Real-time Data is the Engagement Currency of the Future
Marketers wouldn’t disagree about the ongoing need for quality customer data. It's the currency we use to create a positive customer experience, to attract and engage with new customers, and more importantly, to keep them coming back.
The ways that we can evaluate, manipulate and analyze customer data has exploded due to the rapid growth of data science. Whether you're using off-the-shelf functionality from a customer data platform (CDP) or building something in-house, you now possess the ability to ingest large volumes of data from multiple sources to make frequent improvements to your customer journeys. Yet, while data science and easy-to-use software have grown, what hasn’t followed is the evolution of the data sources themselves. We are all pining over the latest transaction data, website data, and third-party marketing data for a single customer view to power personalization and intelligent orchestration. These basic data sources are really just table stakes at this point yet there is significant value to capturing new data sources to improve your overall understanding of your customer.
If data is truly the currency of marketing then we should be spending as much time focused on developing new sources of data to feed our models as we spend analyzing the data sources we already have. Think about it - how much are you really learning about me based on my recent purchases of running shoes and socks? Sure, you could feed that transaction data into your CDP alongside other demographic data and map out my customer journey from search, to web, to purchase, but nothing about that data provides any true insight into who I am, the real person on the other side, shopping on your website or app. The personal layer of data is the most valuable as it provides you with the information you require to truly predict customer needs.
So what should we do?
First things first - stop depending on third-party data and start focusing on first-party data today. In case you forgot, I am referring to the data that your customers actually share with you. We are all aware of the looming end of third-party cookies as we know them today and while this seemingly abrupt end-to-user tracking and targeted ads approaches in 2023, we should not be waiting until the last minute before making thoughtful changes to our data strategies. A study from GetApp suggests that when third-party data goes away, 44% of marketers predict a need to increase their marketing spend by up to 25% to reach the same goals in a post-cookie world. Wouldn’t the smarter solution be to focus on replacing purchased data with owned first-party data?
The reality is that customers want personalized experiences, but only from the preferred brands they trust and not just the businesses that can afford to target them. This means the demise of third-party data is a rebirth of first-party data - but does your business capture quality data from your customers? What data do you capture? In what frequency? And most importantly, does the customer get any benefit from sharing their data with you?
What first-party data do I need?
This is a bit of a loaded question. Different data sources are needed to power different data models across different industries. But at the center of this dilemma is the customer, so ask yourself - “What do my customers really want from me?”
If you have built your brand the right way, then the answer hopefully is not based purely on price but rather quality, trust, and experience. If this is the case then start with a pat on the back and then ask yourself another question - “What else could I offer my customers in exchange for their data?”
65% of customers today are willing to share their data with retailers, but this needs to be an equitable exchange. Think about rewarding your customers for sharing data in the same way you paid Facebook or Google to advertise to those target audiences. This time you are simply skipping the middleman to reward the customer directly. These rewards can vary based on your business but examples include:
Loyalty points
Personalized promo and offers
VIP Experiences
Supporting content
In other words, whatever your customer needs to make that customer experience better than it is today.
91% of consumers are more likely to shop with brands who "recognize and provide relevant offers and recommendations." This means investing in ways to capture first-party data to improve your customer’s experience will drive the engagement your brand is looking for to provide the brand loyalty your brand needs.
How do I get this data?
This is once again a loaded question since it depends heavily on your customers and your industry but think back to the earlier questions.
Let's take a look at an athletic and athleisure apparel business as an example. This activewear industry has grown 84% since the start of the pandemic but with new entrants quickly joining the industry, both the top players and challenger brands are looking for ways to differentiate beyond just the products they offer. Brands must now focus on delivering value beyond the transactions so let's revisit those foundation questions:
What additional value are our customers looking for? In the activewear space, many customers want to improve their health while being supported in their health and wellness journey. Next, what could you offer your customers in exchange for their data? The most obvious answer would be discounts but remember that this is about extending relationships beyond the transaction, so what will they want after purchasing? For some this may be understanding their health beyond just body weight, for others it could be motivating and inspiring content to help them get active (and stay active), and for many, it may be a positive community to connect with others in similar places along their wellness journey.
Assuming you already have a great website and mobile app you should be looking for ways to improve the functionality to capture data in a way that powers what you want to provide your users.
At Sprout Wellness Solutions we deliver solutions like this and more every day. Whether an insurance company wants health data to better underwrite premiums and offer healthy customers discounts or a loyalty provider wants to incentivize healthy choices, we help businesses capture health and wellness data while delivering real, tangible value back to the customer to create truly equitable experiences for everyone.
Phil Hatcher; Head of Marketing: Philip is the Head of Marketing at Sprout. Philip holds a B.A. in Behavioural & Cognitive Neuroscience (Psychology) and a Master’s of Business, Entrepreneurship, & Technology (MBET) degree from the University of Waterloo. Prior to joining the Sprout team, Philip spent more than a decade holding senior roles in marketing and product across businesses ranging from HealthTech & FinTech start-ups to national sport and physical activity organizations. At Sprout, Philip leads a talented marketing team using an account-based marketing approach grounded in storytelling through content.