Create, connect and activate: These three principles, properly applied, will lead companies to new levels of data-driven success.
Companies that believe they are what they sell are quickly being displaced by those that see themselves not just as a product, service or solution provider but as data-driven customer problem solvers. While what you sell may define your goals, objectives and competitors, it will be the innovative use of data and technology that defines your bright future or your undoing.
Just 10 years ago, who could have guessed that the world’s largest hotelier would own no real estate? After Airbnb’s recent IPO, the company was worth more than the three largest hotel chains combined. And in the transportation industry, Uber, one of the world’s largest transportation companies, owns few vehicles. It started off delivering people to places and expanded to deliver things to people. And consider what it means for both these companies to expand locally and globally. They don’t have to build more hotels or buy more vehicles; they completely shifted the paradigm.
Airbnb and Uber made strategic decisions to focus on people and to learn about their needs and buying habits at a faster rate than their competitors. While they are leveraging technology, the true star of the show is data. Their data-driven focus allows them to consistently optimize and respond to their customers’ needs and grow their business.
Companies that are data-driven see themselves differently. They see themselves as capable of disrupting any product or industry by using data ethically to their advantage. So then the question really is – how do you use your data to transform your business, disrupt your own category, be more efficient and start to see your brand beyond what it sells?
Three principles of being data-driven
Principle #1: Create
- Create an enterprise data strategy. Creating your data strategy is the first step. It is impossible to transform your organization into a data-driven business without a strategy, plan and roadmap. The best companies in the world ask people for their data, but they don’t do it all at once. Creating a value exchange between people and your brand will give you direct, consent-based insights and is fundamental to your success.
- Create a data-driven organization. I heard directly from Billy Beane, GM of the Oakland A’s and the inspiration behind Michael Lewis’ book Moneyball: The Art of Winning an Unfair Game, that, “You can’t choose to listen to the data only when it supports your argument.” Cultural shifts regarding the use of data must occur.
- Create your identity graph. Connecting your customer data in an identity graph that is unique to your brand is paramount. Synchronize identity data that is used across your enterprise, and synthesize and analyze every customer transaction, no matter where it happens. To understand people, you must first recognize them.
Principle #2: Connect
- Connect across the company to drive insights and accountability. Get data in the hands of the people that can use it to transform your business: the product teams, the support teams, the delivery teams, and yes, the executives, so that they, too, can become data-driven. Business management thought leader Peter Drucker said, “Culture eats strategy for breakfast.” In today’s business environment, a data-driven culture eats a technology strategy any day.
- Connect rich third-party and second-party data to your first-party data. There is a significant amount of data available for purchase or trade that helps create insights about your customers. Start at the core with demographics and psychographics, then layer in behavioral, preference and consumption insights. Connecting your data with strategic partners’ data to maximize the outcomes of your business is a key competitive differentiator going forward.
- Connect your martech and adtech. The best companies in the world have invested millions in their marketing technology stacks and have spent as much or more in the advertising ecosystem. Connecting the two puts more data in your hands and provides greater control of how and where your media dollars are spent. One of the biggest cost savings from being data-driven is connecting all your addressable marketing audiences and insights.
Principle #3: Activate
- Activate at every touchpoint to enhance the customer experience. Forming relationships and meaningful value exchanges with people requires data. Any permissible data you can use to help people save time, money or delight them with new insights or suggest new content/products/services is almost always looked favorably upon by your customers.
- Activate your data across all paid media to optimize spend and increase performance. Some of the biggest ROI you can achieve is by applying your first-party data to your paid media activities. You can expect to see improvements of 20% to 30% in your marketing efficiency and cost management when taking a people-based marketing approach. This minimizes the need to buy anonymous audiences that rely on cookie pools and are often a hotbed of bots.
- Activate the insights collected via owned, earned and paid back into your audience models. Most of the insights gained by the interactions your brand has with people are tied up in data and technology silos or your account-of-record systems. Bringing your insights back into your owned platforms provides a rich data set that historically was not available to your brand.
Being data-driven ensures your business can achieve sustainable growth and competitively differentiate itself. Focusing on these three principles will help you get there.
What about data privacy and regulation?
It goes without saying, you should ensure that whatever you do with data is ethical. There are FAIR data standards and regulations – FCRA, HIPAA, COPPA, GDPR and CPRA – that exist to ensure there is a balanced use of data and an equitable exchange between your business and the people you serve. The bottom line is you should be responsible, fair and transparent, not just because you have to, but because it is the right thing to do.
Make the ethical use of data part of your core values, and remember the value exchange both for people and your brand. People are willing to share their data if in return they get things like convenience, time savings, money savings and entertainment. If they see value. If you’re listening to and guided by people, your business will grow.
Find partners that can help make your data-driven dreams a reality
At Acxiom, we are actively using these principles to help some of the largest companies in the world continuously transform their businesses and their marketing practices. We are partnering across their organizations – executive teams, IT teams, product teams, marketing teams – to create, acquire and activate data-driven solutions.
I often get asked, “Does this strategy still apply if you don’t have direct-to-consumer relationships?” Absolutely! Every company must be data-driven and people focused to succeed and survive. This is hard stuff, and no one gets a pass because your new competitors are not your old ones, and make no mistake, your new competitors are data-driven.