The big data revolution

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1 The big data revolution Expert report in partnership with

2 Big data, big challenges Big data is changing the world a hundred terabytes at a time. It allows marketers to make highly informed and effective decisions and deliver targeted and personalised experiences to consumers, who expect exceptional and who are more tech-savvy than ever. In partnership with Valtech, Brand Republic gathered 10 influential data and digital marketing leaders from the financial services industry for a debate on big data. The panel s objective was simple: establish big data challenges, then find solutions to future proof organisations against an increasingly turbulent marketing landscape. With big data becoming a priority for marketers across all sectors, this expert report looks at how businesses can embrace the cultural change required and learn to talk in the language of data. With mobile and social still thriving, we expect to see internet usage top 50% of the world s population during mid to late 2016, so data stores will continue to proliferate. 1 <30% Less than 30% of marketers are collecting data at the point of sale; a data point that could lead to valuable insight into a customer s purchase behaviour emarketer. Signal, preparing for cross-channel success: Solving the identity puzzle, March 24,

3 The data paradigm shift The advancement of technology over recent years has resulted in a transformation of today s marketing landscape. This progression has resulted in an explosion of data that many marketers are ill-equipped to exploit fully, with most still stumbling over how best to harness this wealth of information about their customers and their business. It could be used to create actionable insights that add value not just to the business itself, but more importantly to customers - creating brand loyalty that may not have existed before. Today s consumer is bombarded with information, customer reviews and comparison sites. Now more than ever, it s crucial to create lasting brand advocacy and maintain long-term customer retention. Gathering data used to be simpler process. Now we can measure social interactions, mobile phone usage, click-through rates, geolocation data, online browsing and purchase behaviour. But this data-rich, connected world means a much more demanding customer, with significant expectations. The panel of influential experts were all in agreement that marketers must now use big data to build an intelligent business with greater transparency that creates tailored experiences built on rich, meaningful insight. They need to start showing real business value through effective measurement and setting useful KPIs. What follows is better, more informed decision-making based on data and insight. The three Vs of data 3 01 VOLUME terabytes, records, transactions, tables, files 02 VELOCITY batch, near time, real time, streams 03 VARIETY structured, unstructured, semi-structured 3 Bayer and Laney

4 What data really matters? There is a lot of noise in the digital space, so it s no surprise the volume of data available overwhelms many marketers. The challenge is taking that raw data and generating insight, driving decision-making and delivering impact. One of the biggest challenges, identified by a vice president at a large insurer, is working out exactly what is relevant? If you can take what s useful and relevant for an individual customer and use that insight to drive personalisation, both of communication and of products, then loyalty will follow. But, even with the wealth of digital and analytical tools available, finding a solution that fits perfectly is almost impossible. Creating a single view of the customer is a fantastic aspiration, but is it really possible across major financial organisations? Can the issue of legacy be overcome? There are many new technologies designed to analyse and manage big data to help businesses leverage the data in real time. Jordan McIver, a senior consultant at Valtech, says that businesses should first identify the business challenge they are trying to address. Identify what problem or opportunity you are trying to Creating a single view of the customer is a fantastic aspiration, but is it really possible? Start with a hypothesis Use the data to assess that hypothesis solve, before settling on the specific solution you want to implement. This is a mistake that many organisations make - choosing the technology, then working out what business problem it solves. Understanding your customer is about pulling the right information from the right place, at the right time. Yet, one consistent mistake is to try and take the data in its entirety and analyse it. Large chunks are hard to process. McIver said that insights Execute on your strategy Let the data tell you what your audiences needs are generated from effective data management don t have to be big. Start with the most important bits no matter how small. Valtech call this Agile Data. Using big data as a starting point to build a strategy won t solve business problems according to the CDO of one large insurance broker. The strategy is bottomline; know as a business what you want to do strategically and ask important questions first. Then you can use the data for more targeted work. But Valtech believe that data and strategy should go hand-in-hand. Without understanding your goals, you cannot know the right questions to ask of your data. Without the right data, you cannot fully assess the potential value or risk of strategic decisions. 4

