Data is like water. It’s everywhere, in enormous volumes. But just as an entire ocean won’t quench your thirst, all the customer data in the world does you no good if you can’t access it and apply it for your specific purpose.
We rarely give the instant availability of treated, usable water any thought. But think of the level of interoperability required to make that happen. And think of how much more challenging life would be if we had to start all over and find a source of uncontaminated water every time we were thirsty.
Well, that scenario pretty much describes where the advertising industry is in its search for actionable customer data. Many of us are still figuratively blundering through the wilderness with a divining rod, with 89% of CMOs saying customer data isn’t readily available. And even when we manage to find the source of good data, we don’t always have the means to safely tap into it.
Data That Flows Like Water? It’s Not a Pipe Dream
Think of how much better off we would be if we could all apply the right data for the right purpose — acquiring new customers, retaining existing customers, refining a product line, etc. — right from the jump. Furthermore, imagine if your data pool was a shared resource, equally available — and equally valuable — across all departments within your brand.
It can be.
How? The first step forward is to take a step back. It’s easy to get overwhelmed by all the pain points standing in the way of progress — especially when you consider that there are as many potential pain points out there as potential customers. But most fall into a handful of broad categories. These include:
So how (and where) do you begin dealing with these pain points? The logical answer, of course, is to start at the source. But this is surprisingly difficult. The problem when addressing pain points is that we tend to focus on treating symptoms rather than root causes.
I have real-world experience with this phenomenon. For years I suffered from debilitating back pain. I tried everything from acupuncture to massage therapy. None of it worked. Why? Because every treatment was directed at where I hurt, not why I hurt.
The breakthrough finally came when I changed my perspective and found a whole new set of data points that explained my pain — and revealed the keys to healing it.
Struggling with Customer Data? You’re Not Alone
Sixteen years of building data solutions at Lotame has made me appreciate just how nuanced a challenge it is. Collecting customer data is just the start — you also have to unify it, model it, analyze it, and enrich it in order to make it actionable for a specific application.
How you go about that depends on your unique circumstances. What, exactly, do you need your tech stack to do? In a very general sense, every company wants to keep the customers they have and also find new ones. But even this “rule” has exceptions. If the cost to acquire a customer exceeds the return, for example, it’s not worth it … unless it’s just the initial cost that exceeds the return. If the lifetime value of that customer eventually exceeds that initial investment, then it’s worth it.
Making that determination is a complex process. You start by collecting whatever first-party data you can, both known and unknown, and unifying it so you can understand a customer profile. Then you do a deeper analytical dive to find out more about your customers, and expand that customer profile using other high-quality data sources. Only then can you fully activate that data for acquisition and retention, audience intelligence, monetization and more.
Everybody into the Pool
I’d like to wrap this up by widening the lens and taking a broader, more holistic view of our industry. Yes, this is a highly competitive space, and I love that about it. But I also recognize that we can all benefit by addressing our challenges together, especially when it comes to consumer privacy regulations.
A good start is to think of data as a critical resource — as vital to our survival as water.
As an industry, we need to work together to enable interoperability, dismantle data silos, and implement privacy protections similar to the safeguards in our public water supplies. Because if we don’t do it ourselves, outside regulators will do it for us.
Once we understand our real data pains, we can all begin to reach our full potential. That means each of us will be able to address our own particular pain points on our own terms.
We should all be empowered by data, not enslaved by it. A first step toward empowerment is to trace the real source of our data pains. Once we’ve done that, we can address our own particular pain points on our own terms. Only then can we reach our full potential.
This article was written by Lotame founder and CEO, Andy Monfried.