BUSINESS SUCCESS THROUGH DATA-DRIVEN INSIGHTS Unleashing the power of your customer’s voice through data
INTRODUCTION IT IS WIDELY RECOGNISED THAT DATA HOLDS THE KEY TO UNLOCKING AN IN-DEPTH UNDERSTANDING OF CONSUMER BEHAVIOUR. HOWEVER, MANY BUSINESSES HAVE A LONG WAY TO GO TO MAKE THE MOST OF THEIR DATA. A LOT OF WORK STILL NEEDS TO BE DONE TO FINE TUNE BOTH THE DESIGN AND IMPLEMENTATION OF DATA STRATEGIES. Questions remain about the best ways to structure marketing teams in this new world order of data. Organisations are experimenting with different resourcing models: some building analytical teams in-house, while others are leveraging technical expertise and market intelligence from external suppliers. We are learning that despite differences in the way organisations choose to implement their data strategy, those who are successful share specific common characteristics. These businesses have: A robust, clearly-defined data strategy Access to substantial analytical skills Data strategists with the right mix of commercial intelligence, communication and broad analytical skills to provide strong connections between business objectives and its use of data Effective leadership that actively influences the C-suite and works productively across internal silos Intellectual curiosity and courage to ask insightful questions that uncover intelligence that positively affects the business.
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IN THIS PAPER WE DISCUSS: Data’s role as the customer’s voice The future of free-service business models The best way to design your data strategy Effective ways of infusing data throughout your organisation The skills needed to implement your data strategy effectively Specific internal communications needed to leverage your data investment How to find the right balance of skills by mixing in-house with external suppliers Ways to improve the connection between your data scientists and marketers A possible picture of the ideal data function.
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DATA HAS BECOME THE VOICE O THE IMPORTANCE OF DATA HAS CONTINUED TO GROW UNABATED FOR GOOD REASON: DATA HAS COME TO REPRESENT THE CONSUMER, AND THEIR VOICE. FOR MANY BUSINESSES IT HAS BECOME THE PRIMARY TOOL THEY USE FOR LISTENING TO CUSTOMERS, UNDERSTANDING THEIR CURRENT NEEDS, AND PREDICTING FUTURE DEMAND. DATA STRATEGY HAS BECOME A DIFFERENTIATOR BETWEEN BUSINESSES An organisation’s data is one of its most powerful assets. As with any other asset, managing it effectively has become a way for consumers to differentiate between businesses competing in the same markets. It is therefore more important than ever that you manage your data as you would any other core business tool. You need a clear, effective strategy and thorough implementation plan to maximise the benefits you derive from your data.
GOLDILOCKS OF DATA: TOO MUCH, TOO LITTLE, JUST RIGHT The amount of data you can capture for analysis has never been greater. This deluge of data has produced some unexpected consequences: Although data-rich organisations benefit from the potential to understand a lot about their customers, there are downsides to having so much data. Not only can the costs of managing and analysing large volumes of data be high, but also, with so much data to choose from, it’s easy to become distracted and confused about where the priorities lie for analysis. Data-poor businesses do not necessarily need to be limited by their apparent lack of data. With limited data to work with, their analysis is focused and inexpensive. These businesses are often more open to investing in their data strategy through partnerships with external research companies. These firms can identify other groups of consumers with similar characteristics (qualified leads), and uncover insights from larger sets of data.
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E OF THE CONSUMER
MORE IS NOT ALWAYS BETTER Without a clearly-defined data strategy, there is a tendency to collect everything you can find out about your customers. This approach is costly and inefficient, as it is not driven by an overarching data strategy. “Just because you can collect the data, doesn’t mean it’s going to be meaningful and useful.” A better approach is to focus on quality interactions with customers. There is no need to over-engage customers.
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THE ARGUMENT FOR FREE-SE R FREE-SERVICE BUSINESS MODELS ARE THOSE WHERE THE CONSUMER MAY OR MAY NOT PAY A FEE TO ENJOY SOME OR ALL OF THE SERVICES PROVIDED. Currently there are two free-services
Moreover, there is strong demand
Data problems reflect poorly on
business models:
for free-services from consumers.
reputation and represent a risk
The bottom line is: consumers
that needs to be actively managed.
want to use ‘free’ services, and are
Customer experience continues to
comfortable with the value exchange
drive perceptions. When customers
offered by this business model.
have negative experiences as a
1 Free service available to all, plus a premium paid-for service that includes exclusive extras. Examples include Dropbox and Evernote. 2 Advertising model, where the service is provided free, but contains advertising. Spotify, Pandora and Facebook use the advertising model. These two business models can only continue if the data they capture, and the insights they generate are monetised.
