Why organisations need to address data management

quality data
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Chris Hyde, Global Head of Data Solutions at Validity, discusses how businesses can attain quality data to help further boost e-commerce and in-store sales success

Effective data management plays a key role in every successful business. Throughout the pandemic, there has been a strategic upheaval in how and what kind of data organisations are collecting about their customers. Almost every business has had to adapt to these challenging times, which has caused many brands to reconsider the data they require and completely restructure the way they communicate with customers.

Many retailers, for example, have started promoting products and services that are more relevant to the new situations they are operating in, while also ensuring more empathetic and supportive language is used during a time of uncertainty and financial fragility. As a result of this, there is more focus around ‘zero party data’, whereby customers intentionally and proactively share data with a brand. Examples of this can include preference centre data, purchase intentions, personal context, and how the individual wants the brand to recognise them.

Another driver is the increased focus around consumer data privacy, such as Apple’s recent announcement stating it will no longer support email tracking pixels. Typically, many marketers use the data from these pixels as a way of measuring subscriber interests and the absence of this data means marketers will need to find new ways of achieving this.

What is ‘zero party data’?

‘Zero party data’ provides organisations with clear consumer preferences, aligning with their desire for personalisation. On the other hand, first-party data is typically inferred based on previous purchases or browsing behaviour. When stay-at-home orders were first delivered, many businesses faced the challenge of an information deficit, whereby first-party data derived from customer transactions was likely to become scarce or unusable due to a sudden change in buyer behaviour. For example, instead of shopping in-store, where their intent is relatively clear, consumers turned to online shopping where their digital body language is more difficult to read.

An example of ‘zero party data’ benefiting consumers and brands can be seen throughout the height of the pandemic when there was a sudden influx in home schooling. If brands knew whether their customers had children, they were then able to provide content to help their customers deal with any ongoing challenges. By focusing on ‘zero party data’ and enabling consumers to state what they want from a brand in exchange for their personal information, companies can gain greater insight into the needs and interests of their target market to increase personalisation, and consumers benefit from an improved customer experience. An additional example could be a sportswear or equipment brand understanding that its customer is no longer able to go to the gym and adjusting content towards exercise from home or other aspects of mental and physical wellbeing.

Another benefit is that customers are more likely to provide a primary email address which typically generates higher levels of organic engagement. This has proven to be important throughout the pandemic as many marketers have faced pressure such as budget cuts and operating with smaller teams. The challenge to adapt and drive efficiencies has therefore encouraged businesses to maximise their potential in a short space of time.

By using ‘zero party data’, organisations are assured that their customers actively want to hear from them, which helps paint a clear picture with targeted advertising. In addition to this, as brands do not have to infer preferences, they can build direct and personal relationships with customers, which is both a long and short-term benefit.

However, it is important to note that subscribers can often lose interest if too much information is requested too soon. One way of overcoming this is to implement progressive profiling, whereby subscribers are re-visited at regular intervals to provide additional data points, and these requests can also be incentivised. Indeed, requesting ‘zero party data’ typically represents a value exchange whereby subscribers benefit from providing their data. It is crucial for brands to be upfront about how customers will benefit from providing this data, as they are less likely to provide it if they believe the company will not handle it responsibly.

Best practices for data success

In addition to ‘zero party data’, customer data platforms (CDPs) have also become more important for businesses, as they help collect data across various sources to create unified customer profiles. The DMA’s Email Data Quality 2021 report found that 33% of businesses currently have CDPs in place and are more likely to have a developed approach with storing and using customer data as a result. For example, these organisations are more likely to have a preference centre in place (25%) and use it to collect additional information on their customers (31%) to help support personalisation and messaging relevance.

With the right tools in place, businesses can now identify which customers are less active over a certain period of time. These users can be segmented and targeted through campaigns across multiple channels which are specifically designed to win them back. This can be a useful tactic because consumers may disengage with a particular channel but not the whole brand. Being able to re-engage customers through a different channel carries a higher chance of success.

Another important consideration for businesses is data management, such as data quality and data governance. Data quality is determined by the actions on the data such as profiling, standardisation, deduplication, verification, enrichment, and monitoring. There are tools available which can alleviate the burden of doing this at scale and automate processes. If an organisation has poor data quality, it can result in strained communications between employees and customers, as well as missed sales opportunities and revenue loss.

Data governance encompasses the people, processes, and technology employed to manage a business’ use of data. It is essential for a business to establish a standard for data that fits its needs and processes, and plan for enforcing and supporting that standard. Data governance will serve as the checks and balances for data flow, end user adoption, and the recognition and resolution place for technical debt. In addition, it is not limited to large organisations, as a team of only one or two people can lay the groundwork for this approach. To be successful and drive value to a business, data governance initiatives must come from the top and should be an organisation wide approach.

The time to address data is now

According to the DMA’s Marketer Email Tracker, many marketers have reported performance metrics trending positively, despite restrictions throughout the last year. Although this is a positive outcome from the pandemic, it has also highlighted some new challenges for marketers to overcome to continue succeeding. According to the report, difficulties with data have increased by 10% to 52%, overtaking budget/resources for the first time. This suggests that data quality and having the right tools in place to ensure data is compliant needs to be addressed sooner rather than later.

There are a variety of methods and tools available when it comes to effective data management for brands. These programs establish a stronger value transaction with subscribers benefiting from lower future data quality challenges, because of higher quality data platforms. Although the pandemic has been an unfamiliar time, it has presented an opportunity for many marketers when it comes to driving engagement.


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