The Truth About Data-Driven Marketing
Interesting data out of PricewaterhouseCoopers, (H/T to Marketing Charts), that shows many large businesses depend more on intuition than data when making key decisions about their marketing and strategy and that highlights a core truth about data-driven marketing: When it comes to using data in their decision-making, most companies don’t practice what they preach. Money quote:
“According to the study, 49% of respondents agree that “data analysis is undermining the credibility of intuition or experience,” while just 21% disagree. At the same time, when asked which of a selection of inputs they placed the most reliance on for their last big decision, 30% of respondents pointed to their own intuition or experience, while 29% relied most on data and analysis and 28% on the advice or experience of others internally. In other words, a majority relied most on experience, whether their own or someone else’s.”
There’s similar data in the latest CMO Survey [link to PDF] results showing that fewer than 40% of respondents can “prove the impact [of marketing spending] quantitatively” (see page 65 of the report).
This reminds me a lot of the book (and film) Moneyball, where “sabremetricians” (the data analytics folks), and scouts (the qualitative/intuition-based/gut-feel people), battled for control of their teams’ future. Yet, when you fast-forward to today, you’ll see that the real winner of those battles are the teams themselves. The data analytics wizards provide insight and information to the intuitive, experienced veterans and together make the right decision for the team as a whole. The operative approach here isn’t about using data or experience, it’s about using data and experience.
It’s become popular among data-driven types to say, “Beware the HiPPO” (which stands for “Highest Paid Person’s Opinion”). I frequently say it myself. I’ve also added an important corollary to that maxim: “Especially beware the HiPPO if it’s you,” because the higher you go, the harder it can be to get high-quality, honest feedback and information from the people in your organization. That’s not to say your team is lying to you; it’s simply that they’re often incentivized to present information about themselves in the most favorable light or, whether you intend it or not, feel pressure to tell you what they think you want to hear.
And that’s why I preach “data-driven marketing” with my clients and practice it in my own business. But the truth is, “data-driven” isn’t limited to quantitative data. You want to augment your quantitative data with observation and insights from your front-line customer service folks, too. Or, better yet, get out and see for yourself.
As the PricewaterhouseCoopers data shows, you may not always have the data you need when you want it: Only 52% of respondents in that study rated timeliness of data as “Excellent.” It’s an unfortunate reality that you won’t always have the data you need when you want it.
Sometimes you’ll have the ability to defer your decisions until you get more data; but far more often you’ll have to make the best decision you can based on the data that’s available.
And that’s why I usually recommend you collect data about your customers and observe their behaviors first-hand. Your marketing and web analytics tell part of the story, but that doesn’t mean it’s the whole story. For online, A/B tests, usability tests, discussions with call center agents and ghosting on customer service/sales calls, and the odd bit of heuristic or ethnographic research can help fill in the blanks about your customers’ behaviors. And, offline, it’s even easier. Just take some time to walk your showroom (and your competitors’), watch customers in the checkout lines, and, talk to customers to add a wealth of insights to the information you’re gathering. And effective use of surveys can help you gain key insights about customers both in-store and online.
The plain truth about data-driven marketing is this: All data is good data. It doesn’t matter whether that data comes from analytics tools, customer surveys, or just plain old conversations. The companies using data-driven marketing most effectively take all of that information — the analytics and the intuition — and use them to produce true insights that drive their businesses forward. Don’t be like the guys in Moneyball, fighting to see who wins. Instead, get those groups working together so that the whole organization wins.
FYI, this is your last chance to register for my latest webinar, Digital Marketing Directions: Key Trends Driving Your Marketing Next Year, that I’m presenting tomorrow, Tuesday, September 16, 2014. You can read all the details here.
And since we’re talking about observing your customers, let’s talk about a channel that offers a wealth of data about customer behavior: Email. This look at growing your email list can help you gain additional insights and information about what matters to your customers. You can also review the slides from a talk I gave all about email marketing in an age of mobile:
(And, yes… you can hire me to speak at your next event, too).
And, if you’re interested in learning even more about how customers changing behavior shapes e-commerce and marketing, register to receive a special report I’ve produced in conjunction with hotel marketing firm Vizergy, “Digital Hotel Marketing in a Multiscreen World.” While it’s targeted specifically at hotel and resort marketers, the lessons apply to just about any business. You can get your free copy of the report here.
Finally, you might also enjoy some of our past coverage of the mobile, local, social web and how to make it work for your business, including:
- What Your Customers Expect from Mobile and E-commerce in 2014
- The Secrets Behind “It’s All E-commerce” for 2014
- Should Marketers Really Trust Google in 2014?
- The Zen of Digital Marketing Strategy
- 7 Steps to E-Commerce Heaven
- Today and Tomorrow: Mobile and The Changing Customer Journey
- Mobile Makes E-commerce Even More “Frictionless”
- Your 2014 Internet Marketing New Year’s Resolutions – Thinks Out Loud Episode 56