5 Align professionals within the business Skills are blending. This presents a huge challenge when it comes to recruiting the right talent. Businesses are still trying to achieve the same result but data has enabled a new generation of digital marketers with a new set of skills. This is a consistent challenge faced around the table. How do we harness that talent and is there still a need for the traditional marketer? Where marketing was once considered more of an art, we are now seeing science and traditional marketing practices fuse together. One problem identified by the panel is that these can be two very different types of people, speaking very different languages. The solution? Drive the convergence of skills between the marketing and data teams, so that both work together across the business. Next, apply agile methods with cross-functional teams working on problems with clear objectives. In every team, each element needs to understand what the other side does the data analyst needs to know what marketing question is being asked, and the marketer needs to understand why and how the analysis is coming up with a particular outcome. The head of customer and digital marketing for a major savings and investment firm, said that because of the age of their business, there were still very old-school, traditional values rooted within the company s mechanics. But once they started doing things with the customer in mind, and applied agile methods, the insight that followed changed the way the business operates. More generally, agile practices are becoming extremely prevalent, and not just across the creative industries. Companies are seeing how an agile approach can lead to a more innovative business - a vital attribute to compete in today s digital world. Applying this approach to big data can unlock benefits that have long been talked about, but in many cases haven t been realised. Before big data was cool When Tesco partnered with the data science giant Dunnhumby back in 1995 to create its Clubcard, the supermarket motored into a position of market dominance. The Tesco Clubcard loyalty scheme set a precedent for retailers with its hyper-personalised approach to customer insight. It allowed Tesco to gain an understanding of customers buying habits. This was among the first uses of big data and shows that exploring the possibilities data enables, you can create a more innovative and customer-centric business. When former Tesco boss Sir Terry Leahy first suggested the idea to an unconvinced board, it was dismissed. But Leahy returned with more evidence that his idea would prove valuable to the supermarket giant and it did. Speaking at a Marketing Society conference in 2013 Leahy said: Innovation and failure are two sides of the same coin. 5

6 Consumers expect more from you but less than an invasion of privacy The privacy issues surrounding the collection and storage of big data have been around for a long time, with consumers concerned about how their personal information is distributed online and offline. One underlying issue all the panel faced is that of data security. Just when a resolution materialises the barrier of compliance and security rises to the surface. Looking from an international perspective, the director of CRM for one brand said that in Europe they see a lot of marketers afraid to have a relationship with the consumer because of the permissions involved with CRM. Yet, there is so much that can be done with relatively little data. They said the most basic of data collected from a website can often be the most effective. But companies can paralyse themselves by overcomplicating the things they should be doing with data. A catastrophic cyber attack on one phone network giant s website brought them into the spotlight and under relentless scrutiny, when 4% of their customer base was left with sensitive data at risk. The TalkTalk breach of October 2015 brought issues with big data storage back into the public eye. It s thought around 157,000 personal customer records were stolen in the attack that left many customers feeling let down and concerned about the future of their data. One thing we are seeing the rise of is the CSO Chief Security Officer whose job is to protect customer data. TalkTalk have a long way to go before customers can fully trust that, in the future, their data is safe and used in a way that does not come with undue risk. When it comes to privacy and consumer consent, the panel agreed that trust comes from transparency. It s about using the aggregated data with the right consents and permissions and monetising it in a way that adds value. If a consumer can see the value in how their data is used and that business has been transparent from the offset, then privacy becomes less of a hindrance. Trust comes from transparency. It s about using the aggregated data with the right consents and permissions and monetising it in a way that adds value 6

7 Valtech s look to the future Generating a 360-degree view of a customer isn t just a nice to have. It will soon be a necessity; many businesses are already proving the worth of hyper-personalisation and more valuable measurement. Businesses need to embrace the opportunities big data has enabled; if exploited correctly and in a timely fashion, it can give companies a competitive advantage. But the race is on. Big data can lead to better customer retention; with insight into customers specific needs, marketers have the opportunity to upsell and provide customers with information that s actually useful to them. Customer experience is about relevance and creating a seamless end-to-end journey. Marketers can drive more profitable marketing with highly personal and relevant messages to consumers thanks to programmatic advertising and this leads to more effective and measurable marketing campaigns: what s working, what isn t? Segmentation becomes more granular as big data enables businesses to identify new customers instead of defining a customer based on artificial segmentation. This new customer type is based on preferences and behaviours. Conclusively, marketers can drive greater ROI, marketing efficiencies and identify opportunities that didn t exist before, which will accelerate their brands position and offering. Generating a 360-degree view of a customer isn t just a nice to have. It will soon be a necessity 7

8 4 key learnings 1 STRATEGY AND DATA NEED TO TALK Don t talk about data in isolation it must work hand-in-hand with the strategy. You need to establish business priorities, business questions and business strategies, and work out how data can support. 2 TRIAL TECHNOLOGY Take risks. Trial ideas, see what does work and what doesn t abandon what doesn t work and develop what you think might and do it iteratively using a feedback loop. APPLY AGILE METHODS 3 4 Let the experts interrogate the data and educate the rest of the business on the opportunities it presents. Then respond to the opportunity even if it requires a business change. WHAT S USEFUL TO THE CUSTOMER? CRM is about building longer-term relationships with a consumer. It s about making sure the customer gets the right experience, at the right time, with all the right consents. Put the customer at the centre of every action. Find what s useful, make it relevant so THEY see the value in giving the data, but also in YOU as a brand. 8