So you think you know your customers?

Transcription

1 #DataTruths So you think you know your customers? The Callcredit Marketing Data Report

2 Research methodology This research was commissioned by Callcredit Information Group and conducted in September 2017 by Loudhouse, an independent research consultancy headquartered in London. We asked 200 marketing decision makers with responsibility for customer insight to complete a survey about their approach towards marketing data and analysis. All respondents were from UK-based organisations. To support this research, 2,004 consumers in the UK were surveyed to learn more about customer attitudes towards how their data is used for marketing purposes. 2 callcredit.co.uk

3 Is smart marketing smart enough? The age of big data has given marketers more ways to do the fundamentals of their job better, but the benefits are multi-faceted and not always fully realised. On the positive side of things, marketers are using data to get smarter in everything they do. However, a question remains in how they re using data and insight to truly understand the people they need to be talking to. Indeed, when we spoke to 200 marketing professionals, the benefits of smart marketing were widely recognised: 89% said that they are getting much smarter at using customer data to drive marketing performance, and 85% believe that using data is improving the efficiency of their plans. They are favouring a more integrated approach, with a greater variety of data sources and analytics tools, to get a more comprehensive view of their customers. Marketers also believe that this smarter, streamlined approach to data is also delivering more for consumers. Of those we surveyed, 62% state that their customer systems (such as CRM, e-commerce, analytics, etc.) are integrated and geared towards creating the best possible experience. All of which, in turn, delivers a significant competitive advantage. In fact, nearly two thirds (65%) of respondents believe that smart marketing has helped them outperform the competition in terms of acquisition and retention. However, despite the positive sentiment, marketers may not have as clear a view of their customers as they think. When we surveyed over 2,000 UK consumers, many of their attitudes towards how their data is used differed significantly from those of marketing professionals. Marketers have over or underestimated consumer expectation in a variety of areas, including their hesitance towards, and level of frustration with, giving access to personal data. Our research makes it clear that more can be done to improve a business s understanding of their customers. In this report, we will look at the ways in which marketing has grown smarter with data, but we will also look at the discrepancies between marketers and consumers in their attitudes towards data. Finally, we will provide practical steps for how to gain a more accurate picture of customer intentions and look at the tools every organisation needs. The message is simple: marketing is smart, but there are ways to make it even smarter. Steve McNicholas MD, Credit and Marketing Data, Callcredit Information Group The Callcredit Marketing Data Report 3

4 Marketing has become smarter What is smart marketing? Smart marketing is an inherently data-driven approach to marketing. Using advanced analytics systems, a greater variety of sources, streamlined platform integrations, data science and machine learning to provide a holistic, reliable and accurate view of customers and their intentions. In recent years, marketers have been using an increasing number of data sources to inform their decisions. Fig.1 shows us how more and more organisations have expanded the variety of information used in the last year. For example, internal sources such as CRM and marketing data have almost doubled in popularity year-on-year, from 37% in 2016 to 67% in Similarly, the usage of behavioural data has grown from 35% in 2016 to 47% in 2017, making it the second most widely used source. Meanwhile, external and social media data remains popular social media in particular saw a noticeable increase from 31% in 2016 to 44% in callcredit.co.uk

5 Fig.1 Data sources used to inform marketing decisions, 2017 vs % 37 % Internal data [eg CRM marketing data] % 35 % Behavioural data [eg Visitation or spend] 45 % 38 % External data [eg Public or third party data] 44 % 31 % Unstructured data [eg Social media] 43 % 27 % Market research data [eg Survey data] 41 % 32 % Transactional data [eg Credit card & phone usage] 41 % 34 % Socio-economic data [eg Lifestyle, life stage, demographics, employment, social security, geo-analytics] 34 % 26 % Communications history data 30 % 26 % Occasion data [eg Motivations, feelings on last occasion] 23 % 29 % Media data 11 % Attitudinal data [eg Traditional adventurous or creative] The Callcredit Marketing Data Report 5

6 Fig.2 Data sources looking to be introduce in the next two years Transactional data [eg Credit card & phone usage] 23 % Communications history data 23 % Media data External data [eg Public or third party data] Behavioural data [eg Visitation or spend] Unstructured data [eg Social media] Socio-economic data [eg Lifestyle, life stage, demographics, employment, social security, geo-analytics] Occasion data [eg Motivations, feelings on last occasion] Market research data [eg Survey data] Attitudinal data [eg Traditional adventurous or creative] Internal data [eg CRM marketing data] 21 % 19 % 18 % 17 % 10 % Businesses are also planning to introduce an even greater variety of information in the future. But as we can see from Fig.2, no single data type emerge s as the clear priority. Instead, the focus appears to be on creating a 360-degree view of the customer from as many sources as possible. The wide variety of sources marketers extract data from calls for a greater suite of tools to analyse and derive actionable insights from it. Fig.3 illustrates how, compared to just a year ago, cloud-based tools such as Adobe Marketing Cloud or Google Analytics have become even more crucial to marketing teams, with two thirds (65%) of businesses reliant on web analytics tools, compared to 45% a year ago. Indeed, cloud-based tools are now the most used by businesses, ahead of sophisticated statistical packages such as SAS or SQL (62%) and Excel (53%). This is the result of the growing popularity of web analytics over the past two years, with over three in every four businesses (77%) saying they now rely more on these kinds of tools. 6 callcredit.co.uk