FREE-SERVICE MODELS WILL CONTINUE TO BE POPULAR There are a number of specific characteristics that make free-service models an attractive way of doing business. They provide a way to: Build a new business
result of having provided their data,
FUTURE DEVELOPMENTS FOR FREE-SERVICES
they will react. In some cases this is
Consumers know their data has value,
however, if their experience has
and that once they have given it away,
been positive, most customers will
their personal information belongs to
continue to openly share their data.
the company they gave it to. Most consumers accept that giving
There will always be customers who are happy to trade their data
their data away is the price they
for lower prices, and there will
pay for better products, services
always be those who do not want
and customer experience. For
to reveal their data at any price.
example, Google services can now
Paying to opt-out may become
link your calendar and location
more prevalent. ‘Do not track
information to tell you how long
me for a fee’ could become
it will take to travel between
an attractive option for some
meetings.
customers.
Customers recognise the benefits of more targeted advertising that comes from data exchange.
Grow a customer base
Free-service business models could
Develop trust in a brand
face changes as consumers become
Obtain customer insights.
as simple as blocking advertising,
more active participants in the exchange of their data.
THE POSSIBLY UNINTENDED CONSEQUENCE OF THE RISE OF FREE-SERVICES Customer’s expectations have risen significantly. We now demand at least some degree of personalisation in our customer experience, whether the product or service is free or not.
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E RVICE BUSINESS-MODELS DATA ESSENTIALS: RULES OF THUMB The way you treat your customer’s data reflects directly on your organisational culture and reputation. It’s critical therefore that you behave in a transparent way, being open and honest about the information you collect about customers and how you use it. Social media provides consumers with a platform and audience outside your control. It makes sense therefore to provide channels for capturing customer sentiment, comments and negative feedback, so you have an opportunity to deal with issues as they arise, out of the public eye. Consumers are savvy. They know their data is valuable to business, so you must offer a fair exchange of value to obtain it. Today’s customers need compelling reasons to provide you with their data. When you collect data, customers expect to be treated more personally in exchange. If you are not able to deliver a better product or service, which demonstrates you know the customer as an individual, it may be better not to collect their data. Focus your investment on your most profitable customers. Direct your primary data analysis at quantifying the value of your customers, and identifying those from whom you derive the most profit.
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SUCCESSFUL BUSINESS STRA T PRODUCE EFFECTIVE DATA ST R
FOR A DATA STRATEGY TO BE SUCCESSFUL, IT MUST SUPPORT OVE RA ALIGNMENT BETWEEN THE OVERALL COMMERCIAL STRATEGY OF A BU Successful business strategies define objectives at a granular level. For example, the overall business strategy will define the objectives, such as improving customer loyalty, but it will also define what loyalty mean in terms of measurable outcomes. These specific, measurable outcomes can then be fed into the objectives of each business unit. Effective data strategies are derived directly from the overall organisational strategy. Their outcomes mirror those of the businesses. Before formulating a data strategy, objectives have been agreed to at a business level. These objectives flow directly into your data function, and serve as the starting point for designing your data strategy. This approach ensures your data strategy aligns completely with your overall business strategy. To find out more about effective ways to design your data strategy, please refer to the 2015 white paper, Harnessing the value of your data.
DATA STRATEGY DESIGN Designing your data strategy is an iterative process. It begins with your organisational goals, and then moves on to assessing your data:
GOALS
FEED BA
CK
• examine all your touch points • make an inventory of all the data you’re capturing • determine what you’re going to do with the data you’re capturing. It’s likely that what you’re capturing won’t match your needs completely. You will need to modify your strategy to fit the reality of your situation.
DA TA
TE
CH
N
OL OG Y
• prioritise any new points of data you’re going to capture. You can’t have it all, but your strategy can help you determine which data points to focus on.
TEST
IMPLEMENT
LE
OP
PE
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A TEGIES T RATEGIES
VE RALL BUSINESS GOALS. TOO OFTEN THERE IS ONLY SCANT F A BUSINESS AND THE DATA STRATEGY THAT SUPPORTS IT. ORGANISATIONAL CULTURE CHALLENGES DATA STRATEGY IMPLEMENTATION Your organisational culture can
Just what does marketing do?
