamic trending characteristic of Big Data implies a never-ending cycle of capturing lots of varied, rapidly evolving cross-channel customer data then processing it (through a combination of blackbox analytics and marketing instinct and expertise) to interpret, predict and confirm (or debunk) new brand marketing realities. Smart data is organized data Big Data obviously is valuable only to the extent that the individuals who depend on it can actually understand and make use of it. Marketers need to ensure that customer data is organized around principles that are tailored both to larger brand goals and to the requirements of internal users who are tasked with supporting those goals. A marketing campaign manager s demands from customer data, for example, will be quite different from those of a big picture Chief Executive Officer or a customer-centric call center representative. All of the marketing uses for Big Data fulfill shared enterprise objectives and are also organized for operational roles. Given the volume, variety and velocity of all that data, conventional data organizing tactics, such as spreadsheets, are simply not feasible (and certainly not useful). Instead, data visualization tools are increasingly seen as a critically important tool for making data easily accessible, meaningful and interactive to those who need it. An Experian Marketing Services white paper Page 5
8 By visualizing customer data, patterns of behavior can be gleaned and conclusions drawn, and this is where the real value of Big Data starts to become apparent. Far from merely examining customer demographics or activities in isolation, now marketers can interpolate a wide variety of data to develop: Deep customer insights Not just profiles, but insights into attitudes, behavioral habits, browse and visit patterns, engagement indices and response scores Cross-channel personas Brands can use deep segmentation (the greater the volume and variety of data, the deeper the potential segmentation) to create rich marketing personas that can be deployed across channels and are continuously enriched by near real-time behavioral data Multifaceted measurement Going beyond traditional key performance indicators, aggregated and trend data can be used to develop performance metrics across any number of categories of dynamic customer behavior, including customer engagement, channel preferences, cross-channel response attributions, etc., informing everything from merchandise allocations to complex marketing budgeting Conclusion: Not a question of if, but when It seems clear that much of modern marketing s anxiety surrounding Big Data analytics has less to do with the size of the numbers involved and more to do with the enterprise-rattling changes those numbers represent. In essence, Big Data equates to big changes. Looked at another way, however, this is an incredibly exciting time to be a marketer. Brands can take all of the data generated in the wake of the modern buyer s journey and derive deep insights into those customers insights that at long last make the old axiom about right message to the right customer at the right time a reality. Page 6 Harnessing Big Data for cross-channel success: How analytics and intuition can lead to big results for modern marketers
9 Is the process easy? No. Doable? Absolutely. And marketers are fortunate that the technology and expertise exist to make it a reality. Tips to help you get started: 1. Recognize that there s no going back to the good old days of favorite channel marketing. Customers aren t thinking channels, they re thinking convenience, and convenience means any platform, any channel, anytime Realize that the very same technologies driving these customer changes are creating a Big Data trail that, when properly collected and synthesized, delivers rich insights not simply into who these customers are, but the attitudes, motivations, habits, etc. upon which much richer engagement strategies can be built. Understand that most of what constitutes Big Data has an increasingly short shelf life; its relevance to the brand is driven either by rapidly changing customer behavior or the brand s incorporation of that data into larger engagement strategies. Either way, much, if not most, of that data can and eventually should be tossed. Marketing Big Data is of value only to the extent that it is organized, useful and accessible to those who most depend on it. In short, brands that follow the principles of smart data valuation and organization are going to once again find themselves out in front of the brand-customer relationship. To learn more about harnessing Big Data for cross-channel success, please call or visit us online at An Experian Marketing Services white paper Page 7
10 Experian Marketing Services 955 American Lane Schaumburg, IL Intelligent interactions. Every time Experian Information Solutions, Inc. All rights reserved Experian and the Experian marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the property of their respective owners. Experian is a nonexclusive full-service provider licensee of the United States Postal Service. The following trademark is owned by the United States Postal Service : ZIP codes. The price for Experian s services is not established, controlled or approved by the United States Postal Service. 01/14
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