The New Data Reality for Marketers
The global big data market is projected to grow to $103 billion by 2027, more than double its estimated market size in 2018 — and a great deal of that data is being used to power better interactions between brands and their customers. Amid such rampant growth, the data landscape continues to shift, both in terms of customer expectations around data use as well as the regulations with which marketers must comply. Let’s look at the state of big data’s role in marketing going into 2020 and beyond.
Consumers Make the Rules
Consumers are becoming more selective in terms of the messages they engage with and the products they buy. In response, marketers are leveraging data to ensure their messages are relevant and interesting to customers. But of course, not all customers are interested in the same types of experiences. Personalized, on-demand marketing is fast becoming an expectation, and preferences vary greatly by generation.
Marketers will always stay ahead of the curve if they properly and consistently track their customers’ preferences and are able to identify shifts in behaviors both online and offline. This can help determine how high-tech or in-depth they need to be with their CX approach.
Take Millennials as an example: Findings show they are very familiar with the online experience and are more comfortable with new technologies than the next largest population group in the U.S., Baby Boomers. Therefore, if your target audience consists of Millennials, a mix of tried and true marketing methods paired with more cutting-edge tactics is a good place to start.
For example, an interactive 3D direct mail piece tailored to a Millennial recipient might offer a link to view an augmented reality video of the product in use. This application would be a great avenue for retailers like Warby Parker to provide an immersive virtual reality experience when consumers are trying on a new fashion accessory.
It also works as a way for purveyors of big-ticket items to build anticipation for product launches, like Ford’s effort to let fans virtually configure the new all-electric Ford Mustang Mach-E10 in advance of its official release later in 2020.
When marketing to the next generation of consumers, be prepared to meet them where they are. With Gen Z, that’s online, as these young consumers view Internet access as a given at all times. Marketers also need to consider what this generation can afford, as well as what they’re willing to pay.
Gen Z is thrifty, but they’re willing to pay for verified quality, superior service and demonstrated social responsibility. If Gen Z trusts that where they shop and spend their money is inclusive and not exploitative, they will reward retailers and brands with their loyalty. That loyalty is key to reaching this group, as Gen Z is the generation that has adopted ad-blocking technology in earnest.
While each generation of consumers may have different marketing preferences, one thing remains constant: To get a full understanding of consumer preferences, marketers should have a variety of data from first-, second- and third-party sources, be able to make sense of it, and ultimately use it to execute programs based on consumer preferences and values.
There are different ways to get there — using a CDP (customer data platform), enlisting the help of data scientists, partnering with a full-service agency and more. But it’s still up to the marketer to prioritize what’s most important to them before deciding on a suitable route. And when plotting that route, marketers must keep in mind the following:
Regulations Continue to Reshape the Data Landscape
Consumers continue to demand more privacy and transparency, and new government regulations are continually being passed to address this demand. Today, brands must address the need for data privacy and security and highlight their policies to build trust. Upcoming generations believe that their purchases make an impact on society and place value on brands and companies that share their concern for societal impact. The need to trust brands extends to their expectations of privacy. After all, how can you trust a brand if it doesn’t respect your personal data privacy?
Protecting privacy all starts with ensuring a brand is compliant with relevant regulations. Along with state-based privacy laws, be on the lookout for initiatives to create a mandatory data seller and buyer registry or licensing requirements for businesses to use customer data (similar to the licensing requirements for real-estate brokers).
For example, Vermont passed a data broker law in early 2019 that requires businesses collecting and selling data about Vermont residents to register with the state. Due to the growing abundance of new data forms and sources available to marketers, having a comprehensive data auditing process (audit trail) will be key to maintaining, safeguarding, and staying compliant with future laws about personal information.
Data governance and privacy practices are an easy concept to understand; however, a formal top-down commitment from a company is required to ensure that customer data is secure and that customers are being treated as people, not just numbers. That means giving customers control over their data. If a consumer contacts you and requests that you cease marketing activities using their data, you need to promptly honor their request. But don’t stop there. Put your customer service skills to use by following up with consumers to assure them that their request has been processed and their preferences are being respected.
Ultimately, marketers are going to have to treat data privacy like driving their beloved Grandma on an icy road going downhill through an intersection (with Grandma holding her freshly made casserole on her lap). In other words: Be careful with data privacy implementation or risk a potentially disastrous outcome. Brands should have a clearly defined and transparent system of data governance as part of their business-as-usual policies and avoid using confusing privacy and opt-out language.
The big data landscape continues to change at lightning speed, and brands must adapt and evolve accordingly to stay relevant and attractive to consumers. Whether it’s to reflect shifting consumer behaviors or new regulatory requirements, having a learning mindset will help keep your marketing team motivated to take on new challenges. In the data landscape of 2020, the combination of trust, integrity and adaptability represent as a key competitive differentiator.
Heather Winnicki is VP of Product Management at Infogroup. In this role, she is the product owner for Marketing Genetics and leads the strategy and development of the product. She is responsible for product management, marketing, go-to-market strategy, account management, and service delivery for all of Marketing Genetics.
Heather has over 15 years of experience in direct marketing service organizations and is passionate about growing businesses as well as services to their fullest potential. She was awarded the 2005 Ron Davis Young List Professional of the Year award from the Direct Marketing Association.