There was a time when we used to keep our cash under the mattress, free from prying fingers but generally not doing us much good.
In order to drive value out of an asset, you have to allow the asset itself some freedom. In some cases, such as with ‘cash’, help from a third party can allow you to drive more value. The principle of banking is that by aggregating your hard earned cash with everybody else’s they, the banks, can improve security, spread risk and improve returns while sharing (some) of the upside with you in the form of interest.
Historically, access to cash was resource heavy and difficult. Then along came ATMs, followed by Internet banking, digital wallets and contactless payment, giving anytime access and control over your own assets.
Fast forward to today, and data has become the new currency. Marketers have a voracious appetite to collect data from social media, point-of-sale (POS) terminals, website traffic and marketing campaigns. But all too often, that lovely data is locked up under the proverbial IT mattress, difficult to access and not doing anyone much good.
Australian companies are expected to increase their spend on big data by 30 per cent this year, as big data grows into a $15b industry. With tech companies such as IBM and EMC spending up big, much of that money will go into spending on IT infrastructure, storage and dashboards. The businesses that win are those that are able to get their data into an environment where the marketing department can leverage value from it. This is the ideal environment for the opportunities available within the data to be explored and leveraged.
Unfortunately, most marketing directors in Australia aren’t used to dealing with vendors like IBM, or with IT departments in general, and are battling to get access to their own data. So information sits there, under the mattress, unusable. Tech folks are great, but too often they are seen as a barrier, getting in the way of the single most valuable decision-making and strategic tool.
After 20 years of negotiating these challenges, here are four tips that may help.
Treat data like any other component of the marketing mix. Build a robust business case for investing in data and capability, based on impacting customer value. Identify internal strengths and weaknesses, as well as external opportunities and threats – data is an opportunity to grow value, not a cost to be managed. Work with a champion within IT to understand the pressures and language to create a joint approach.
Understand that the technology team is ultimately responsible for data security and work with them to mitigate risk. Then you’ll both be able to share in the rewards which come from leveraging the data.
Technical barriers are getting lower while commercial barriers are getting higher. This means you need to start simple. Work out the commercial requirements of your data strategy, including details of your analytical needs and expected outcomes. A real competitive advantage is gained by investing in data-driven activity where you have the ability to predict what will happen, or be needed in the future.
Learn to understand and use the language of the finance department. Basing an argument on a set of financials which employ the correct discount rate (such as in net present value models) and demonstrating that an investment provides a competitive return on capital is a powerful approach – and one which is hard to ignore.
Every business is making investment decisions based on predicted return. If marketing is to be viewed as an investment, as opposed to a cost centre, we all need to learn how to present business cases that are framed in the correct language.
Technology alone doesn’t really solve much. A quality data strategy can be best enabled by skilled people with a passion for what’s possible with data. Titles in this space are many and varied - data strategist, data scientist, data analyst, chief data officer to name a few – but the people, not the titles, are the important element.
Assemble a team of like-minded people with different skills from IT, finance, marketing and sales. Getting your team to own the outcome of a data-driven strategy will strengthen the relationships within the team and help improve the flow of information – and data. As always, learn from mistakes and remember to celebrate success.
Herein lies the challenge. We need the support of IT departments to help capture and store the reams of data we want, from customer databases to social media insights, store traffic to POS. IT departments are great at doing that, but we also need to be able to use that data anytime, anywhere. IT departments can’t make that happen without the right support from marketing and the rest of the business. Clearly defined requirements and use cases will become as important to marketing departments as creative briefs.
Your jointly-developed data strategy must address how, when, where and why you want to access data. Media buying, eDM sends, product development, PR campaigns. If you need to queue for a report every time you need data, you are in trouble. Think about it in advance, but also build in accessibility and flexibility from the start.
Organisations need to use their most precious corporate asset in a way that best realises its potential, not allow it to gather dust under the IT mattress. Big data has the power to transform marketing, yet requires a mentality that goes beyond storage and protection. A customer experience enriched by data will be a defining competitive advantage of the future. While the relationship between data and marketing is complex, ignoring the opportunity is the greatest risk of all.
Let’s work together to make the data as available as our cash – just don’t spend it all at once – and make sure we’re getting a return.
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