Who owns your data?
create challenges to smoothly
Common misunderstandings
Although IT has been the traditional
implementing your data strategy.
about roles can make it difficult for
custodian of an organisation’s data
Data is a relatively new function, and
marketing teams to make the shift
(IT typically own the CRM system), in
as such, it can be difficult to fit into
from being seen as ‘the coloured
order for its value to be fully realised,
existing organisational structures.
pencils department’ to a strategic
it needs to be shared beyond the IT
There are a number of key questions
function that feeds business insights
function or department. For it to be
that need to be answered and
into the organisation. Data and
of commercial value, data needs to
understood across the organisation
analysis have traditionally fit in IT or
be analysed by those with intimate
in order for a data strategy to be
accounting functions. Transitioning
knowledge of:
executed effectively.
these key skills and responsibilities into marketing can be made smoother by explaining to the organisation as a whole: why they need data why they should be using it what their role is in capturing data how the business benefits commercially from using its data.
the business the market that its products and services compete in consumer behaviour. These areas of experience fall beyond the traditional scope of the IT function. It therefore makes sense that ownership for data be shared beyond IT.
The solution to this problem is communication. Marketers need to do what they do best, and that is market the marketing team.
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Where does responsibility for data strategy lie?
Where do data skills fit in the organisational structure?
Data strategy is derived from business strategy. And
A range of skills is needed to make effective use
once a data strategy has been established, appropriate
of an organisation’s data. Experts from across the
technology is then applied to achieve its objectives.
organisation need to be brought together into one team.
Responsibility for data strategy therefore lies with
As with project-based teams, resources from marketing,
those responsible for setting and delivering the overall
product or services, finance, operations and IT all need
business goals. This can be interpreted narrowly or
to be actively involved in delivering your data strategy.
widely across the organisation.
With all the skills in the one team, the connection
Although IT is intricately involved in delivering an
between technical skills used in analysing raw data,
organisation’s data strategy, it does not necessarily
and commercial skills used to apply data to support
make sense for IT to be responsible for defining the
marketing and business objectives can join with a
strategy. Technology in of itself is not a data strategy.
common purpose. The ‘cross-pollination’ between job
Rather, it is the tool with which solutions to data
functions that occurs in data teams helps build bridges
questions can be answered.
and understanding across silos. When diverse functions understand what each other needs to perform their particular roles, not only can the two functions work together more efficiently, but they will work together more harmoniously to benefit the business.
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IMPROVING THE GENERAL LEVEL OF UNDERSTANDING ABOUT DATA CAN HELP AVOID COMMON MISUNDERSTANDINGS Technology has changed very quickly, enabling
In the quest for precision, quick solutions can be
businesses to know more about their customers than
overlooked. There is often a lack of appreciation of the
was possible even five years ago. Although our collective
benefit of learning things incrementally; building on
thinking at the cutting edge has progressed, many of the
your experience.
day-to-day systems we rely on have not caught up. This poses challenges to those responsible for implementing data strategies today. A lack of understanding by business of how its data
When ‘everything is possible’ there is a tendency to become overly detailed. When your internal clients know how detailed your data can get, they often ask for extremely specific data, when often a wider sample
works and what it can achieve leads to unrealistic
would be faster to analyse, easier to use, and provide
expectations about what a data strategy can deliver.
sufficiently insightful answers.
Internal clients can think solutions are easy to obtain ‘at the touch of a button’.
As expert communicators, the marketing team can improve the overall understanding of the function of data and its role in an organisation.
DATA HAS TRANSFORMED THE ROLE OF MARKETING Data strategy has revolutionised the role of marketing. It has changed the marketing function from one of ‘marketing push’ to one of ‘marketing pull’, or ‘engagement based upon customer experience’.
