Sue Klose

IT Brief: How to use smarter data to reach tomorrow’s consumer

Originally published: IT Brief, 30 September 2019

By Sue Klose – Non-Executive Director & Marketing Advisor,  Pureprofile

We have entered a data-rich age. Organisations that understand how and why to use the data at their disposal will have a massive competitive advantage. But making smart decisions around which data to invest in can be a complex and challenging task.  

At the same time, consumer expectations of the customer journey is rapidly rising, further increasing the pressure on organisations to deliver a seamless service across digital and physical platforms. 

Every sector, from FMCG to finance, retail to resources, is caught in a perfect storm – trapped between the rock of customer expectation and hard place of data collection, analysis and optimisation. In fact, according to research from Accenture – almost eight in ten executives (79 percent) say that companies that do not embrace and effectively use their data could face extinction.

Data-led vs data-driven

When a company harnesses the power of data, there are two key approaches that can be taken. Data-driven companies collect data, using AI and machine learning to crunch numbers and insights, and use it to drive decisions.

Data-led companies use data to guide strategy, but ultimately have human-made decisions. At least at their current stage of “intelligence”, machines lack understanding of the nuances of human emotion and desire. Machines can do the grunt when it comes collating and processing, but the human aspect remains. With data to assist, a human operative can understand a human customer far better than a machine can.

Demand for personalisation

Personalisation is a good example of a data-driven approach. More than ever before, technology has made it possible to gather vast troves of information about consumers, even as they become more dispersed. We’ve gone from engaging with mass media audiences as large demographic blocks to connecting with individuals across multiple channels.

In return, consumers demand personalisation and customisation. People expect to be asked for their opinions, and will trade this information for benefits, such as their date of birth for a birthday discount or special deal. 75% of social media users are happy to share data if a company can make relevant recommendations to them.

Consumers are also getting increasingly cynical and savvy about marketing, while data privacy regulations are tightening across the world. To establish better trust, advertisers and marketers need to incorporate new methods of transparency and disclosure. Organisations must fully understand the regulatory landscape, as breaches can be catastrophic – not just in heavy penalties, but in brand damage and customer loss.

Consent is critical: declared data, that customers volunteer, is far more valuable and useful than harvested data.

A customer’s search history, for example, may indicate that they are an older female. In reality, they may actually be a young male carrying out a one-off gift search for a relative. Failing to realise this, and continuing to target that customer with inappropriate products, is a lost opportunity. Simply asking a customer the reason for their purchase at checkout: “Is this a gift?” delivers much more accurate, useful data.

The customer of 2030

As EY surmised based on conversations with 200 business leaders and futurists: the successful products and services of 2030 likely don’t exist today – and businesses will face a new breed of  “superfluid” customers, with purchases often being determined by AI. In this environment, those brands that connect with their audiences across multiple levels will be the ones that thrive.

This means that, to survive in the future, brands will need to have a comprehensive and holistic, two-way dialogue with consumers, to understand what makes them tick far beyond the current scope of their customer experience. The development of more accurate, valuable consumer data will determine an organisation’s ability to deliver what the customers of 2030 want. Data-led organisations will survive by marrying data-driven insights with strong strategic thinking.

Sorting the wheat from the chaff

Making smart decisions around which data to invest and use can be a complex and challenging task. 

Too much data, and the wrong kind of data, can result in negative outcomes. High quality data is critical: customer information that is relevant, fresh and accurate. First-party data, that comes directly from your customers (rather than a purchased mailing database, for example) is the most valuable in this regard. You know when you collected it, you know that it pertains to people who’ve actively transacted and interacted with you, and it gives you the greatest insight into your customers.

Regulatory issues

While data presents exciting opportunities for engaging with consumers and developing deeper, more meaningful customer relationships, balancing consent and privacy can be tricky. It’s of paramount importance that organisations are aware of, and compliant with, global privacy legislation. This is a challenging area because the regulatory landscape is fast evolving, and the penalties are severe: both in terms of financial penalties and reputational damage.

New legislation to be aware of includes the EU General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA) – this gives people the right to know whether their personal data is sold or disclosed and to whom, as well as the right to refuse its sale. Australian data privacy regulations originate from the 1988 Privacy Act of 1988, and have been updated via Privacy Regulation 2013 and the Privacy Amendment (Notifiable Data Breaches) Act 2017.

Setting robust policies around consent and privacy, and being in alignment with new regulations before they’re passed, is the smartest and safest approach. Ultimately it comes down to the ethics of a business, and increasing numbers of consumers prefer ethical brands over less ethical ones. They’re even willing to pay more for it. Multiple reports show this trend: the 2018 Brands in Motion report found that 97% of global consumers expect the ethical use of technology from brands alongside customer-focused innovation. 

At the same time, recent scandals have caused alarm, with 84% fearful that their personal data is not secure. 94% say that if brands can’t use technology ethically, then governments should step in.

This creates an opportunity for responsible companies, who can use ethical policies, compliance and transparency as a brand advantage.

Organisations that take a smart and strategic approach to data will have a massive competitive advantage when it comes to engaging the consumers of the future. 



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