7 Fig.3 Data tools being used to realise marketing goals 2017 vs % 37 % 62 % 48 % 53 % 42 % Web analytics / tracking tools [eg Adobe marketing cloud and Google Analytics] Statistical packages for analysing large datasets [eg SAS, SQL, R, SPSS] Excel 39 % Modelling packages [eg Enterprise Miner, Alteryx, Sawtooth, AMOS] 36 % 15 % 26 % Train of thought analytics [eg Discoverer, Apteco] Businesses are looking to use a wider variety of information sources as part of making marketing decisions, and they are investing in more tools to analyse the data. But is more better? Despite the amount of data and analytics platforms at their disposal, one in every five marketers (21%) still sees providing the business with clear directives based on customer data insights as their biggest challenge. Additional sources and more tools create a greater burden on marketing professionals to discern what data is useful and what isn t. It also increases the need for the skills and expertise to use the tools to derive actionable insights. And there is a greater challenge to bring all of that information together in a single place. Arguably, it s these challenges that mean marketers may not have as clear a picture of customers and their expectations as they might think... The Callcredit Marketing Data Report 7

8 8 callcredit.co.uk

9 Time flies Fig.4 Time spent working with customer data The proportion of marketers happy with the amount of time they spend working on customer data has remained roughly the same year-on-year. However, the number of respondents feeling like they spend too much time on customer data has more than doubled since last year, from 13% in 2016 to 28% in This has been accompanied by a drop in the number of people saying they do not spend enough time on it. By and large, customer data is getting more attention now than a year ago. However, for more than a quarter of marketers, it may be too much. Businesses need to stop people from getting lost in the data and find ways of locating the information most useful to marketing decision making. 28 % I am spending too much time % I am not spending enough time 61 % I am spending the right time % 29 % 58 % I am spending too much time I am not spending enough time I am spending the right time 9 callcredit.co.uk

10 Marketers are not satisfied with their ability to drive quality decisions Our research revealed that satisfaction with key data capabilities does not match the importance of those capabilities. For example, 40% believe that analysing data to drive quality decisions is critical, yet only 20% are satisfied with their ability to do so. The availability and accuracy of data are two other aspects in which there is a significant discrepancy between capability and importance. 27 % Availability of data 28 % Quality of available data (accuracy) 20 % Accuracy/quality of resulting decisions Necessary skills to analyse data 35 % 40 % 44 % 43 % It s especially problematic when we consider that two thirds (67%) of marketers are feeling pressure from stakeholders to provide accurate real-time data to inform marketing decisions. A large number of marketers simply do not have the capability to adequately do their jobs. 26 % 32 % Usability of data in decisions 29 % Scalability in the business to cope with higher volumes of data 23 % 29 % Fig.5 Gap analysis Consistency of resulting decisions % saying extremely satisfied % saying critical 23 % 28 % Gaining a single view across all data sources 19 % 27 % Scale/volume of available data 19 % 26 % Ability to exploit available data to drive business decisions 25 % Speed of data decisions (slow, semi real time, real time) 25 % Speed of data decisions (slow, semi real time, real time) The Callcredit Marketing Data Report 10

11 Marketers are struggling to understand consumer needs Despite the growing sophistication in how data is collected and used, many marketers still struggle to truly understand their customers expectations. In fact, we discovered stark differences between what businesses believe consumers think and what they actually do. For example, 47% of marketing decision makers believe that over half of consumers have a very high understanding of how their personal data is used by companies. However, only 9% of consumers rate their own understanding as very high, and just 18% rate their understanding as high. Demonstrating that businesses are assuming a much greater awareness of how data is used than is the case. Whereas the truth is that comparatively fewer (52%) customers feel exasperated with this. Similarly, while 62% of consumers claim to be more selective over who they authorise to access their data, 81% of marketers believe customers have become stricter in this regard. These kinds of discrepancies mean that marketers may be addressing the wrong problems. If we look at Fig.6, for example, we can see that customers are far less likely to turn on private browsing when searching online than marketers think. Conversely, customers are far more likely to avoid clicking on, or accessing, promotions than businesses believe. On top of that, marketers regularly overestimate how customers feel about various issues. Three out of every five (61%) believe that customers are frustrated with how businesses access and use their data. 11

