As organizations move further down their digital transformation journeys, it becomes clear that data alone cannot be the only competitive differentiator; it’s what organizations are able to accomplish with data that counts, whether that’s improving profitability, increasing innovation, or creating better customer experiences. Some organizations are gathering and using huge volumes of internal and external data much more effectively than others.
Organizations that are successful in turning data into above-market growth excel at three things:
[Data] Using analytics to identify valuable business opportunities from data to drive decisions and improve their marketing returns on investment (MROI).
[Insights] Turning those insights into well-designed products and offers that delight customer.
[Strategy] Delivering those products and offers effectively to the market.
You Don’t Need Big Data — You Need the Right Data.
Unpredictability and rapid change is the new normal, and more than ever, marketers need to make decisions quickly that are anchored in data. As a result, many companies are pouring money into marketing analytics — last year, CMOs invested more in this category than any other. Yet, even as marketers bury themselves in data, they are still getting an incomplete picture of their performance and their customers.
Redefine the right “Digital” Data
Customer experiences produce digital data be it whether they take place online, offline, on mobile, or all of the above. With Internet of Things (IoT) platforms, companies are able to see how their services are used — whether it is data about internet usage (in the case of a telecom provider) or total miles driven (for an insurance carrier). These usage patterns can help businesses understand if customers are using the services for which they are paying and getting the appropriate value. Conversations via contact centers and in-store visits are now being "digitized," and they reflect point-of-sale insights into customer purchasing behavior.
It's possible now to measure behavior that was once impossible to track. In-store purchases and tele-conversations with customers were once regarded as “offline” data black holes, as there was no way to accurately track and attribute sales to past online behavior or marketing and advertising efforts. Marketing technology has since evolved and this data black hole is now digital, which means it can be analyzed like any other online activity. For many businesses, this data is critical to decision-making, especially as competitive, customer, and market realities quickly evolve.
In today's uncertain economic environment, it is more important than ever before to make decisions that are grounded in facts and connected to results. Effective use of data and analytics can help marketers stay anchored to their customers’ changing reality.
From Data to Wisdom
"Data is only the begining. Connecting the dots creates Knowledge. However it is Wisdom that translates insights into impactful decisions" - Fabio Moioli
Turning customer data into marketing insights
An organization's ability to drive above-market growth depends on the depth of its consumer insights and how well it translates those insights into effective action. Here are steps that every marketer needs to take to create that framework and kick-start their data journeys.
Step 1: The Ask [Generating customer insights through quantitative and qualitative research]
Consumers utilize multiple touchpoints to arrive at their purchase decisions. Those touchpoints are defined by many variables (channel selection, location, purchase time, etc.). All of these variables affect the consumer's journey evolution and how decisions are made, so deciphering these variables really makes it challenging to unravel customer data and turn it into action.
Qualitative research helps bring customer data to life. It illuminates their needs, their decision-making processes, and their reactions to companies and brands. By drilling down into a customer purchase journey and talking to the right people, marketers will be able to successfully isolate probable causes that contribute to variables affecting specific customers, the business, or organizational issues.
Step 2: The Tell [Revealing competitor/ market insights through market research]
Effective marketing involves a thorough analysis of the overall competitive arena and the competitors that battle within it. The competitive analysis determines whether firms decide to fight head-on with like products or maneuver a sneak attack with differentiation.
Market research is marketing’s best friend. It helps marketers predict what customer needs, communicate the most desirable traits of the product or solution and at times, even create demand that wasn’t there in the first place. Marketing and research go in hand in hand. Good market research is a strong multiplier for marketing, helping in the implementation, refinement, and delivery of the goods or solution to the market.
Finding Your Marketing Sweet Spot
Now that you have the data and insights into your customers and competitors, how do you go about creating a successful strategy/action plan?
Successful businesses have succeeded in part because they have identified a Strategic Sweet Spot in a fragmented market that has set them apart and provided them with a distinct advantage. Consider the following companies: Apple, Samsung, TikTok, Airbnb, and Nike. They all do something that gives them a distinct advantage over their rivals, and they do it better than anybody else.
"Strategic sweet spot is that space in which you are able to satisfy customer needs better, cheaper or differently from your competitors. Strategic sweet spot is “where it meets customer’s needs in a way that rivals can’t, given the context in which it competes" - David J. Collis and Michael G. Rukstad
A good strategy articulates how customers' needs can be delivered by your company in a way that your competitors is unable to, given the context that you and your competitors are operating in. It is about finding that competitive edge through a differentiated, well-thought-out set of activities.
Every business requires a strategic sweet spot in order to be successful in achieving sustainable business growth. It's not the same as a niche approach. A niche is a business segment where the company's goods and services are thought to have a chance to sell. Whereas a strategic sweet spot is a tightly oriented approach based on a company's core competencies coupled with a strong understanding of their customers and competitors.
With good market research and careful strategizing, the chances of success in finding this sweet spot become much higher.
Conclusion
It is clear that customers' expectations of brands are shifting and marketers need to understand what and where those changes are happening. The ones that already do, go on to develop a better understanding of what their customers want and how they make decisions across the entire funnel, giving them an edge to both win new customers and ensure the loyalty of existing ones.
Do you still feel like you have all the data on exactly what your customer needs?
Written by Wymen Choi, the Head of Business Intelligence for KeyHole Insights. A data advocate who’s passionate about transforming people and business using design thinking, data analytics and technology. Subscribe to our monthly newsletter for valuable insights delivered to your mailbox.
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