Data is the lifeblood of your business - that’s why you need a data strategy at its heart
You would be shocked to hear a business had no strategy. You would also be surprised to hear about the absence of sales, marketing, product, IT or people strategies. Yet few would be that surprised to learn a business has no data strategy at all. According to our recent proprietary research, 94% of businesses agree that data is a key investment area for them, yet almost two-thirds of companies have not created an up-to-date data strategy within the last 12 months. You could argue data is everywhere, so every department has to own its data, but this falls foul of the maxim that ‘when it’s everyone’s responsibility, it’s no one’s responsibility’. It’s true that data spans the enterprise, but for genuinely customer-centric businesses, a data strategy is essential in ensuring this vital asset realizes its maximum potential for the brand and also for its customers.
The importance of a data strategy
A data strategy is key to really understanding your business, your customers and for driving growth. Without one, you won’t find the relationships that could help you predict the unintended consequences of your decisions; you’ll miss the definitive traits that identify your best customers; you’ll fail to discover underserved market segments; and you’ll overlook potential efficiencies that could make your operations much more profitable.
But if you define the entities that exist within your business, their attributes and characteristics, and the relationships between them, you’ll create the basis for understanding your business, and for a data strategy. When you add data about the marketplace, competition, regulations and macroeconomic pressures that can affect your performance, you enrich that understanding. And that understanding gives you a way to react to changing conditions and new opportunities.
It takes a data leader to create a strategy
Having a Chief Information or Chief Data Officer will communicate to an organization that data is important. But whether it’s a C-level executive or someone else, there needs to be someone who has the responsibility and authority to create the strategy.
Part of this person’s role will be to energize the rest of their company. Each of its functions will be focused on their areas of responsibility, but while they are important drivers of the data strategy, they may not be incentivized to make the connections between their operations and other parts of the business. It takes a leader to incorporate the data practices from each of these areas and then identify the points at which they intersect. When the data strategy reveals where and how things work together, that’s where you can make changes that create real value.
Data and marketing strategies: working in tandem
There’s a yin and yang between the data and marketing strategies. Data needs to inform the marketing strategy, but you need a marketing strategy to identify the important data. That means it’s best to start with a draft version of each. A data strategy built around the data you have can identify tactics for your marketing.
Tangential extensions of the marketing strategy will identify gaps that you can use to augment your data strategy. The new data that fills those gaps will suggest additional opportunities which will refine your marketing strategy even more. This cycle continues to the point where your strategies are mature enough to ensure you can meet your goals. The progression becomes a constant interplay of insights that extends beyond your initial marketing and data strategies so that they continue to advance as a natural part of your operations.
Implementing the data strategy throughout the business can also be tricky. Too often we see brands undertake a data strategy as a governance activity, as a project designed to limit people’s ability to use their information. Governance is an important part of a data strategy, but the strategy needs to offer more than that. It needs to define the data better so more people and systems can understand it. It needs to create structures where more data can be exposed to the people who can get value from it. And it needs to provide common definitions so that everyone comprehends the data in the same way.
Change rarely, evolve constantly
Your data strategy needs to be updated both rarely and constantly. Wholesale changes can be disruptive, so try to avoid revolutionary change unless there is a significant market force driving it. For example, regulators across the globe are introducing contemporary privacy laws and from time to time there are unavoidable downturns in the economy. A new competitor could enter your market, or you could move into a new market where regulations, cultures and attitudes create the need for new tactics. Your data strategy would have to keep up with all of those situations.
At the same time as looking out, you should also look within, asking operational groups inside your company if they have the data they need and what could be game-changing if they could have it. You should make sure that people understand the data they have and that they know about all the assets they have access to. Asking those questions will present new opportunities.
You might highlight new data sources or different interpretations and uses of existing ones, which will evolve your data strategy so you can build on the things that work well and mitigate the things that don’t. Most importantly, you’ll be able to innovate with data to improve the overall performance of your company.
In summary, data is everywhere, inside and out. Every part of every business now depends on data to merely function, let alone offer a competitive advantage. Having a data strategy means taking responsibility for having the right data, having the data right and for using it the right way to drive business and customer value. Do not be without one.
Today, what’s critical to a marketing strategy is a data strategy. Learn more.
Tom Hutchison, principal product director, Acxiom