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SKILLS NEEDED TO IMPLEMENT Y
DATA-DRIVEN ORGANISATIONS SUCCEED WITH THE RIGHT COMBIN AT INTERNAL TEAM OF TALENT, AND DRAW ON APPROPRIATE EXTERN AL THE COMMERCIAL LENS PROVIDES FOCUS FOR EFFECTIVE IMPLEMENTATION
ALL DATA
MERCIAL FOCUS COM
DATA STRATEGY DATA ANALYSIS DATA EXTRACTION DATA COLLECTION
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INTERNAL RESOURCES
EXTERNAL RESOURCES
LEADERSHIP
T YOUR DATA STRATEGY EFFECTIVELY
BIN ATION OF SKILLS. THEY HAVE AN ADEQUATELY RESOURCED RN AL SUPPLIERS TO FILL SPECIFIC GAPS. LEADERSHIP’S ROLE Today’s marketing team requires decisive leaders who
Balancing curiosity with commercial direction. Your
can clearly articulate business strategy. Effective leaders
understanding of how to use the commercial lens will
are strong communicators who provide a direct, two-way
help you lead your analysts down paths of investigation
channel between the C-suite and marketing team.
that support overall business goals.
Data now drives the majority of marketing activities,
Use your data to guide your activities. By embedding
and as a result, we need to broaden our skills to keep
specific, measurable targets in your marketing
up. To lead a marketing function you need to have
program you can use attribution modelling to
expanded your skill set to include:
determine the effectiveness of each activity. This more
An understanding of what your organisation’s marketing technologies can achieve. You need to ensure you are using the tools you have to their fullest potential to deliver the greatest return on investment.
detailed modelling enables you to more carefully measure your return on investment from each activity, and incrementally improve the overall return-oninvestment generated by your marketing function.
Courage to support curiosity. New insights into consumer behaviour can be uncovered through original research by analysts. As an effective leader, you should provide your team with sufficient leeway to investigate new lines of enquiry.
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INTERNAL COMMUNICATION SKILLS REMAIN CRITICAL
WHEN EVERYONE IN YOUR ORGANISATION SUPPORTS YOUR DATA STRATEGY, YOU CAN ACHIEVE EXCEPTIONAL RESULTS. THE MOST DIRECT WAY OF ENGAGING EVERYONE IS THROUGH EFFECTIVE INTERNAL COMMUNICATIONS.
Deepening the relationship with customers Your internal communications should focus on connecting the organisation with the customers it serves. You should aim to: 1 Develop a common view across the organisation of who your customer is, their likes and dislikes, what their needs are and why they choose to interact with your business 2 Deepen the understanding of why customers come to you and what need they are hoping to address. This will enable everyone in the business to focus on providing products and services that maximise the benefits customers receive from their engagement with your business. 3 Help to build an understanding that data is your most important asset. If you don’t understand who your customers are at a deep level, you cannot create brand loyalty. 4 Share customer insights across business units. Silos can be broken down when business units are able to learn from one another, with the shared purpose of better understanding the organisation’s customers.
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Disseminating immediate information about customer sentiment It’s important that information and insights generated by your data strategy are available quickly and easily to those who need them. You should ensure that your internal communications strategy supports the day-to-day operations of your data function. Your internal communications strategy should provide: 1 A smooth connection between the business and data analysis, so quick answers to high-level questions can be accessed easily. 2 Regular data analysis to departments as part of their every-day internal communications news feed. 3 Feedback of the results of analysis, as well as any commercial opportunities and insights identified from the data analysis process. 4 Signals that directly relate to KPIs. Having built data into KPIs at a business and individual level, your internal communications need to provide feedback and tracking against those goals.
SPEAK THE LOCAL LANGUAGE TO ACHIEVE ENGAGEMENT Different parts of your business will use their own language with phrases and acronyms that are meaningful to them. To achieve understanding and respect, you need to speak the local language, using terms that are relevant.
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KEY AREAS TO ADDRESS IN YOUR INTERNAL COMMUNICATIONS ARE: Common misperception
Communication required
“If we’ve captured the data, we should be
Data requires manipulation and analysis to become useful
able to use it quickly and easily.”
information. Legacy issues and the complexity of existing systems can make it difficult to extract data for analysis.
“Only very detailed analysis can provide accurate answers.” “It’s better to wait for answers to specific questions than to draw conclusions from broader analysis.”
Data analysis can be refined incrementally High-level data analysis might be sufficient to answer basic questions quickly, before detailed modelling can be done. These initial high-level enquiries can help refine questions and the data analysis required to provide meaningful answers.
“Data and data strategy have nothing to
An overall roadmap for data strategy implementation needs to be
do with most people’s roles, rather, it
given priority by the C-suite.
is something done by marketing or the C-suite.”
