Data is always The Starting Point

There is enough information, workshops and events that all point to the fact that Big Data and Data Marketing is the quintessential resource for growth in client base and growth in revenue. All the Customer-Centric Marketers use data to ensure not only effective products and services, but to monitor things like geographical growth, revenue increases, sales and insights on future marketing initiatives. In the customer-centric model there is an emphasis on the Customer Lifetime Value (CLV) which determines various marketing activities to ensure the best results from the best set of customers.

Organisations are trapped in their own success and have been for decades and some even longer. But they have no idea what their customer looks like, they have no idea what makes the customer love their brand, and even more important, they have no idea of their customer buying cycles. International companies operating in South Africa are using customer-centric models and know exactly the kind of customer they are targeting in this market.

In the late nineties, McDonald’s opened its first Franchise in South Africa, and it knew South African economics and used this insight to make McDonald’s a household name in South Africa, and in every country it has decide to operate in. McDonald’s is also number six in the Forbes’ World’s most valuable brands released in 2015 and its estimated brand value is $87.8 billion, and confirmed that its brand success was not because of its burgers.

In South Africa, all major corporations, or the top 50 companies are scratching each other in advertising and other marketing campaigns trying to acquire more customers and clients. And their major competitive edge is still their products, which leads me to believe that they are still focusing on product-centric models. For instance, pay attention to all the advertisement of banks on radio and television, they are still putting their value on products and how those products are what the customer is looking for. There is no doubt that there has been some successes in their campaigns, but I doubt that it is sustainable, hence the continuous appetite to acquire more customers. None of the banks have looked at their clients in a customer-centric way and deliver exactly what that customer needs. Further, none of them have looked at the customers’ portfolio holistically and determine the future value and be able to know the customers’ needs before customer knows it.

Cell C has just launched a radio campaign where it claims it will buy the cellphone contract before the contract with a respective provider has elapsed. The focus here again is to acquire more customers, but like banks, it has the most valuable information about the customer and is not using it to its full advantage. With all the information that it has, it should be looking at the data and seeing how it can upsell and cross-sell, and when it does acquire it should be because it knows that its products are going to serve the customer. I suspect that with this kind of campaign, it is going to acquire customers that Vodacom and MTN are happy to get rid of, but even with this exodus of ‘bad customers’, Vodacom and MTN are going to panic and launch their versions of the contract buy-off and will set the wheel back in motion.

The solution is starting with the data and let data lead you to the customers’ most essential needs. Big Data companies like Teradata and Saas developed platforms for marketers and other business units to monitor and gather insights into customers and their buying behaviour. All of the data is important, transactional data, geographical data, customer personal info data, psychographic and other. Each and every piece of data has got marketing benefits. Using data for instance, has the power to determine if the brand needs to use a central route or peripheral route because the data shows the buying patterns of the customer. But not only that, the same data can also be used for determining the customer motivation for buying certain products. With a little bit of research, companies can determine the value of their customers and be able to classify those customers according to the value that they bring to the organisation.

Another factor that makes it essential for organisations to move to customer-centric models is content. We live in an age of prosumers (pro-active consumers), and they are motivated by content. The biggest focus in marketing budgets today is customer engagement, and the biggest driver of engagement is content. Content has never been as important as it has been in the past 5 to 10 years, where customers took a pro-active approach to buying. Customers want to know more and in the past 5 years they have wanted to experience it before buying. Content has played a pivotal role in the design and presentation of products and services in consumer products. Forward thinking organisations have taken their content and created strategies that allow customers to start conversations and open relationships within their brand, and the most authentic brands attract the most loyal customers.

In fact content has been so important that 75 per cent of companies that have blogs have experienced an 11 per cent increase in their conversion rates. Those who linked those blogs to social media campaigns such as Instagram, Twitter and Facebook have had an additional 5 per cent conversion rate. And those who followed insights from their data through various sources have had a 22 per cent increase in repeat sales. And research shows that there is an additional 21 per cent of customers who are sitting idle in most sales funnels in the top 100 companies in South Africa, and most marketers have no idea on how to engage them.

But again, stats mean nothing if companies are not going to use them as insights into either gaining a competitive advantage, strategically positioning their products or simply delivering the best value to customers. Most South African companies are like ‘spoilt brats’ where they are expecting to dictate to customers and only offer products they think are valuable to customers. In doing so they miss the most significant events in the customer buying behaviour. Companies miss things like trigger events, customer satisfaction, referral rate, which are behaviours that should be monitored every cycle and every time.

Again, like the many articles that I have written about how important it is to look, scrutinise and study your data for insights for future profitability. It is only 5 per cent of companies in South Africa that use transactional data for marketing insights, further in those 5 per cent only 1 per cent is using the full complement of that data to link all business units like sales, marketing and operations to add value to the customer. And less than 1 per cent link the customer portfolio to study influencers in their markets and strategies to keep the most valuable customers happy.

In conclusion, data is always the starting point and is continuous and the cycle never stops. If looking at the right information, data always tells a story of your customers’ past behaviour and with closer inspection, data also tells the story of your customers’ future behaviour. The messages that companies send out to customers must be consistent to their behaviour and be 100 per cent authentic. Once data is taken seriously as a source of determining growth in both the organisation’s bottom-line and the enhancement in brand value, it is only then that serious resources will be implemented to utilise the full potential of Data Marketing.

Article written by Dumi Maseko.