Is Consumer Intelligence the New Winning Competitive Strategy for 2020?
Infutor CEO Gary Walter shares consumer data intelligence insights that will shape the customer experience and data privacy landscape in 2020. Walter predicts that the use and protection of consumer intelligence data will take on heightened importance and continue to dominate the conversations of regulators, marketers and business decision-makers alike.
A new year inevitably prompts both a look forward and a look back at the ideas and technologies that shape our role as marketers. While trends such as facial recognition, AI and voice technology didn’t advance as rapidly as predicted, consumer intelligence gained a greater share of the spotlight. And in the year ahead, I believe the use and protection of consumer intelligence data will take on heightened importance and continue to dominate the conversations of regulators, marketers and business decision-makers alike.
In particular, organizations must glean maximum insights from customer data while ensuring the data is used ethically and giving individuals the ability to control their personal information. I predict that 2020 will be the year that data science and data privacy fully converge into a workable solution for marketers, consumers and regulators. The organizations that can operationalize this solution to better serve their customers will outperform their competitors.
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Marketers Amp up on Data Science
According to the US Bureau of Labor Statistics, “Overall employment of mathematicians and statisticians is projected to grow 30 percent from 2018 to 2028, much faster than the average for all occupations. Businesses will need these workers to analyze the increasing volume of digital and electronic data.” Not only will businesses need these number crunchers, they’ll need data science specialists who can dig deep into business data to derive insights that were previously impossible to obtain.
In particular, marketers must incorporate analytics into their daily decisions around lead generation campaigns, advertising, events and the myriad other ways marketing dollars are allocated to affect brand awareness, loyalty and customer retention. Many marketers have already embraced analytics, but there are still a lot of “old school” marketers out there who rely more on their insights and experience than on the data.
2020 will see data science and analytics come into sharper focus, especially as younger marketers with data science backgrounds enter the workforce. Not only will data analysis help maximize budgets, but data-driven insights from consumer intelligence will allow marketers to fine-tune the combination of channels that will most effectively target a particular audience segment.
Data Privacy Regulations Proliferate
US marketers who paid less attention to GDPR because it only covered EU citizens might now be regretting that decision. With the enactment of the California Consumer Protection Act (CCPA) and its effective date of January 1, 2020, organizations must have processes in place for consumers who wish to assert more control over the use and sale of their individual data.
California’s regulations are only the tip of the iceberg, since the state has led the country in many ground-breaking standards that companies adopt nation-wide, such as for product safety and vehicle emissions. Eleven other states have adopted data privacy and protection laws that came into effect in 2019 or will in 2020. And since it appears that the federal government won’t be addressing national privacy standards in the near future, marketers and their organizations will have to adopt practices that anticipate and address these state efforts.
While marketers are not solely responsible for an organization’s use of customer data, they are certainly at the forefront of ensuring that marketing systems and practices are compliant. Rather than view this as a burden, it benefits marketers to see that their responsible handling of consumer intelligence is actually an instrument of good will and respect. Customers who see their data is being used to offer them relevant information and an enhanced experience are more likely to have a positive view of the brand.
Data as a Tangible Asset
Customer relationships have long been viewed as an intangible asset, but there are cases where valuation is needed, such as for tax or litigation purposes, or when a company is acquired. Customer relationships can be valued using accounting methods, based on how much it cost to acquire a customer, or on future cash flow projections offset by a rate of customer attrition.
However, these methods largely consider the value of customer lists without taking into consideration the accuracy of the consumer information including recent transaction history and behavior. With the consolidation of consumer brands, I believe we’ll start seeing a dollar value placed on consumer intelligence marketing data – and treatment of this data as a tangible asset.
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This new value will be influenced by factors such as the health of the data, along with an examination of the outcomes of the decisions based on the data. If consumer intelligence data leads to accurate predictions of purchasing behavior, its value will be higher. Another important factor will be whether the data is compliant with relevant regulations. If data has not been maintained in accordance with data privacy laws, it could easily become a liability for an acquiring company.
The use of consumer intelligence data and data privacy regulations may appear to be competing forces, but they’re two sides of the same coin known as the customer experience. In 2020, it will become evident that the ethical use of high-quality consumer data will be a winning competitive strategy.