The link between broad business strategy and tangible priorities for each area of the business needs to be made. Clear data strategies should be applied and communicated to each line of business, tailored to their own needs.
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THE BEST MARKETING IN THE WORLD CANNOT SELL BAD PRODUCTS OR SERVICES Although data can significantly improve business performance, it cannot overcome the challenges of bad products and poor services. Currently we have a very output-centric view of the world. We measure in terms of commercial output goals that are relevant to the organisation. We need to shift to customercentric metrics that more closely align to measure the quality of the customer experience.
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LEVERAGING DATA SKILLS BEYOND YOUR BUSINESS Invest in listening
Partner with data specialists
All organisations, regardless of size, compete in markets
When you have a small customer base, it can be difficult
with others. Although your data can indicate what’s
to find out more about them beyond their contact
going on outside your business, it will never be able to
information. Generating insights from limited data can
provide you with a complete picture. To find out what’s
be very expensive. There are businesses that specialise
going on in the market around you, you need to actively
in filling your data gaps and providing you with insights
listen to information beyond your own doors.
into the characteristics of your customer base, drawing
Part of your data collection strategy should include
from larger pools of similar customers.
active monitoring of your market for intelligence. It will
Partnering with a data specialist can be a cost-effective
help you understand what is important to your customer
way of learning more about your audience. Those with
base, and how they are likely to behave in the future.
very large, broad databases, and years of analysis will be
Monitoring other segments, such as another geographic location, can also provide useful insights, and should not be overlooked as part of a comprehensive market
able to tell you far more about your audience and their behaviours than you are likely to be able to find out on your own without spending a lot of money.
intelligence program.
COMPLIANCE MATTERS Although the law lags behind technology and the ways we use data, it is essential that brands operate with integrity when it comes to using customer information. Consumers are smart and more aware now of the value of their data and how it is being used. They expect to be in control of their own information, and be given the opportunity to provide consent before it is used. To ensure these expectations are met, it is vital that data systems are designed in a way that protects customers, and regulates the use of their data. Marketers need to work closely with their legal teams to ensure that they are fully versed in the that relates to privacy and data. Where gaps in legislation occur, marketers should act conservatively, following the spirit of the law, protecting the rights and privacy of their customers.
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THE DATA SCIENTIST: WHERE ART AND SCIENCE MEET Data scientists combine a unique set of skills that unlock the commercial potential of your organisation’s data. They are both creative in their marketing approach and scientific in their analytical practice. Successful data scientists balance a range of skills including: analytics predictive modelling and data manipulation, while at the same time understanding how data drives commercial decisions in the business. A true data scientist is able to: translate a business problem into an equation that can be solved using data, and realise the potential in an existing data asset.
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DATA ANALYSIS GREAT DATA ANALYSIS COMBINES THE ART OF STORYTELLING WITH THE SCIENCE OF STATISTICS. Finding someone who can make the connection between your data and the journey your customers experience can be like finding a unicorn. Statisticians who have both commercial awareness and strong communication skills are rare. Acknowledging that you are unlikely to find the ideal mix of skills in any individual is the first step to solving this problem. GETTING THE MOST OUT OF YOUR ANALYSTS Be reasonable. Be mindful of the communication
BUILDING BETTER CONVERSATIONS BETWEEN DATA SCIENTISTS AND MARKETERS
challenges most analysts face, and adjust your
Greater understanding and appreciation of each other’s
expectations accordingly. Build flexibility into their roles
roles begins with communication. Marketers and data
so they can be creative with your data. Enable them to
scientists can take active steps to improve the way they
explore avenues of enquiry and also further develop their
interact by getting to know one another.
technical skills. Embrace curiosity. It leads to uncovering insights and new opportunities. Consider testing theories manually. If the theory is
Common goals provide the basis for common purpose. Discussing how each area contributes towards serving customers can help build respect. Shifting the focus from a product push to a customer
correct, you have proved the method is accurate and
pull will help teams focus on their commonality of
the outputs are useful; you can then consider investing
purpose. Project teams that span both functions,
time and resources to automate the system.
designed to solve specific problems, will help improve
Balance curiosity with KPIs, so your analysts achieve what you want them to.
understanding. Analytics and marketing are not mutually exclusive. For data to be useful, it needs to be infused with creativity and ideas. Conversely, marketing is not effective without the insights produced by data analysis. Marketing can begin by learning how to ask the right questions: ones that are directly linked to business objectives. Marketers need to learn the language so they know what to ask for.
