Tapping overlooked marketing data to drive business growth
Researchers from University of Houston, Columbia University, Emory University, and University of Connecticut published a new paper in the Journal of Marketing that reviews factors that contribute to the disconnect between the data companies create and the productive use of that data.
The study, forthcoming in the the Journal of Marketing, is titled "Capturing Marketing Information to Fuel Growth" and is authored by Rex Du, Oded Netzer, David Schweidel, and Debanjan Mitra.
Digital home assistants and wearables have become more popular than ever, collecting detailed information from consumers. In addition to the data explosion, the public offerings of Palantir and Snowflake highlight the rise of companies focused on big data analytics. Yet, despite enterprise leaders' and researchers' optimism in the potential that data holds, there is still a disconnect between the volume of data created and the ability of organizations to harness that potential to drive growth. A new article in the Journal of Marketing reviews factors that contribute to this disconnect, drawing attention to organizations' tendency to focus on data that is easier to access and measure and highlighting overlooked data sources that offer considerable opportunity to support growth.
To examine how marketing data can be leveraged to drive organizational growth, the researchers look at the different ways value can be created for the organization. Drawing on the customer equity framework, they review how marketing data may support growth in customer acquisition, customer relationship development, and customer retention.
With regards to customer acquisition, the study probes the potential for organizations to make use of biometric data to support acquisition efforts, such as identifying the ideal time and means of engaging prospects. It also identifies opportunities to use social network data to make acquisition efforts more efficient and effective by leveraging existing social ties that may facilitate the spread of marketing messages. In developing customer relationships, the researchers discuss what can be gained from identifying and predicting trends so that organizations can stay ahead of the curve. They also highlight how customer-level competitive intelligence can be gathered and used to grow existing customer relationships. To support customer retention, they illustrate the potential to take advantage of unstructured data such as call center logs and videos of service interactions to support firm representatives by providing them with real-time feedback. They also discuss the value that can be derived from data that supports causal inference and how this may be used to support proactive churn mitigation efforts.
Du elaborates that "While we see tremendous potential in tying marketing data to firm growth, we cannot ignore the challenges to implementing a data-driven growth strategy. Specifically, how does an enterprise move from obtaining control over data and deriving relevant insights to implementing a data strategy? For marketing data to drive organizational growth, marketers must consider data as a component of a strategy problem. That is, how can emerging sources of data be brought into alignment with an organization's growth strategy? To do so, we call for not only quantifying the value of marketing data, but also recognizing the full cost associated with leveraging data." The latter point has been brought to the forefront in recent documentaries like The Great Hack and The Social Dilemma, highlighting the potential use and misuse of consumer data and forcing us to question what we consider appropriate uses of data. Netzer adds "With regulators taking action to protect consumers, from the General Data Protection Regulation (GDPR) in the European Union to the California Consumer Protection Act (CCPA) and the proposed California Privacy Rights and Enforcement Act, marketers will need to grapple with balancing growth through data with consumers' rights."
More information: Rex Yuxing Du et al, Capturing Marketing Information to Fuel Growth, Journal of Marketing (2020). DOI: 10.1177/0022242920969198
Journal information: Journal of Marketing
Provided by American Marketing Association