DALLAS: You can’t fix stupid, according to Texas funnyman Ron White, but you had better take advantage of that situation before your competitors do, or you may not survive, according to a roundtable at this week’s PARTNERS User Group Conference, Teradata’s annual customer event. “You better use data to do your marketing because your competitors are,” said DataXu’s David Shapiro, a provider of digital media/online advertising technology.
The roundtable was titled The Future Of Big Data: Engaging The Digital Consumer and the other presenters were: Bill Franks, Chief Analytics Officer, Teradata; Mohan Namboodiri, VP Customer Analytics, Williams-Sonoma; Rashmi Nigam, All Things Data, Machinima; Mike Gualteiri, Principal Analyst, Forrester Research; Wes Moore, VP of IMM (Integrated Marketing Management) Solutions, Teradata Applications, (formerly Aprimo); and Professor Mike Hanssens, Professor of Marketing, UCLA. Shapiro’s response was to my question about what kind of a competitive advantage is data-driven marketing giving to its early adopters.
Gualteiri answered that all the evidence says yes, pointing to Google and Amazon. “I think a lot of wealth has been created… it will have a significant impact.”
Hanssens, who studies what works and doesn’t work in marketing, is glad to see businesses finally accept that data-driven marketing really works, that all the theories and models have come to fruition. Overall, he sees mixed results as far as competitive advantage. “Certainly they’re better in talking to existing customers.” As far as customer acquisition goes, he’s not saying its worse, but the improvements don’t seem to be keeping pace.
For Machinima’s Nigam, a video entertainment network serving more than 2.4 billion monthly video views and reaching over 200 million uniques each month, even a smaller company like hers can benefit from data-driven marketing. “Big Data and analytics isn’t just for big companies, it’s for everybody who is online.”
Even with Big Data and elements of data-driven marketing, the rate at which dissatisfied customers switch their product and service providers continues to rise, according to Accenture (ACN). It puts the market at $5.9 trillion every year, with the US portion estimated at $1.3 trillion up for grabs annually. Over half of US consumers (51%) switched the companies they do business with in the past year due to poor experiences, up 5% from last year.
The rate at which customers switch from one company to another has been rising for 10 years and Robert Wollan, global managing director of Accenture’s sales and customer services practice, doesn’t see that trend abating, even with new technology. “Companies are applying new capabilities in old ways,” he said. Most companies collect tons of customer data but fail to show consumers they learn from every interaction by pitching personal offers based on that knowledge. “Know me and show me you know me,” said Wollan.
Regardless of – or perhaps because of – what Accenture is reporting, digital marketing is resulting in a handful of big companies buying a lot of smaller companies competing in this space. Gartner’s Adam Sarner identified at least six competing sources of consolidation, including the software megavendors IBM, Oracle, Adobe, Sales force, Teradata, and SAP because the digital marketing opportunity is the next frontier in software and big data, and they’re the most visible and voracious of the bunch.
He doesn’t believe a one-size-fits-all approach will work; instead we’ll end up with a multitude of approaches, a combination of platforms, suites and hubs with a continuing flow of new and evolving point solutions. Whatever approach is taken, its significance will be huge, said Gartner, which predicted that by 2015 a company’s digital strategy will influence at least 80% of a consumer’s discretionary spending.
Teradata deals with a lot of companies that have already adopted a data-driven culture, said Chris Twogood, VP of Product and Services Marketing. Many of them are disrupting their markets, like eBay that went to a 100% money-back guarantee after analysis showed the reward was greater than the overall risk.
Also, when companies combine and integrate data, they’re able to cross-correlate all this data and take appropriate actions, he said. “It fundamentally shifts how they do business.”
His last words of caution are not to look for the answers to your questions. “Look for the questions being raised by your answers, the data.” Only by seeking out new questions will you truly be able to understand new and emerging customer trends and then disrupt the market.
DISCLAIMER: Teradata paid for my flight and accommodations at PARTNERS User Group Conference.