Digital home assistants and wearables have become more popular than ever, collecting detailed consumer information. In addition to the data explosion, recent public offerings of Palantir and Snowflake highlight the emergence of companies focused on big data analytics. Yet, despite enterprise leaders’ and researchers’ optimism in the potential that data holds, there is still a disconnect between the volume of data created and the ability of organizations to harness that potential to drive growth. In a new article in the Journal of Marketing, our research team reviews factors that contribute to this disconnect, drawing attention to organizations’ tendency to focus on data that are easier to access and measure and highlighting overlooked data sources that offer considerable opportunity to support growth.
To examine how marketing data can be leveraged to drive organizational growth, we look at different ways value can be created for the organization. Drawing on the customer equity framework, we review how marketing data may support growth in customer acquisition, customer relationship development, and customer retention.
With regards to customer acquisition, we probe the potential for organizations to make use of biometric data to support acquisition efforts, which can aid marketers in identifying the best time at which to engage prospects. We also identify opportunities to use social network data to make acquisition efforts more efficient and effective by tapping into the existing social ties to spread marketing messages to a larger audience.
In developing customer relationships, we discuss what can be gained from identifying and predicting trends, allowing marketers to stay ahead of the curve with regards to product and service offerings. We also highlight how customer-level competitive intelligence can be gathered and used to deploy marketing efforts where they may be most effective in growing relationships.
To support customer retention, we illustrate the potential to take advantage of unstructured data such as call center logs and videos of service interactions, providing support to firm representatives based on real-time data gleaned from the interactions. We also discuss the value that can be derived from data that support causal inference and how this may be used to support proactive churn mitigation efforts.
While we see tremendous potential in tying marketing data to firm growth, we cannot ignore the challenges to implementing a data-driven growth strategy.
Specifically, how does an enterprise move from obtaining control over data and deriving relevant insights to implementing a data strategy?
For marketing data to drive organizational growth, marketers must consider data as a component of a strategy problem.
That is, how can emerging sources of data be brought into alignment with an organization’s growth strategy? To do so, we call for not only quantifying the value of marketing data, but also recognizing the full cost associated with leveraging data.
The latter point has been brought to the forefront in recent documentaries like The Great Hack and The Social Dilemma, highlighting the potential use and misuse of consumer data and forcing us to question what we consider appropriate uses of data.
With regulators taking action to protect consumers, from the General Data Protection Regulation (GDPR) in the European Union to the California Consumer Protection Act (CCPA) and the proposed California Privacy Rights and Enforcement Act, marketers will need to grapple with balancing growth through data with consumers’ rights.
Go to the Journal of Marketing
Source: Rex Yuxing Du, Oded Netzer, David A. Schweidel and Debanjan Mitra, 12.3.2020. AMA.