By not understanding the value of data and how to get the most out of that data, this leads to large gaps in information that could be used to enhance business results. This is especially important for marketers who rely on data to effectively reach target audiences and convert customers.
As to what marketers can do to reinvigorate stale data processes and facilitate greater customer engagement, Cat Luga, president and chief analyst of Cognetik, a data science and analytics company, outlines the steps marketers can take to re-energize their data. This means tapping into insights in order to drive customer engagement.
Digital Journal: How important is digital transformation for businesses?
Cat Luga: Digital transformation is as important today as it was for shipping companies to start using motor transportation instead of horse-drawn vehicles, or accounting firms to start using computers instead of typewriters. Companies today can’t sustain real differentiation with pricing strategy, supply management efficiencies, or the quality of their products. They need a fanatical focus on customer experience that can only be sustained by a superpower only few have mastered: digital transformation.
DJ: How important is data within this strategy?
Luga: Digital transformation is a superpower because it uses data to make the user experience as relevant as the product being sold. For example, Amazon knows customers need to buy something before they know it, and Amazon makes it incredibly easy to purchase it. This makes the experience as valuable as the product the customer needs to buy.
DJ: Are businesses fully aware of the value of the data that they have at their disposal?
Luga: Businesses are not fully aware of the value of their data because most teams have their own systems and work in silos. Marketers use pre-click data to optimize their campaigns, but may not be fully aware of post-click engagement on the site or app. Product owners use CRM data, but may not be aware of all CRM data available to optimize the user experience for various customer segments.
DJ: What are the consequences of not utilizing the data available?
Luga: If businesses do not utilize data they have available, user experiences are not personalized, marketing messages are irrelevant, and all users are treated with the same value. This leads to lackluster spending for the most valuable users and too much spent on users who are too expensive to convert. Ultimately, businesses won’t bring in enough new users or keep the ones they already have because the user experience is not differentiated enough.
DJ: How can marketers effectively use business data?
Luga: Marketers need to expand their view of the user by using data stitching tools (e.g. Cognetik Data Streams or others) to see the impact their tactics have on lower funnel engagement. It’s not enough to optimize for traffic. At a minimum, marketers should optimize for engagement that leads to conversion and ultimately higher lifetime value.
DJ: How can this data be used to boost customer engagement?
Luga: If you’re tracking the user from first ad exposure all the way to multiple conversions, you now have data to do attribution analysis and identify the real levers of optimization. This might confirm your optimization tactics or can retrain the model of how users are acquired and converted. Performing an attribution analysis will determine the weight of influence of marketing messages separate from the discount of promotions, the actual user experience on the app or site, brand factors, or separate from economic/seasonal/environmental factors. Businesses can then use these levers from their analysis to drive profitable lifetime value.
