data practices

Customer Data Practices Need A New Path Forward

There are two points of particular friction that currently hold back marketers wanting to strengthen customerrelationships and engagement in an era of enhanced data privacy: The first is transparency. Consumers have shown repeatedly that they’re willing to share personal information in exchange for content that’s genuinely relevant to their interests. Instead of focusing on this transparent and mutual value exchange, too many marketers today are looking for loopholes and workarounds to get the precise addressability they’ve grown accustomed to.

Secondly, in their attempt to adapt to changing circumstances, marketers have been forced to build stacks of technology composed of point solutions – usually with separate platforms for CRM, CDP, email, acquisition and measurement. The inefficiency in both data usability and resources required for implementation can cause all but the most highly-staffed marketing departments to bog down in transitioning data between silos. Increasingly, brands are finding themselves with growing lakes of first-party customer data, but little ability to leverage it for action or insights.

By Jon Stamell

One need look no further than the chaotic adtech LUMAscape to appreciate the complexity and seriousness of the project. From clean rooms to cohorts and automated optimization, companies at every point of the process are trying to find new ways to deliver tracking-based performance.

On a fundamental level, much of the activity represented by the LUMAscape is misguided. Too many actors in too many silos are trying to maintain covert methods of data collection and use that are growing increasingly unpalatable. Just look at how Apple’s updated privacy enhancements for iPhone have crippled Facebook’s entire business model.

Modern marketers don’t think in silos. They think and act horizontally. That is to say that an application like market research has less value when it tells you, generically, what your customers think rather than what a certain customeror group of customers think. It doesn’t facilitate action.

Marketers are always looking for customers, but primarily they want to retain their best customers. They want to achieve customer loyalty and retention, which has become increasingly elusive. This means market research must be actionable. If an individual’s responses are appended to their file in a database, data becomes actionable.

Unlike cookies, survey question responses are not covert. Voluntarily-submitted information counts as valuable zero-party data, while customers know they are providing information about their interests, needs and perceptions. It’s a more honest and transparent way of obtaining information from the customer, and it enables brands to provide specific information of genuine interest.

Research isn’t research anymore. Customer-provided responses to open questions allow marketers to develop personas and provide them with content that matches their profile. Every question answered is another facet of their persona and can tell more than past information about demographics, purchases or browsing behavior. Zero-party data is the new currency customer relationships.

Methods such as landing-page surveys, single-question emails, short two and three question surveys, questions included in purchase forms, chat or even automated voice all can yield useful information about how a brand interacts with their customers. This is a new paradigm for customer data practices, because it places emphasis on learning about the customer versus sales. Sales will follow when a relationship of trust is developed. But take another look at the LUMAscape and you’ll see that most marketers are still caught up in the world of Big Data. That’s a path of diminishing returns at a time when a new direction is starting to emerge.

This article originally appeared on MarTech360.

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