Still pursuing a 360-degree view of the customer?

Lizzy Foo Kune

Foo kune is a VP and analyst covering marketing data and analytics, martech and adtech and has been with Gartner for more than five years. She boasts of a background in research and analytics, including roles with MIT Media Lab, Bain & Co and MinneAnalytics. She’s also worked with Performance Digital overseeing analytics and data science.

On the Internet, nobody knows you’re a dog.” It may have been true in 1993 when this caption to a Peter Steiner cartoon appeared in the New Yorker. But after 30 years online, it’s no longer the case.

These days, everyone knows I’m a Bernese Mountain Dog living in Greater New York City who likes Nylabones and Jolly Balls. I eat a particular kind of high-end dog food because it’s good for my coat — and helps me manage my weight. They also know I enjoy barking at the gig worker delivering the dinner my human ordered through a mobile app. Still, all this data begs the question: What do companies achieve from the relentless pursuit of a 360-degree view (of the dog)? The answer? Nothing.

Flawed thinking

This year, my Gartner colleague, Benjamin Bloom, and I published ‘Maverick’ research, designed to expose unconventional or alternative views, arguing pursuing a 360-degree view of the customer will destroy your business.

The research isn’t an indictment against customer data. It’s an indictment of the idealistic, unrealistic and impractical pursuit of an omniscient customer view. It contradicts the prevailing wisdom pursuing a 360-degree view of the customer is a mandate for most – if not all – organisations. We recommend you abandon your pursuit, for several reasons.

A key reason is the cost is disproportionate to the value. Organisations have spent the better part of the last 20 years on a quest for this mythical 360 – and have a lot to show for it. Maybe too much. In some cases, we’re talking to organisations that have four or five CRM systems, a customer data platform, master data management, random big data projects and more.

The value of collecting and unifying customer data remains unclear. Half of the respondents to Gartner’s 2020 Marketing Data & Analytics Survey agreed pursuing a 360-degree view of the customer, also known as a ‘unified view’ or ‘single view’ of the customer, isn’t worth the investment.

Take Clorox, for example. As it began to personalise and place advertising content using consumer data, its marketing team developed increasingly targeted, personalised messages for highly specific groups, but did not see clear improvement in commercial outcomes.

Another problem with a 360-degree view is it potentially violates privacy regulations. As global data privacy regulations continue to mature, marketers are finding it increasingly difficult to obtain and secure the data needed to build a 360-degree view of the customer. The cost to comply is high, and fines for non-compliance can be severe. The risk of overinvestment in customer data will only increase as data privacy regulations and efforts evolve and customers become more protective over their own personal data.

Then there’s the question of trust. Customer don’t want you to know everything about them. As a consumer yourself, how comfortable are you with the idea of an organisation having 360 degrees of you and everything you’ve done online (and offline) sitting in a brand’s database?

The Cambridge Analytica scandal provided a foreboding lesson for brands: If you strive to know more about your customers than they’re willing to share, you will face consequences. Then there’s the problem of cementing obsolete data collection methods. Businesses that depend on user-level identifiers to track and target customers will be in dire straits as device makers, Web browsers and tech giants continue to limit marketers’ ability to track users across the digital ether. Most notably, Apple phasing out its Identifier for Advertisers (IDFA), the death of third-party cookies and a shorter shelf-life for first-patty cookies will impact digital marketing teams’ ability to collect data.

Necessary data

Instead, marketers should focus on how their organisation creates value for customers by collecting only the data necessary to support marketing operations, product innovation or customer experience. In their 1993 Harvard Business Review article, ‘Customer Intimacy and Other Value Disciplines’, consultants, Michael Treacy and Fred Wiersema outline three ways businesses can deliver value:

  • Operational excellence: Giving customers what they need as efficiently and inexpensively as possible
  • Product leadership: Providing innovative and best-in-class products that outclass the competition. For example, Tesla, which doesn’t even have a marketing or communications function, focuses on using customer data to enhance its products
  • Customer intimacy: Using data to tailor offerings to specific customer groups or segments.

Put simply, we want organisations to re-align with their goals.

How do you do that? Begin with your use cases. Why are you pursuing a 360-degree view? How does that align with how your business creates value? Then, examine how your existing technology delivers against that and where gaps might exist. Most importantly, measure how you’re delivering against your use cases.

Marketers that excel beyond their competitors will focus on consolidating and integrating the customer data they already have, while matching the right data for the right purpose at the right time to deliver against their organisation’s value disciplines.

Tags: customer experience management, data-driven marketing, marketing strategy, marketing leadership, personalisation

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