Only 20% of Marketers Truly Know Their Customers
Only 20 Percent of Marketers Truly Know Their Customers
Eighty percent of companies rely primarily on basic customer profile information and purchase history to structure marketing campaigns, according to a new research report from Yesmail Interactive and analyst firm Gleanster. The two companies surveyed 100 senior-level marketers from businesses with $10 million to $1 billion in revenue for their “Customer Lifecycle Engagement: Customer engagement imperatives for mid-to-large companies” report.
In terms of transactional data, only 53% of marketers say they have an excellent understanding of customers' purchase history and 42% say they have a thorough understanding of basic demographic information such as gender and age. Additionally, even fewer have an excellent understanding of relationship data, including customers' level of participation in social media (20%), channel preference (21%), and household composition (27%).
“Despite their assumptions, marketers really don't know their customers,” says Mike Fisher, president of Yesmail Interactive. “With four out of five relying on basic demographic and transactional data they perceive as sophisticated, we found that marketers continue to rely on legacy marketing tactics and struggle to incorporate critical cross-channel data to inform customer messaging and offers.”
According to Fisher, many senior executives assume that data access is the problem. The reality is that information silos get in the way of marketers harnessing the type of deep data insight that produces effective personalized and relevant campaigns. This lack of understanding hinders marketers' capabilities of fostering relationships with customers and creating direct engagement. “Nine out of 10 organizations collect behavioral data, web analytics, etc.; but mysteriously, this information isn't available to marketers,” Fisher says. “These individual sources need to be aggregated and available in an actionable format.”
In fact, 86% percent of respondents said they could do a better job with segmentation if they had better customer data, listing the main challenges of limitations in marketing tools (42%), fragmented marketing systems (34%), and poor data quality (34%). About two thirds of marketers (67%) use CRM systems for segmentation, and 56% use point-of-sale data. According to the report, while CRM systems are the most popular, they're often the most limited as well, providing marketers with the most basic of information.
“Despite these [issues], most marketers believe that they're doing an excellent job of targeting and reaching customers,” Fisher says. “Since optimizing customer engagement is a top two goal for B2C marketers, much remains to be done across organizations.”
Fisher's advice for what can be done: First, continue to collect the core data currently being collected. Then identify ways to enhance the data with descriptive customer information “that delivers insights around who your customer is beyond just what they buy from you,” he says. “Simply put, how can you continue to ask for business from a stranger?”
Additionally, identify patterns within customer data that call out opportunities like the next most likely purchase for a specific customer type. It's also essential to identify best customers and other key segments and use them, not channels, to dictate strategy. Last, measure the results across channels and campaigns, and then use that insight to inform future strategies.
“The ultimate goal for marketers is to implement automated lifecycle campaigns,” Fisher says. “Marketers should be actively engaged in breaking down barriers, whether within their organization or with the data they have available…. Don't have a particular piece of info? Don't be afraid to ask. Customers are generally willing to supply you with the information you need, so long as they receive something valuable in return.”
Marketers who continue to operate in silos—in terms of data and marketing overall—and stand by potentially dated best practices instead of moving forward may find themselves watching the backs of competitors as they run off with their customers.
“One of the most surprising findings from the report is that the use of multichannel has not evolved beyond the basic definition of using more than one channel,” Fisher says. “Marketers aren't using data to execute campaigns or allowing data from one channel to influence another. Direct mail exists independently of email, which exists independently of social. So marketers are unable to move forward and embrace a truly multichannel approach. This is one example, but this siloed mentality exists when it comes to data within most organizations and how they analyze groups of customers.”
Consequently, Fisher says, even forward-thinking marketers are making decisions based on past strategies instead of approaches that mesh with today's realities. “They're following customers through the lifecycle they've artificially imposed on them, not according to how customers live, work and interact with brands,” he says. “The largest potential for growth lies in responding to threshold triggers and following the customer's lifecycle outside of marketing… Look at your practices according to everyday logic and outside of what used to be established best practices. You may be surprised at what you're missing.”