With so much customer data flooding in from so many channels, it is imperative that marketers effectively store, process, clean and use digital information.
Over the past year, the marketing industry was plagued by several high-profile data breaches that threatened the very existence of online data collection and behavioral targeting. It is a challenge for large organizations to keep data safe when it is not unusual to have various different people, departments and even outside agencies touching this information.
“Breaches occur because more and more information is getting collected these days,” says Spyro Kourtis, president and CEO of Hacker Group. “All of these companies have more people across departments and groups within the company collecting more information and having access to it across the company. And many marketers are working with a few different partners who have access to this data, and that makes it more at risk.”
In a move to keep its customer experience universal across the brand and safe across digital channels, the American Red Cross is currently in the process of bringing together its database from hundreds of local chapters across the country into one centralized CRM database.
“We recognize that a consolidated database is important to creating a 360-degree view of the donor, and we are trying to take a donor-specific approach,” says Jennifer Elwood, executive director of consumer marketing at the American Red Cross.
Marketers apply analysis and organization to data collection
With the increasing amount of customer data available to marketers these days, information gathering can be overwhelming.
This is not a simple task. A customer might show up in multiple databases, and updates he might have shared may have only ended up in one place, making him look like two different customers. “We do a lot of work around data transfers to make sure that we are getting updated information and that the chapters are sending us refreshes,” she adds. “We are working on centralizing this so that it all comes out of the same database.”
Data security and consolidation
Keeping a centralized database serves two purposes — it helps marketers streamline messaging and provide customers with a better experience, and it helps keep the company’s customer data private and secure.
To ensure that all of its data is being kept secure, American Red Cross is practicing what Elwood calls “data reverence.” The organization is Payment Card Industry compliant and it makes certain that all donor data is encrypted. In addition, the nonprofit does not sell data to third parties. “Security is absolutely paramount,” Elwood says. “We have to be really diligent about it and are constantly monitoring our security procedures from a fraud perspective. Our donors put their trust in us, and all of that information will remain secure and confidential.”
Consumer trust is an important topic these days. Recently, a number of high-profile hacking incidents affected millions of consumers. In January, a hacker accessed Zappos.com’s customer database, gaining access to customer information such as email address, billing and shipping addresses, phone numbers and the last four digits of credit card numbers. In June of last year, Citigroup reported that an unauthorized person hacked the files of about 1% of its Citi North America bank card accounts. Last April, Sony’s PlayStation Network customer database was broken into, and hackers accessed the personal information of about 100 million consumers. Last March, Epsilon experienced a data breach, which affected several clients’ customer databases including Walgreens, Best Buy and JP Morgan Chase & Co.
Xerox employs various security protocols to ensure that its customers are protected. “We have a disciplined process on privacy, and data governance as well,” says Christa Carone, CMO of Xerox. “It is all about trust with your clients, establishing and maintaining that trust so that your prospects and clients believe in the value that you bring. It is paramount.”
Despite the risks, data is important to marketing. Data defines the types of campaigns that marketers can launch to reach the most appropriate consumer in the most successful manner. Good data can save marketers by avoiding communications with lapsed consumers and creating personalized experiences for active customers.
“We don’t have big ad budgets, but to get people excited about our products we encourage them to register and become a part of our database, and through this we begin to understand what their behavior is and how they fit into our segments,” says Tom Woodside, VP of marketing and e-commerce at cosmetics retailer Crabtree & Evelyn. “And then we can have a relevant conversation with them.”
As technology continues to evolve and customers are interacting with brands across more channels, CRM systems are more important than ever. These platforms are great tools to help marketers capture and store data from various sources, including mobile, social media, email, direct mail and call centers. “A lot of marketers underutilize good old CRM and don’t take enough time to understand when someone is buying, what they are buying, how much they spent, who they are, where they live and how it will influence product development,” Woodside says.
Despite the fact that consumers are concerned about security breaches, many customers are still willing to share information about themselves online, especially the younger ones. According to Forrester Research, only 33% of 18-to-24-year olds are concerned that companies they interact with can access online behavioral data such as Internet browsing history or a social networking profile.
“We have seen a heightened awareness on part of customers about divulging information, but we haven’t seen that relayed into a decrease in their willingness to participate,” says Peter DeNunzio, president of customer loyalty at Carlson Marketing. “One would have thought that everyone would say, ‘I’m not going to give you my email address or phone number or ZIP code,’ but that’s not the case. Everyone is willing to give this information as long as there is some kind of value exchange.”
