What’s changed in digital #2 – “Data is the new oil”

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data_is_the_new_oilIt would seem that last times post about the decline in effectiveness of PPC went down well, so it’s time for my next post in this series. This time it’s data.

I’ve seen an interesting trend over the last 12 months of online businesses realising that they are probably sat on their biggest asset.

Ask anyone who’s worked in mail order and they’ll tell you that working the database and maximising lifetime value is crucial to their business success. Those traditional catalogue businesses are now not just mail order, they’re home shopping businesses, often efficiently tieing up online and offline channels, the marketing through each and the purchases through each.

What’s been interetesting though is that those businesses that have either started as pure-play online and ecommerce, or those retailers who are now selling direct online, have in the main been slow to get their data in order. I’ve met with three or four businesses over the last two months that have hundreds of thousands of customer records and little or no segmentation, data strategy or customer journey planning.

Why is that?

Well it’s probably because those selling online often don’t realise that they are not just selling online. Realistically there is no such thing as just an ecommerce business, in the same way that a catalogue only business or one that only takes orders on order fomrs is missing out on a great big chunk of their market. Many are advertising and promoting their business offline too.

Ecommerce businesses used to believe that it’s all about online; the last 5 years have seen businesses be able to develop profitable models mainly through PPC acquisition and “one size fits all” email marketing. My previous post discussed PPC, and we all know how annoying untargetted and irrelevant email is.

Retailers selling online often don’t realise that their ecommerce website is a home shopping business, not a retail business. Very few retailers use data extensively to drive repeat sales and deepen the customer relationship. Many refer to their website as their biggest store and some even give it a store number. It’s not just a different store, it’s a different business that needs diffrent skills within it and a different approach to marketing.

So all you who know your home shopping know that profiling your data and creating tight customer segments will best allow you to send the right communications with the right messages through the right channel at the right time to maximise how much your customers buy – that’s building lifetime value.

Thank goodness this is an area of opportunity I can exploit for clients and deliver real results in this digital world. And thank goodness I’ve spent time with those direct and mail order marketers that still have much to teach online.

It’s time to get your data in order and get some strategy if you haven’t already!

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On January 22, 2013
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