Data as the new oil is not a new concept. Widely credited to Clive Humby, the noted UK mathematician and architect of Tesco's Clubcard, it is a snappy notion, but what does it actually mean today? It should mean that data is being leveraged to support modern, profitable and efficient business. However, the reality is that customer data is mostly an untapped resource which is barely touched.
Information has huge potential, but correctly collecting and analysing customer data requires a new skill and mindset. Get it right though and any concerns levelled at marketing around its ability to measure impact quickly start to evaporate.
This is because customer data can not only help to improve the customer experience, but also to drive business growth, while simultaneously lowering costs.
That CX has the power to drive loyalty over and above other factors including price is widely accepted today. The 2017 Gartner Customer Experience in Marketing Survey revealed that 81 per cent of businesses expect to be competing mostly or completely based on CX in two years’ time.
The key is relevancy — managing customer data to derive insights and using that knowledge to communicate in ways that meet business objectives, i.e. to improve retention, increase direct debits, increase up-sell or cross-sell opportunities, or to drive more digital engagement. Using customer data to produce personalised communications that drive tangible business results is an exciting area; and one that is moving marketing closer and closer to the heart of business strategy.
The past year has seen sudden and unprecedented change in the business and economic environment. New risks and security vulnerabilities have threatened the safety of customer data. In the first half of last year, 918 data breaches were recorded, including at accountancy leader Deloitte, healthcare company Bupa and internet giant Yahoo!. An average of over 10 million customer records are estimated to be exposed every day, according to Gemalto. Tightening regulation, such as the General Data Protection Regulation (GDPR), mean companies must report breaches in a certain time and could face hefty fines. As the impact of data breaches increase, it’s crucial for businesses to manage risk to enable customer data to remain safe and deliver against the notable opportunities for strategic business growth.
And the opportunity is huge. Developing a better understanding of consumer behaviour, the detection of issues and improved decision making, among others, can all result from effective data analysis. This approach to information is also fostering new business models that can unlock routes to improved communication and interaction with customers.
This trend is only going to grow too, as business transformation continues to overhaul businesses and changing consumer behaviour, such as increasing use of new devices via wearables and the Internet of Things (IoT), require even more data to be collected.