Creating relevance
Marketers should only be collecting data that is relevant to the campaign and data that will serve customers. According to Forrester Research, 44% of consumers will opt out of a transaction if they don’t like something that they see in a privacy policy online.
“We’ve had this idea that we should suck in all this data regardless of if it is actionable, because maybe it will be actionable in the future, but consumers don’t like this,” says Fatemeh Khatibloo, senior analyst at Forrester Research. “Breaches bring these things into the spotlight, but it’s not just driven by fear, it’s about interest. If you are creating a digital interest or something that is valuable, then consumers will be willing to share.”
Crabtree & Evelyn is trying to provide value with its campaigns. The beauty retailer is in the process of working with CRM agency 89 Degrees to revamp its brand to attract a new generation. To make itself more appealing to a younger audience, the brand is running social media campaigns and has launched a new loyalty program. The company is using a newly centralized CRM system to help make its process more streamlined, its messaging more targeted and its data more secure.
As part of its Facebook promotions, customers that share an email address or join the company’s new loyalty program will get discounts and exclusive experiences reserved only for these loyal customers. “The benefit to the customer is that we reward them with discounts and unexpected surprises,” Woodside says. “Prior to Mother’s Day, we’ll be sending out an exclusive gift to people in the program that won’t be available to anyone else.”
Organizing data can be a real challenge, especially for marketers that have different departments interacting with customers, all of whom collect data from different places. A brand might have call centers that collect information that is not being tied into a Facebook marketing program or an in-store shopping experience. American Red Cross not only has hundreds of chapters collecting data, but each arm has its own unique way of coding data. “As you can imagine, it doesn’t all match up because we are not comparing apples to apples,” Elwood says. “As part of our CRM initiative, we are rolling out standard coding, which is a huge project for us.”
Even when data is well integrated, marketers are challenged in deciding which data is actionable for messaging. “Figuring out how to integrate the deluge of data in a single infrastructure is hard,” says Lawrence Kimmel, CEO of the Direct Marketing Association. “It’s not just a question of physically linking all of the databases. It’s also a question of organizing staff and creating clear business systems that let the different databases and data sources speak a common language and deliver consistent metrics and analyses.”
With so much personal data circulating the online ecosystem, it’s imperative that marketers figure out how to not only collect and use data but also protect it. On the one hand, marketers want to centralize their customer data to provide a more cohesive experience for customers, but on the other hand, in bringing data-sets together, they need to make sure that data is kept secure.
Self-regulation
One way in which marketers are safeguarding customer data is to put protocols in place that separate personally identifiable information (PII data), which includes things like a mailing address, a social security number or a credit card number, separate from cookies, click and transactional data. To track a customer’s non-personally identifiable data, marketers often assign a number to a customer that is independent of anything personal and keep it in a secure, encrypted vault with limited access.
Encryption is another way to help keep data safe. According to Experian‘s “Data Breach Resolution” report released last January, which interviewed IT professionals from 500 companies that experienced a breach, 60% of marketers said that customer data that was lost or stolen was not encrypted. Jeff Lundal, SVP and GM of Experian Marketing Services Data Management Services Group, says that another level of protection that company uses is “de-identified and modeled consumer data,” which helps keep customer information private.
Consumers tend to feel differently about different kinds of data being collected about them. “Fundamentally, people are less worried about behavioral data than they are about personally identifiable data,” Khatibloo says. “They are more concerned about their address and email address than they are about the stuff they are putting out there on the Web, like sites they are visiting.”
Click data is often more secure, since it isn’t tied to PII data. “A lot of that data is difficult to match up to individual customers,” says Taylor Duersch, VP of decision sciences at Carlson Marketing. “But click-stream data is a challenge, too, because you have to figure out what to keep and what not to keep to make marketing more relevant to customers.”
For ideeli, an e-commerce site dedicated to daily deals on women’s fashion, consumers expect to have a curated experience based on their personal browsing and purchase history. To ensure data security, ideeli has a series of controls and technologies in place. The company also limits the access that its staffers have to data, and they use products like credit card tokenization to reduce or eliminate the need to store sensitive data. “The key behind good data security is to be realistic about the value of the data you are storing and the cost of an attack,” says Mark Uhrmacher, cofounder and CTO of ideeli.
Uhrmacher says that the customer data that ideeli does store is useful for marketing purposes. “Most of the data we store is voluminous and low value in segments,” he says. “The value comes with the processing, most of which is proprietary. We aren’t too concerned someone will manage to break in and spend three weeks downloading click stream data.
