Teradata has just released a new survey that finds marketers are struggling to find the best technology path to build personalized customer relationships and still rely too heavily on gut instinct versus data when making budget decisions. As a data analytic solutions vendor, the “Enterprise Priorities in Digital Marketing” findings can be seen as self-serving, but that doesn’t mean they aren’t valid.
“We’ve been talking about personalization for years,” said Darryl McDonald, president, Teradata Marketing Applications, in a prepared statement. “Now, through digital marketing, custom analytics and marketing as a service the appetite is real, and true personalization is the future. Only a customer-centric strategy that combines technology and data can deliver sustainable opportunities for businesses to drive top-line growth through continuously more personalized data-driven marketing strategies.”
The top two findings of the study were the need for the integration of technology and data, and using personalization to improve the customer experience, said Michael Lummus, Director of Digital Marketing Solutions, Teradata Marketing Applications. He told IT Trends & Analysis “customer centrism is the primary benefit”.
Key findings of the survey of more than 400 digital marketing leaders at large global enterprises include:
-the debate about how to approach the modern consumer is over: the largest marketing organizations have concluded that enhancing customer relationships via multiple digital channels best supports sustainable growth and reliable retention;
-62% of respondents view improving customer satisfaction as the top reason to invest more in technology;
-becoming more customer-centric is a top-two priority for 49% of respondent organizations;
-nearly 50% cite full integration with other technologies as their top criterion for new technology adoption;
-32% consider personalization a top priority, although fewer than 20% are executing on it real-time in day-to-day business;
-47% acknowledge that improving the customer experience is the top benefit of personalization programs; and,
-although enterprises are pursuing a data-driven marketing model, budgets are still heavily steered by past experience.
The disconnect between marketers’ intentions and capabilities is mirrored elsewhere in organizations, according to IBM surveys. Most organizations (70%) believe in the importance of cloud, analytics, mobile, social computing and security, but less than 10% are ready for it.
Lummus said the disconnect means the industry is still falling short. Most companies are saying they want to be data driven, and while they may be doing more on a strategic basis, that’s not the case when it comes to marketing, he said. “It’s not just about being there, but about delivering a coordinated experience that is an exceptional experience for the customer.”
Business has always been about the customer, and that has become even more critical in the information economy as the importance of the customer experience (CX) gains momentum. Customer satisfaction – or dissatisfaction – is a growing issue:
-by 2020, customer experience will overtake price and product as the key brand differentiator;
-the revenue impact from a 10% improvement in a company’s customer experience score can translate into more than $1 billion;
-in 2013, 62% of global consumers switched service providers due to poor customer service experiences, up 4% from last year;
-67% of US online consumers say they’ve had unsatisfactory service interactions in the past 12 months; and,
-53% of customers say they have experienced very poor, poor, or just okay service.
“Instead of companies managing customers, empowered customers are managing brands,” said Darryl McDonald, President, Teradata Applications, at last year’s PARTNERS User Group Conference. Data-driven marketing is digital disruption, a “business phenomenon with a body count,” he said.
As far as the future goes, the study reported that by 2019, the average investment in digital marketing will be approximately 40% of companies’ total marketing expenditure, up from about 25% today. Mobile will continue to be an area of emphasis, with 34% saying they plan a significant increase for 2015.
The capabilities that will get the most attention are segment-level and real-time personalization. Teradata said both are priorities, and immediate beneficiaries of the data and application integration efforts that are under way at so many organizations. Just over half (51%) are focused on personalizing the customer lifecycle (e.g., key phases of the purchase process), while only 14% report doing no personalization whatsoever.
Teradata is not standing still while the market transitions to a data-driven focus, according to analyst Jeff Kelly, The Wikibon Project. “Teradata is a heavyweight in the data warehouse world, but that world is undergoing rapid change. As a result, Teradata is taking significant steps to make sure it has a place atop the developing Big Data landscape.”
The company has made a number of acquisitions, including Hadapt, Revalytics and Think Big Analytics. “Wikibon believes there is significant market opportunity for vendors that deliver such [Big Data analytics] applications, and Teradata, with its long history in the analytics business, is well positioned to capitalize on this opportunity if it chooses to do so.”
Lummus said the good news from the survey is that marketers seem to be catching on and are moving – albeit somewhat more slowly than Teradata and its peers would like – in the right direction. “We’re noticing the starting of a tipping point of people making the right investments… and how to get there.”