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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

GPO Box 3895 Sydney NSW 2001

[email protected] adma.com.au

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BUSINESS SUCCESS THROUGH DATA-DRIVEN INSIGHTS Unleashing the power of your customer’s voice through data INTRODUCTION IT IS WIDELY RECOGNISED THAT D...

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