4 Barriers to Data-Centric Personalization
Personalization seems like a simple enough concept, right? Wrong. Though the industry has been talking about it for years, very few retail marketers are connecting with customers in meaningful ways. The largest challenge standing in the way of true personalization is data – and that’s no simple feat. Where do you get it? How do you crunch it? And what actionable insights will you draw from it?
New research from Bluecore shows that 65 percent of marketers plan to increase their spending on data-centric marketing in 2016, and 26 percent of those respondents said they plan to increase those budgets by 26 percent or more. Retailers are making the investment, but will those dollars have an impact? There are four key roadblocks facing data-centric marketers:
1. Know when your technology is (and isn’t) working for you. Technology is evolving just as quickly as the data and customer behaviors that are driving it. Two major problems exist in the marketing technology industry: one, marketers attempt to build new technologies on top of existing or sometimes antiquated software platforms to obtain and aggregate data and two, they often simply don’t know how to extract actionable insights from their data technologies. In fact, nearly half of all marketers (45 percent) believe they don’t have the right technology to get insights from their data, and 55 percent turn to existing partners to solve new marketing or data challenges.
The reality is that many e-commerce technologies have evolved into lightweight, frictionless solutions that run alongside existing marketing stack components. More specifically, modern marketing technology systems are often plug-and-play, requiring little more than copying and pasting a few lines of code, and are designed specifically for the task at hand. There's no one-stop solution for a retailer’s every marketing and data need. Multiple partners are a necessity, and those partners need to be able to prove that they’re the best-of-breed in their niche service. If you’re not acting on the data that's being provided to you or it’s not positively impacting your bottom line, that’s a red flag.
2. Hire smarter, not more. In addition to not knowing if their technology is providing the right data, another 73 percent of marketers describe extracting actionable insights from their data as “difficult” or “very difficult.” Dealing with the constant influx of data can be a full-time job – so much so that 68 percent of marketers said they plan to invest in personnel skilled in data analysis. Furthermore, manual tasks continue to be a significant inhibitor in moving the needle on a data-centric marketing paradigm, with marketing personnel tied up with manual labor just to maintain the status quo. As such, more companies are investing in automation technology to reduce manual tasks and free up personnel to market, strategize and leverage data across channels rather than crunch it. In total, 83 percent of marketers are planning to invest in marketing automation this year.
The moral of this story is find technology that empowers the end user and automate as much of the process as possible. If there’s data analysis needed in your organization, find a partner that automates it or does this for you, or hire someone to focus solely on this need. Marketers should be marketing, not fumbling with technology and huge data sets.
3. Prove return on investment. Technology procurement in retail organizations has long fallen under the domain of the CIO/IT manager. With significant growth in platforms capable of accessing and using marketing data in the last three years to five years, the balance of power has shifted to the marketer. As such, marketing executives have persistent pressure to prove the ROI of marketing spend by knowing which levers to pull. Data shows that marketers plan to significantly invest in reporting technology in 2016, with 59 percent of respondents saying that defining ROI is the most significant or second-most-significant driver of their reporting investment. That said, it’s important that marketers continue to invest in top-tier reporting technology to better identify cross-channel ROI and prove the worth of marketing technology to keep up with the digital demands of customers. “How does this help me identify the ROI of my marketing spend?” should be a question that's asked of every vendor marketers employ.
4. Break down your siloed organization. As marketers strive to understand their customers better and present them more appropriate messaging, it becomes more important than ever to break down the silos in a structured way. In fact, personalized marketing leverages data from multiple sources to build and market to a customer profile. Interdepartmental data flow is therefore vital to the success of personalized marketing. Look for ways in which you can break down any existing silos between departments.
This includes developing the infrastructure to build a customer profile you can market to based on the needs, wants and preferences of your customer. This will involve collecting and processing data across all digital channels and integrating it into a few systems. We’re not yet at a place where we can have the ideal – one repository for all customer data that includes a multichannel executional layer – but we’re getting closer. In the meantime, marketers must demand more of their technology partners – and their organizations – and work to align efforts and information across all channels, business units and campaigns.
It’s no secret that marketers are starting to see the writing on the wall as the retail industry prepares to evolve into a personalized marketing approach. Competition and consumers demand hyperpersonalized marketing campaigns, and marketers know more and better data is the key to delivering that. Smarter teams and simplified, agile technologies are the only ways to access that kind of data in a meaningful way. Simply put, email marketing can help to power immediate marketing actions as unique as your customers, so don’t ignore the change, embrace it.
Fayez Mohamood is the co-founder and CEO of Bluecore, a data marketing platform.