Your customer data is personalization gold. Eight principles to mine it effectively.
Imagine you’ve built a village atop a gold vein. This gold vein could unlock the potential of your village – turning it into an empire. Unfortunately, your village may be unable to mine the gold and extract its value. This is one of the biggest challenges facing companies today: unlocking the potential of the data on which they sit.
While firms have no shortage of data, their personalization strategies often fall short in creating a sound technological environment to convert data into actionable insights. According to Forrester’s research paper Personalization Demystified, 55% of firms feel technology limitations inhibit their ability to execute on personalization strategies, citing more specific-technological challenges such as difficulty managing customer data, lack of data integration, and the maintenance and management of database(s). While these are real challenges, none are insurmountable.
Starbucks is a prime example of a company that has unlocked the value of its data. Starbucks leverages the data it collects from nineteen million active users on its mobile application to learn about exact user behaviors. Through their data, they know that Jessica likes to pair her pumpkin spice lattes with a croissant and that Ian likes to order Frappuccinos on the weekends as opposed to his weekday black coffee.
How has Starbucks so seamlessly integrated their data strategy with their business model? They have done so by setting a clear objective for their business, investing in the right tools, and building out the capabilities needed to realize their vision. To properly harness your organization’s data for personalization efforts, you will need to set business priorities, invest in sound data warehousing and analytical software to store and get insights from your data, and upskill your workforce to have the know-how to effectively extract value from your data.
So how can you, as a leader of your organization or team, operate like a Starbucks when it comes to optimizing your tools to enable personalization? You can do so by adhering to eight data principles that should govern your approach, capabilities, and methodologies:
1. Access: Data being stored in silos and not having correct tooling are typical challenges that firms see when it comes to accessing data. Data should be democratized across the organization, meaning that everyone across the organization has access to data needed to enable their business decisions. Tools like dashboards and data visualization promotes accessibility and empowers employees.
2. Trust: The empowerment that comes from data accessibility can quickly turn into disillusionment if the credibility or usage of data becomes questioned. Employees and customers need to trust how data is captured and used, through transparent communication and quality control. Enterprises also need to think about the implications of using data and AI.
3. Platforms: As firms begin to collect more and more customer data, organizing it to derive meaningful insights is becoming more difficult. Organizations should own their data, rather than keeping them in external systems. Utilizing a customer data platform that combines disparate data sources to give users a coherent view will generate insights and drive results.
4. Rigor: Deep and insightful interactions with data are a prerequisite to a fully-fledged personalization strategy. Enterprises must apply rigor to the way data is used and analyzed. Data-driven organizations employ new and comprehensive ways of looking at information, constantly challenging the status quo.
5. Decision-making: It can be easy to rely on “gut-feels” or hunches when devising a strategy. However, to see consistent and effective results, data should be embedded into every strategic and business decision. Utilizing data will allow your company to invest more in what is effective, and less in what isn’t.
6. Culture: Employees hesitating to embrace data literacy can be a huge roadblock to companies on their journey towards becoming a data-driven organization. Organizations should create and foster performance cultures that embrace new ways of thinking and are aligned on the importance of data and intelligent workflows.
7. Architecture: Technological architecture needs to be conducive to the principles mentioned above. Firms should ask themselves if the technology and tools they are investing in are promoting data accessibility and trust. Next generation architecture is cloud-native and driven by the optimal movement and management of data, decoupling data from legacy systems, and incorporating emerging technologies.
8. Impact: Without means to track and measure success, organizations will be unable to assess whether their strategy is working in the way they intended and to refine it when necessary. Data usage should be tracked to measure progress towards goals and value creation and to increase speed-to-value and improve data monetization approaches.
As you embark on your personalization data strategy along the principles outlined above, don’t forget the most important aspect of data: Data represents people. People’s actions, thoughts, moods, desires, ambitions, etc. all get translated into 0s and 1s that provide us insights into how to better serve them.
A successful personalization strategy, like that of Starbucks, ends with your organization taking non-sentient lines of data and code and turning it into a deeper understanding and empathy for your customers’ behaviors, motivations, and aspirations. Adopt an empathy-based approach to your personalization efforts, ensuring that the value you extract from your organization’s “gold vein” is truly benefiting your customers.