12 Fig.6 What are customers more likely to do more of in the next two years? 53 % Turn on private browsing when searching online 28 % Businesses Customers 44 % 20 % Undertake personal credit scoring checks 43 % 35 % Select/deselect opt-ins for additional services online 40 % 41 % Carefully read Ts and Cs when accessing services online/offline 37 % 40 % Turn-off location-based services on smartphones/mobiles 37 % 37 % Select/deselect data sharing options with third parties 30 % 26 % Reject cookies 30 % 47 % Avoid clicking on or accessing promotions online/offline 15 % 15 % Using multiple credit/debit cards for online/offline purchased 11 % 1 % None of above 1 % Other The Callcredit Marketing Data Report 12

13 Many of the methods used to gauge customer expectations are imperfect or superficial. Businesses need more nuanced means of gathering customer insight to avoid creating marketing campaigns based on inaccurate preconceptions. Steve McNicholas, MD, Credit and Marketing Data, Callcredit Information Group It s clear that marketers do not have as clear an understanding of customer attitudes as they like to think. Marketing professionals need to consider more refined means and methods of gaining an accurate picture of consumer expectations. They will then need to adapt their marketing strategies accordingly. Fig.7 Customers and businesses have a difference of opinion, the charts show their respective responses to each statement Businesses Customers 47 % 9 % 61 % 52 % 81 % 62 % Customers have a very high understanding of how their data is used by companies Customers are frustrated by the way businesses access and use their data Customers are selective with who they authorise to access their data The Callcredit Marketing Data Report 13

14 Seven things you can do next Marketers are already doing a lot to make their efforts smarter and more effective. But more obviously needs to be done to better understand customers and what they want. There are many ways that marketing professionals can go about this, but to offer some clarity we ve collected some practical steps below to help get you started. 1. Let customers tell you how they want to be marketed to As marketing becomes a more regulated discipline (particularly with the imminent General Data Protection Regulation), consumer choice becomes crucial. And the easiest way to adapt to customer expectations is to let them tell you what they want. Set up a preference centre so customers can inform you about what they are willing to accept and what an appropriate level of communication is. You can even infer changes in customer preferences from mass mailing list opt-outs, for example. This data can then be enhanced with additional individual, household or postcode level data to tailor more relevant messaging to customers. 2. Be transparent with customers about how you ll use their data Customers understand that giving access to their data is a value exchange. If you inform them about how their data will be used, they re more likely to give you access to it as they know what they might get back in return. But be careful not to come across like Big Brother. Customers might get uncomfortable with the potential variety and depth of information you re collecting on them, so finding the right balance is key. 3. Gear up for measurement from the outset Set up your campaigns so you can truly measure their impact. Incorporate all the paths to conversion in your tracking. Understand where all of your online and offline customer touch points are and how they interact to produce sales or drop-offs. Making the effort to properly measure your campaign means you can figure out what worked and establish a benchmark for future campaigns. 4. Get all of your data in one place... You can t make informed marketing decisions if some of your customer data is siloed away where you can t get at it. You need to pull all the data from every information source into one place in order to have a holistic view of who you re marketing to. This might require doing a full data audit there may be rich assets in your organisation that you re not even aware of. This is particularly important if you are using third party data sources to improve your customer acquisition or targeting. 14 callcredit.co.uk

15 5....but figure out what data is useful and what isn t Sometimes you can have too much of a good thing. With so many sources available, it s easy to get lost in the data. Identify the key features that actually improve the effectiveness of your marketing versus the nice to knows. Use analysis to understand what makes a difference and what doesn t. You could even enrich data sources with additional information to improve your understanding of the customer and their channel or messaging preferences. Getting this right at the outset will reduce the amount of white noise interfering with the success of your campaigns. 6. Find the right expertise to get actionable insight, whether from man or machine People with the analytical skills to drive actionable insight from customer data are hard to come by. Talent is short. But it s also invaluable. Consider significant investment in data scientists they ll be able to spot patterns that will increase campaign effectiveness. Failing that, automated analytics platforms and machine learning can help organisations trawl through the sea of information at their disposal. 7. Make sure your data is accurate Inaccurate data is a major barrier to marketing effectiveness. So regularly cleanse your data to make sure the people you re communicating with are who you think they are. It s also a good idea to get a clear understanding of whether anything has changed about that customer. Are they moving house? Have they just had a child? Did they just start a new job? These are all important triggers that could signal purchase intent, and may often need to be sourced from third party data. The Callcredit Marketing Data Report 15

16 To find out how Callcredit can help you make the most of your data and get closer to your customers, get in touch: Call +44 (0) Or visit callcredit.co.uk #DataTruths Callcredit Marketing Limited, registered in England and Wales with company number Registered office: One Park Lane, Leeds, West Yorkshire LS3 1EP. Telephone: +44 (0) Fax: +44 (0) callcredit.co.uk