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HARDWIRING STRONG COMMUNICATIONS IN YOUR DATA STRATEGY
COMMUNICATE RESULTS OF ANALYSIS AND COMMERCIAL OPPORTUNITIES IDENTIFIED
COMMUNICATE DATA STRATEGY
DATA ANALYSIS
COMMUNICATION/ ENGAGEMENT FOR DATA CAPTURE AND EXTRACTION
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DATA STRATEGY ESSENTIALS 1. DEFINE YOUR GOALS 2. IDENTIFY THE OUTCOMES YOU NEED TO DELIVER TO REACH THOSE GOALS 3. DESIGN YOUR DATA STRATEGY AROUND YOUR ORGANISATIONAL GOALS 4. FIND THE IT SOLUTIONS TO DELIVER YOUR DATA STRATEGY
test your processes first manually to see the method you’re
proposing is possible, and that the outcome is meaningful. If it works, then automate. Invest in only what you need, rather than buying the system and hoping the outputs will meet your business needs.
once you have invested in a particular IT solution, it can be
tempting to collect as much data as you can. The problem with this approach is that you can end up trying to find something interesting from within a very broad set of data. You are looking for answers without knowing what the question is. A better approach is to lead with a data strategy: identify the questions you need answered, and then build the IT solution to address those needs.
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Without a clear data strategy in place, significant resources can be spent investing and supporting systems that don’t produce the information your business needs to make decisions. Moreover, these systems will not achieve a positive return on investment.
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THE IDEAL MARKETING TEAM: H THE RISE OF DATA’S IMPORTANCE HAS CHANGED THE COMPOSITION OF THE IDEAL MARKETING TEAM. DATA HAS INTRODUCED A NEW SET OF SKILLS TO THE MARKETING FUNCTION, AND IS CHANGING THE STRUCTURE OF MANY TEAMS. OBSESSION WITH YOUR CUSTOMER REMAINS A PRIORITY
SIZE DOESN’T MATTER
The ideal team contains marketers who:
important for organisations to have their own in-house
are immersed in understanding the customer’s experience at all points along their journey develop deep relationships with customers, interpreting changes in the voice of the customer, feeding the change back into the organisation,
With the growth of specialist data services, it is now less team of analysts. As Laura Prophet of BusinessMinds Australia points out in the following case study, you are better to focus on understanding what skills you need, and bring experts in as you need them, rather than scaling up your internal function.
and adjusting or re-shaping the business’s response accordingly.
CURIOSITY WILL MAKE THE DATA FUNCTION OF YOUR MARKETING TEAM EXCEPTIONAL The best data teams are: Intellectually curious, and keen to ask the question ‘why?’ Curious about their data and how they can use it in different ways to find out more meaningful uses Courageous, following their instincts to pursue unconventional lines of enquiry to uncover valuable insights for the business Actively look for business opportunities through their knowledge of an organisation’s data.
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M: HOW TO BUILD A DREAM TEAM THE DREAM TEAM The ideal marketing team contains: 1. People with the right combination of a. analytical skills b. psychological insights and social media skills to understand and interpret the customer’s journey and the effect of their sphere of influence on behaviour c. communication skills and d. commercial intelligence 2. Clear leadership 3. Curiosity: the ability to ask why. a. Data strategy needs to begin with curiosity. 4. Doers: people who a. Take responsibility for commercial outcomes b. Are committed to understanding and improving the customer journey c. Continue their own education in both technology and marketing 5. KISS: People who keep things simple, and don’t overly complicate things.
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RESOURCING YOUR DATA FUN C AN INTERNAL CENTRE OF EXCELLENCE OR A NETWORK OF EXTERNAL SUPPLIERS.
It is difficult for most organisations to afford the resources they need to analyse their data on a fulltime basis. Regardless of your budget, technical skills are now in such high demand it is difficult to get quality resources. Moreover, technology is changing at such a rapid pace that it makes it difficult to retain up-to-date skills within an organisation.
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Specialist data research businesses can help fill the gaps in your team. The question then remains: which parts of your data strategy do you perform in-house, and which parts do you outsource?
