Despite increased sophistication in how marketing data is being collected and used, the sheer volume of data means brand owners are still struggling to fully understand their customers’ needs and expectations, an issue which is leading to missed opportunities and ineffective marketing efforts.
That is according to new research by Callcredit Information Group, which reveals that the growing number of data sources is making it even more difficult for marketers to determine what data is useful and what is not.
Whilst almost two-thirds (65%) of marketers believe that so-called “smart marketing” has helped them to outperform the competition, the report suggests that marketers may not have as clear a view of their customers as they think.
In fact, 47% of marketers believe that more than half of their customers have a very high understanding of how companies use their data. But in reality, less than one in ten (9%) consumers feel this way.
The research uncovered a number of further significant differences in what marketers believe customers think and what they actually do. Three in five marketers (61%), for example, think that consumers are frustrated with the way businesses access and use their data. In truth, fewer consumers, although still a large number (52%), say they are exasperated with this.
Similarly, the majority (81%) of marketers believe customers have become more selective about who they allow to access their data. Whilst the number of consumers (62%) who have become stricter on this is significant, it is lower than marketers think.
This disconnect is hampering marketing efforts. Whilst almost half (47%) of consumers have become less likely to respond to promotions, for instance, just 30% of marketers have taken note of this trend.
Callcredit managing director of credit and marketing data Steve McNicholas said: “With truly data-driven businesses having the competitive advantage in today’s digital environment, marketers must – first and foremost – ensure that they really understand their customers’ data expectations. Without this insight, no matter how smart their tactics, marketing strategies will fall short of expectations.”
When comparing this year’s responses to those asked in Callcredit’s ‘The Data Dilemma’ report published last year, it is evident that marketers are using a growing number of data sources to inform their decisions. The use of internal sources such as CRM and marketing data, for example, has nearly doubled in usage – from 37% in 2016 to 67% this year. However, one in five (21%) marketers still see providing clear directives based on customer data insights as their biggest challenge.
McNicholas continued: “One of the main reasons marketers don’t have as clear a picture of what their customers think, is because the growing number of data sources is making it difficult for them to determine what data is useful and what is not. There are a number of steps marketers can take to overcome this problem, including setting up a preference centre to ask customers how they want to be marketed to and figuring out what data actually improves the effectiveness of their efforts.
“As understanding their customers will become even more critical for businesses once the GDPR comes into force later this year, the time for marketers to get smarter is now.”
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