Marketers bring data in-house to improve CX

Many businesses are retaking ownership of customer data, hoping greater visibility and control will help them harness the power of that information to compete and win on customer experience.

Not long ago, marketers were clamouring for more data. When the data came pouring in, companies often turned to tools and vendors for its collection and management, unintentionally introducing isolated and incompatible data types that weren’t always easily accessible to customer engagement systems. Now, most marketers are managing too much data, too many applications, and too many vendors, limiting the potential to gain insights and improve customer experience (CX) – all as customer expectations are rising.

A Forrester Consulting study commissioned by Deloitte determined that many organisations are actively addressing the issue by reducing the number of data vendors they engage, consolidating tool sets, and bringing customer data management back in-house. The study was based on 425 responses to an online survey and 10 interviews with director-level decisionmakers.

The surveyed companies report having, on average, 17 different applications that leverage customer data, with an average of 28 different data sources related to customer insights and engagement; 16% have 41 or more data sources. In fact, only 38% strongly agree they know where all customer data is stored, and only one in four companies surveyed has omnichannel campaign history and uses it effectively.

Poor data management has real consequences. Missed opportunities and missteps can alienate prospects and customers. Inadequate or inaccurate data can lead to misinformed personalisation and a level of interaction beyond or below what consumers expect. Both problems can significantly impact profitability and growth. A tangled, complex web of data sources and technology can thwart the key customer-related goals identified by survey respondents: Improve customer satisfaction, win new business, and increase profitability per product or service.

Specifically, survey respondents pinpoint their top three concerns related to incomplete, inaccurate, or siloed data: 1. Reaching the wrong customer

2. Lower revenue; incomplete customer

profiles (tie)

3. Increased security risks from more vendors having access to data; limited analytics capabilities; offering irrelevant products or services (tie)

To gain more visibility and control over customer data, a large majority of survey respondents have brought data management in-house, and many others plan to do so. In two years, the practice of managing data internally using a mix of commercial and homegrown tools is expected to increase 40%, while fully outsourced management of data is expected to drop 48%, according to the survey.

As companies move to regain data ownership, the most common challenges reported are pooling budgets, integrating and ensuring compatibility of data, and selecting a single solution and unified data management strategy for all lines of business and teams.

Leveraging Data to Improve CX

The Forrester study offers the following recommendations for addressing these challenges and tapping the full potential of data analytics to create a winning CX:

Conduct a data audit. Before making any decisions about processes and resourcing, establish a clear, documented understanding of data coming in (inputs) and actions it might affect (outputs). Identify how data is applied for marketing and CX – segmentation, personalisation, and analysis, for example – and then define data feeds for customer engagement. Based on data supply requirements, map out the source, location, data types, transmission and management process, and security and privacy considerations for each data feed. Understand who is (and who should be) involved in data management, identify key pain points, and set achievable goals for improving efficiency.

Prepare for investment and change. While the benefits are clear, bringing data management in-house is a major shift for most organisations and entails startup costs for building the program and technical infrastructure. Be prepared for upfront investment that will be amortised over time, plus continuing maintenance costs. The goal is to have visibility into and control of customer data.

Tie data value back to the customer. Prior to committing to a new data management program, develop a pro forma business case to estimate the financial impact and payoff period, and develop an ROI analysis for each stage of the rollout. The program should be linked to customer KPIs such as customer satisfaction and revenue to provide long-term value and justify ongoing investment.

To gain more visibility and control over customer data, a large majority of survey respondents have brought data management in-house, and many others plan to do so. In two years, the practice of managing data internally using a mix of commercial and homegrown tools is expected to increase 40%, while fully outsourced management of data is expected to drop 48%, according to the survey.

Start immediately. Meeting customer expectations has always been a critical business priority, but today’s customers hold truly unprecedented power, and their expectations continue to rise. For most organisations, creating a positive CX starts with effectively leveraging data that’s already captured but inaccessible or not fully usable; bringing it in-house sets the stage for tapping its full value. If needed, seek out partners who can accelerate the transition to consolidated in-house data management and help enable more rewarding experiences as quickly as possible—for the benefit of customers and the business.