Data Paralysis - Are You Searching for a Cure?

My first desktop computer for work had access to a shared CompuServe mail account and a massive 512MB of storage – back in the day that was the largest commercially available optical disk for PCs, so when it was full you had to add a whole new disk, rather than just upgrading. It was about 18 months into the job that I had to add another hard drive.

Imagine working with that today, where PowerPoint files of 10MB are more and more common, and where at my company we regularly see marketers, who track consumers across every conceivable touch point, provide us with campaign data files pushing 1GB. The mind boggles at how much we now know about our customers, and it is hard to imagine how the world of direct marketing actually functioned and indeed thrived without all the consumer data we have available to use today.

Now juxtapose that against the findings of a recent Forrester survey where 49 percent of CMOs cited, “use of analytics to guide marketing decisions” as a weakness of their marketing teams; this was second only to “mastery of social media” at 58 percent.

There is no doubt that having access to consumer data can make the marketing decision process much easier, but within marketing departments, whether B2B or B2C, we are now seeing an increasing presence of what I call data paralysis. And very soon, unless as an industry we can do something about it, it will become an epidemic.

Data paralysis is a condition that is typically caused by some combination of the following factors:

1) An organization that does not possess a single customer view that is used across the entire organization for marketing and operations.

2) A marketing operations team that believes that if it can be tracked, we must track it, collect it, and file it; and maybe someday we will be able to use it.

3) A marketing leader that believes that analytics will solve all of marketing’s problems.

4) A management team that believes analytics is something that a bright new graduate should be able to handle with an Excel spreadsheet and a few macros.

5) An organization that believes technology is the answer – to everything.

Does this all sound a little too familiar?

A contributing factor that also cannot be overlooked is the increasing expectation that C-level executives now place on marketing organizations in terms of accountability to the business for revenue growth – no longer can marketers get away with citing increases in page views or click rates as measures of success significant enough to get them the next pay raise or promotion; it must now all be about dollars and cents and return on marketing investment.

With so much data available to marketers who lack a true analytics background, we tend to see them gravitate toward the data from which it is the easiest to extract real-time insights (such as digital) in order to feed the appetite of management for marketing performance dashboards; but typically what happens is because the data is from siloed sources, the insights are out of focus, and program strategies are only built on half truths, that more often than not, underdeliver on financial expectations. And yet worse still, the campaigns can negatively impact the customer experience and brand relationship, as important insights from other channels never make it into the equation. Clearly not a good outcome for anyone involved.

The challenge with data-driven direct marketing is that most companies collect, store, and access data in a variety of different ways. And as a marketer trying to build a single customer view across channels and product offerings, it’s no easy task. It takes time, energy, and resources – both people and money. You must make an early judgment call on what data currently exists within the organization that will be able to drive an early segmentation strategy, helping you understand who your customers really are, and how they are transacting with you. This is key as our company’s Customer Experience Marketing survey conducted in 2010 clearly shows the importance of segmentation and communications, with as few as only one-third of consumers in the Asia Pacific region being fully satisfied with marketing communications that they received. Without experienced analysts that understand and have experience with algorithmic models, you will not succeed; and without marketing strategists that can turn the data into actionable insights, your programs will never mature.

So, if you now find yourself looking around your marketing department for the tell-tale symptoms of data paralysis, then my job is as good as done. As to the cure, well I am afraid that will take a little longer as there is no magic bullet.

But a good place to start is with a skills audit – do you really have the right people and partners, with the right skills doing the right job?