N CTION
THE IDEAL SYSTEM IS A COMBINATION OF EXTERNAL AND INTERNAL RESOURCES
APPLY A STRATEGIC MINDSET
The ideal system is an internal system that everyone
function, you should approach the problem with
can access and use to answer quick, straightforward
strategic intent.
questions. This system can be stretched by an external supplier who has more sophisticated tools and analysis to perform complicated queries on your data. For this ideal system to operate well, your internal team needs to be knowledgeable enough to ask the right questions, and understand what can and cannot be drawn from the data and systems you are operating.
When you are deciding how to resource your data
Decide what you are going to analyse, and then choose the system that most closely meets your needs. Don’t be sold on a system first and then try to make it fit your business needs. Improve your existing resources where possible: – Look at ways you can up-skill your existing talent – Consider introducing more soft-skills training for your data scientists Where gaps exist in your data function, consider both external and internal solutions. Decide on your mix of in-house and external resources on the basis of what is the best way to meet your strategic goals, both data and organisational.
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CASE STUDY
LAURA PROPHET, DIRECTOR AT BUSINESSMINDS AUSTRALIA, SHARES THE BEST MIX OF INTERNAL AND EXTERNAL RESOURCES. FINDING THE RIGHT BALANCE OF INTERNAL AND EXTERNAL RESOURCES When should a business consider outsourcing parts of its data function? Every business is different, however, businesses benefit the most from outsourcing when: you’re looking at doing something new that requires specialist technical skills. Predictive modelling and establishing business triggers are areas where it often makes sense to get external help. you are setting up a new model that is complicated and beyond the skills of your existing staff; temporarily buying that expertise in makes a lot of sense. Establishing processes on structured data or where you’re performing a new type of analysis on your data often benefits from expert help.
there are peaks of work. Rather than hiring an additional full-time employee, it can be more costeffective to bring in temporary talent to get through peaks in work flow. For example, if you have a number of campaigns launching at the same time, additional resources just at that time can be very helpful. Data cleaning companies can come in and quickly rectify gaps in your data, such as incomplete names and addresses. Although you can to do this process internally, it’s usually a lot more cost-effective to outsource. Data companies also offer lead services, where they identify other customers with characteristics similar to your own, making them a useful source of qualified leads. Are there any particular types of organisation that benefit more than most from outsourcing? Small businesses and start-ups tend not to have the specialist skills required for complicated data analysis in-house. When you’re small, you need people who can hit the ground running, with minimal training because your staff often have less time for training others given the frenetic pace of start-ups.
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ARES HER THOUGHTS AND EXPERIENCES AROUND FINDING
Which types of benefit can businesses expect from outsourcing?
Do you have any specific advice for companies looking at outsourcing?
The right suppliers will bring with them up-to-date
Outsourcing support with your data is no different from
knowledge of what is current market best practice
outsourcing other strategic business functions; you
in their field. In addition to identifying gaps in your
need to be clear about your objectives and manage your
team, they can often help you work out the best way of
suppliers carefully.
organising your existing analytical resources.
Make sure your supplier understands exactly what you
When external suppliers work with your own team, they
want to achieve –both strategically and tactically. You
share knowledge from other projects they have worked
don’t want them going off on tangents or analysing
on. This transfer of skills will benefit your in-house team.
things that aren’t commercially useful to you.
Are there things you wouldn’t recommend outsourcing? Your high-level data strategy isn’t something you can outsource. However once you have your high-level data strategy in place and you have quantified exactly what it will deliver,
Ensure your data is protected: – Check you have provided them with access to all the data they need to perform their role – Ensure there are clear rules around who can access your data and how the data can be used – Make sure the supplier understands which fields
you can then start to look at how you’re going to flesh
in your data relate to privacy, so any extracts they
out and implement your data strategy, and explore the
perform comply with your opt-out policies.
internal and external resources available to help you achieve those goals. A combination of internal and external staff works well for strategic projects to ensure internal guidance and involvement.
