“Rivals cannot unlock or simulate your data. Data is the defensible barrier—not algorithms.” These are the words of Andrew Ng of Chinese search giant Baidu in a recent New York Times article.
The article also stated: “For decades, dominance in the technology industry was based on software or hardware. Now it is increasingly based on who owns the best data.”
Data Is A Competitive Advantage—If Used To Improve Customer Experience
Data is the competitive differentiator in terms of preference-driven customer experience and personalization. It is also a strategic firewall against competition.
Your competition cannot duplicate or simulate your data. But data sitting idly in your servers or used only for sales messaging will not catapult your company to the next level. It is the customer insights in your data that are your competitive uniqueness. Success will be based not only on the quality of data, but its creative utilization.
In an Infosys whitepaper, “Transforming Big Data Analytics into a Competitive Advantage for Insurers,” it was noted: “Having access to rich sources of data and using that data to enable effective decision-making are two separate aspects.”
Per VoC research conducted by our firm, today’s personalization is broken. It relies on implicit data, i.e., web browsing behavior, data mined from social media, data modeling, and purchase-based behaviors. These are not providing the necessary depth of information to drive relevant communications and offers. As a result, most attempts at personalization simply do not drive the expected increases in response.
Marketers must now make a profound shift and move to human data, which is based on explicit, self-profiled, opt-in preference data. Human data personalization is unique in that it lends itself to segmentation based on self-described personality types, attitudes, and life stages. Human data-based personalization is consistently driving double-digit response rates.
New Data Collaboration Partnerships Are Essential
The acquisition of LinkedIn by Microsoft was an innovative strategic data-based move. With the acquisition, Microsoft can now leverage the approximately 467 million names in LinkedIn’s database to market its products, such as Office 365. According to Bill Phillips, vice president business applications at Microsoft, the LinkedIn database along with other sources “will power a set of insights that we think is unprecedented.”
Realizing the importance of the data it has mined, Progressive Insurance joined forces with European insurance company The Generali Group to enter into a research and development collaboration to improve their individual data analytics capabilities.
“Collaborating internationally with Generali allows us to further expand and deepen our customer insights,” said Pat Callahan, personal lines president of Progressive Insurance. And Valter Trevisani, chief insurance officer of Generali, said: “The collaboration with Progressive allows Generali to accelerate the execution of the strategy in regards to connected insurance and advanced analytics.”
Advanced Human Data: The Ultimate Tool For Preference And Customization
In a McKinsey & Company report, the following points were noted:
- “Advanced data analytics is a means to an end. It’s a discriminating tool to identify, and then implement, a value-driving answer. And you’re much likelier to land on a meaningful [answer] if you’re clear on the purpose of your data.”
- “The impact of big data analytics is often manifested by … incrementally small improvements. If an organization can atomize a single process into its smallest parts and implement advances where possible, the payoffs can be profound.”
There is a consumer expectation gap between what consumers want delivered and what is actually being presented to them. In findings from our own VoC research, we have identified the following requirements:
- Marketers must rethink data strategies to provide “smart” personalization that goes past short-term implicit data to long-term, relationship-building human data.
- Every department and channel must respect customer preferences.
- B2B and B2C customers are willing to provide trusted brands with deep business and personal information in exchange for more personalized offers and communications.
Sportswear manufacturer Adidas has committed to improving customer relationships by merging previously siloed data to enable the company to move away from atomistic bits of data to an interconnected 360-degree approach. Per senior project manager Sokratis Kartelias, the data overhaul uses “shared metadata service to deliver the most compelling, relevant, and relatable content to the right consumers. The company plans to do this by processing their consumers’ responses database to continually update personalization to be as relevant as possible.”
For years, data was something collected and used primarily for outbound sales. Recently, marketers are expanding the vast possibilities that human data provides for customer insights, product development, new channels of engagement, deep-level personalization, and so much more. This high-value data will help propel your business to the next level and serve as a formidable firewall against competition.
This article originally appeared in PossibleNOW.