3 Reasons CMOs Should Think Like a Data Scientist
By John Nash | 9.27.18
David Ogilvy once said, “Advertising people who ignore research are as dangerous as generals who ignore decodes of the enemy.”
That assertion has never been truer than it is in marketing today. Modern CMOs need to expand their worldview, and there is no better research than all the behavioral, transactional, and demographic data now accessible. Those who don’t use it effectively may just as well hand over their customers to the competition.
Why is data-driven thinking now an imperative? There are three primary reasons that marketers need to think like data scientists:
1. Relevance and personalization are driven by data
Marketers have access to more types of data, from more sources, than ever before. That breadth can be overwhelming to marketers who lack an understanding of how to get the most from all that data.
Marketers must be data-driven to uncover the insights they need to truly understand their customers and all the nuances of reaching those prospects and customers at the optimal time with the most relevant message. This targeted relevance will increase revenues and retention, while also avoiding wasted spending through poor targeting.
It’s no wonder that 71 percent of marketers polled say that personalizing the customer experience is their top priority, according to the study “Data-Driven Marketing for Personalization Success,” by Ascend2 conducted in partnership with RedPoint Global.
2. Customers are generating more data through connectivity
Nearly every digital action a customer takes—from social posts to product research to content downloads and more—leaves a breadcrumb that forms a trail. That trail can lead marketers to the Holy Grail of customer insight: real-time personalization that is in the context of the customer’s journey. But only 7 percent of marketing executives say their team has achieved this type of real-time ability, according to the CMO Council study "Empowering the Data-Driven Customer Strategy," conducted in partnership with RedPoint Global.
Customers have no patience for mistargeting and overcommunication. Irrelevant and repetitive messages lead directly to fatigue and churn. Not surprisingly, 53 percent of marketers polled say that “a demand to deliver more relevant communications and be more customer-centric” is the top factor driving their investments in data-driven marketing and advertising, according to "The Global Review of Data-Driven Marketing and Advertising," a joint study from the DMA and Winterberry Group.
Taking a data-driven approach to marketing enables personalization in terms of messaging, cadence, and frequency. This allows marketers to create the right conversation in the preferred context and at the preferred speed of each customer. One conversation might include an offer, another an exclusive preview, and another helpful content—each of which is best driven by a customer’s stated and implied interests and preferences. Better personalization increases engagement, conversion, and retention.
3. Enterprises that are data-driven are more successful overall
The stakes are high. Boston Consulting Group forecasts that $800 billion in revenue will shift to the 15 percent of companies that get personalization right over the next five years in three sectors alone: retail, healthcare, and financial services. Recent intuition has guided marketers to invest in data, but it's now imperative that those investments be targeted in ways that deliver true competitive advantage and revenue lift.
Data-driven marketing organizations are five times more likely to achieve a competitive advantage in customer retention: 74 percent versus 13 percent, according to the Forbes Insights research report "The Rise of the New Marketing Organization." The report also found that data-driven marketing organizations are 6X more likely to increase profits: 45 percent versus 7 percent.
So, what is data-driven thinking?
Thinking like a data scientist means always stepping back to ask a question or pose a hypothesis about how to best achieve a specific goal, modeling it with data, and then using the data and insights as an integral part of operations. This means leveraging data to guide individual customer journeys within and across all enterprise touchpoints. This effectively bridges your customer strategy to execution, and optimizes marketing effectiveness.
Data-driven thinking is also about have a testing mentality; designing and creating tests that help determine the best actions and decisions, as well as help optimize customer journeys, campaigns, and initiatives by constantly learning from actions and results. Continual learning means being diligent about data quality as well, as results will be sub-optimal with data that’s incorrect or irrelevant.
Finally, thinking like a data scientist means asking, “How can I leverage technology to achieve my goals, and to answer important questions?” For example, how can marketers use the marketing technology at their disposal to create a single, unified customer view that enables cross-channel personalization, to optimize campaign performance, or to improve speed to market?
Data-driven thinking is a mind-set. Engaging in data-driven marketing in the right way will lead to profitable revenue growth and sustainable competitive advantage. If you’re not already thinking like a data scientist, it’s time to change your mind and adopt data-driven thinking.
About the Author
John Nash has spent his career helping businesses grow revenue through the application of advanced technologies, analytics, and business model innovations. As Chief Marketing and Strategy Officer at RedPoint Global, John is responsible for developing new markets, launch new solutions, building brand awareness, generating pipeline growth, and advancing thought leadership.
John invented several patented business methods, and coauthored The Deciding Factor: the Power of Analytics to Make Every Decision a Winner.