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CONCLUSION AS THE MODERN PROXY FOR THE CUSTOMER’S VOICE, YOUR ORGANISATION’S DATA HAS BECOME ONE OF ITS MOST IMPORTANT ASSETS. THE WAY YOU MANAGE YOUR DATA FUNCTION DIRECTLY AFFECTS YOUR ABILITY TO UNDERSTAND YOUR CUSTOMERS AS WELL AS THEIR NEEDS AND BEHAVIOURS. Consumers understand the value of their data and are becoming empowered with new ways of controlling how their online activities are monitored and the ways their individual data is used. Marketers need to think carefully about what information they collect. If you’re not able to offer your customers a benefit or value in exchange for that information, you might be better off not collecting it in the first place. The primary purpose of your data function is to support your overall business goals. Your data strategy should directly reflect your business objectives, providing a link between business strategy and outcomes through measurement. As a conduit of the organisation’s strategy, your data team need to be highly effective at internal communications.
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In addition to strong communication skills, your data team needs robust analytical skills to be effective. Managing these two diverse sets of skills is a central challenge for leaders. Deciding which skills to maintain in-house, and which to outsource requires careful consideration. There is no single model that fits all organisations. However, it can be said that at certain times, most organisations will benefit from external specialist help. As technology unfolds offering marketers more ways to monitor consumer behaviour, managing data well will become increasingly important. We are already seeing consumers deciding which organisations they will provide patronage to on the basis of the benefits their business’s data systems provide. Whether it’s as seemingly impersonal as recommendations for similar items on Amazon, or highly-targeted advertising on Facebook, managing your data function well is fundamental to achieving your overall business goals.
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ACKNOWLEDGEMENTS This white paper is a result of the experience, ideas and thought leadership generated by they ADMA data expert group think tank. These invitation-only facilitated workshops explore topics related to our pillars: data, technology, content and creative with customer experience at the centre. With thanks to the members of the ADMA data expert group listed below.
Jeff Evans
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VP Digital, APAC Epsilon
Simon Edwards Head of Market Research and Insights Marketing, Commonwealth Bank
Leanne Stagnitta
Brad Martin
General Manager, Customer Analytics, Research & Development Technical, Allianz Australia
Head of CRM & Consumer Analytics, Tabcorp
Alex Burrows
David Fong
Analytics Senior Manager, Accenture
Head of Analytics & Strategy, eBay Australia & New Zealand
Laura Prophet
Stuart Jarvis
Director, BusinessMinds Australia
Marketing Manager - CRM & Insights, David Jones
Con Georgelos
Michael Mocatta
Head of Analytics, News Ltd
Strategic Solutions Director, Marketsoft
Matt Zimmerman
Greg Nichelsen
Director of Loyalty Marketing & CRM, Orbitz
Executive Manager Customer Analytics, Suncorp Group
Carl Oldham
Hamish Hartley
Planning Director, The Works
Data Strategist, OgilvyOne Sydney
Dan Richardson
Andrew Newell
Head of Data & Targeting, Yahoo7
Head of Strategy, Datalicious
Marcelo Ulvert
Michelle Sherwood
Managing Partner, Cohort Digital
Head of Red Planet, Commercial, Qantas
Branko Ceran
JJ Eastwood
CIO, Cancer Council NSW
Managing Director - Australia, Rocket Fuel
Luke Brown CEO & Founder, Affinity
WRITER AND RESEARCHER: Charlotte Spencer-Roy Copywriter
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ADMA WHITE PAPERS
Designed to inform decision-making executives about the latest developments in an area of best-practice marketing, we include examples of what can be achieved, how it can transform the operations of an organisation, and the main issues you need to consider when applying the principles, practices and technologies. To find out more about ADMA and our market-leading insights, please visit us at adma.com.au.
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ABOUT ADMA
The Association for Data-Driven Marketing and Advertising is the principal industry body for information-based marketing and advertising and is the largest marketing and advertising body in Australia. ADMA is the ultimate authority and go-to resource for creative and effective datadriven marketing across all channels and platforms, providing insight, ideas and innovation to advance responsive and enlightened marketing. We
represent the new era of marketing and advertising
We
signify the full spectrum
– From marketing to advertising – From effective to creative – From above to below – From measurable to engaging. ADMA has over 550 member organisations including major financial institutions, telecommunications companies, energy providers, leading media companies, travel service companies, airlines, major charities, statutory corporations, educational institutions and specialist suppliers to the industry including advertising agencies, software and internet companies. © 2016
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Registered Office Association for Data-driven Marketing and Advertising
Level 6, 50 Carrington St Sydney NSW 2000
T +61 2 9277 5400 F +61 2 9277 5410
ACN 002 909 800 ABN 34 002 909 800
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[email protected] adma.com.au