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October 7, 2016

Missed Opportunity for Customer Insight

Summary:

Marketing automation systems show a lack of integration of customer insight. This is such a missed opportunity.

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Customer insight (CI) teams can take different forms in different businesses (partly rightly, to reflect the needs of that business). One such variation is reporting line. Some CI teams report into operations, sales, IT or even finance. However, by far the most common reporting line is into marketing.

See also: 3 Skills Needed for Customer Insight  

That makes sense to me, as over the years I have seen more and more applications for customer insight across the marketing lifecycle. Increasingly, marketing teams are realizing that use of data, analytics, research and database marketing techniques is part of their role. Sadly, these technical teams are, too often, still separated. But at least there are signs of collaboration.

Marketing Automation:

Companies and leaders also recognize different applications of insight to marketing. Some focus on early-stage roles in strategic decisions, some on proposition development and some on campaign execution or marketing measurement. Very few appear to use customer insight in all they do.

Meanwhile, one of the trends of recent years has been the adoption of marketing automation systems. In some cases, the term has almost been used to replace the infamous customer relationship management (CRM) system. But, for many businesses, it is more about bringing a structured workflow, resource management and quality controls to the work of marketing teams. Talking with consultants who specialize in helping businesses implement marketing automation systems (none appear to work straight out of the box) reveals a sadly lacking focus on customer insight.

This is such a missed opportunity. The marketing workflow needed by today’s business requires input, validation, targeting or measurement at almost every stage. But it seems that marketing automation designs are not routinely embedding customer insight deliverables into marketing processes.

Regulation:

It is perhaps surprising that more focus has not been put on automating routine use of insight in marketing, given the regulatory environment.

Whether you consider certain vertical markets (like the role of the Financial Conduct Authority), or the higher hurdles coming to all data uses (with the adoption of general data protection regulation, or GDPR, principles), marketers will need more evidence. Those data marketers keeping up-to-date with their professional responsibilities will realize they need to evidence suitability of their offerings, targeting of their communications and appropriate use of data.

Where’s the gap?

So, in what parts of the marketing lifecycle are marketers neglecting to use customer insight? Where are the most important gaps?

Based on my consultancy work, often helping companies design their customer insight strategy, I would identify the following common gaps:

Participation decisions:

  • Either not having a clear understanding of market segments, or not making participation (product categories or distribution channels) based on segment fit or size of appeal.

Communication design:

  • The use of insight generation has grown for product design (as per our recent series), but too few marketing teams also use that same insight generation to design their communication.

Communication testing:

  • Quite often this is left to ad hoc qualitative research, with insufficient use of techniques like eye-tracking or quantitative experimentation at concept stage.

Event triggers:

  • Identified as important to targeting in two recent research reports, from the DMA & MyCustomer/DataIQ, event triggers deserve to be more widely used in targeting marketing campaigns. For further thoughts on why you don’t just need propensity models, see previous posts on both events and propensity models.

Holistic marketing measurement:

  •  As more and more marketing directors are expected to report on their return on investment (ROI) or return on marketing expenditure (ROME), once again insight can help. Not just the traditional role of database marketing practices, in reporting incremental return against control groups, but also, increasingly, the design of holistic measurement program (converging evidence from brand tracking, econometrics and other data sources). This previous post shares some more detail on that.

Will you be insightful or ignored?

In closing, I’d encourage all customer insight leaders to get closer to those leading marketing in their businesses. Marketing will become increasingly challenging over the next 12 months. CI leaders have the potential to become trusted advisers who can support marketing directors in navigating those choppy waters.

See also: The 4 Requirements for Customer Insight  

To return to the theme of regulation. I once more advise readers to not underestimate the potential impact of the EU’s general data protection regulation (GDPR) on their businesses. Despite Brexit, every commentator seems to agree that this regulation will affect U.K. businesses. The most eye-catching element may be the scale of potential fines (as much as 4% of global annual revenue), but the changes to consent may affect marketers more. The new hurdle will be proving positive unambiguous consent. Many businesses may conclude they need to move to opt-in for all marketing content.

So, going forward, the biggest threat to marketers (those not embedding insight into their processes) may not just be losing customers. It may be losing the right to talk to them!

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About the Author

Paul Laughlin is the founder of Laughlin Consultancy, which helps companies generate sustainable value from their customer insight. This includes growing their bottom line, improving customer retention and demonstrating to regulators that they treat customers fairly.

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