How brands can turn consumer data into a powerful commodity

Not too long ago, data was widely considered the new oil, used by brands and businesses to grease the wheels of their performance and growth. Studies show that businesses collect in the region of 2.5-quintillion bytes every day. That is a significant amount of data to sift through and make sense of. With such an avalanche of data every day, marketers have become inundated, rendering the data worthless if its value is not fully extracted.

Given this, a new approach to data is needed. One of my gurus, David McCandless, coined the phrase “data is the new soil”. It resonates with me as soil is about planting seeds for growth, implying an approach that is slower, more considered and richer in detail, and zones in on key insights.

Businesspeople in general — and marketers specifically — are overwhelmed by the amount of data they collect; this is illustrated by the fact that just 14% of the businesspeople we surveyed this year in the 2023 South African Customer Experience Report said they always use the data they have mined from their consumers. This is in stark contrast to the 69% of consumers who believed brands are indeed reviewing their data and their feedback to provide value back to them through its analysis. There is, therefore, a huge chasm between businesses’ ability to action data and feedback and their customers’ experiences and expectations.

This emerged from the research studies conducted this year as part of the 2023 South African Customer Experience Report, which I co-authored with Rogerwilco CEO Charlie Stewart and Julia Ahlfeldt of Julia Ahlfeldt CX Consulting. The report is now in its fifth iteration. 

As an anecdotal example, a senior marketer in the grocery retail sector who we surveyed said: “We likely gather more data than necessary or that we can use. Use cases for data have built up over time but not all of these have been viable to execute.” For the consumer who has happily, and perhaps unknowingly, given away their data, this is not in their best interest.

As we can see, there is a massive difference between what businesses are able to action and what their consumers think they are doing in exchange for mining their personal information. Of interest, our report found that the older, wealthier cohort were less likely to proffer their data while younger men were more likely to do so. Either way, consumers are becoming savvier and while they’re mostly willing to provide their data, they increasingly do so only in return for something — loyalty points or discounts, for example. I don’t swipe my loyalty cards in store unless I know I am getting something in return.

Another key area that needs to change is the critical need for a data curator, someone in the business that manages the data sourcing and analysis and then, very importantly, can tell the story that it presents. As the saying goes, the devil is in the detail. This curated insight must be taken back into the business to get the buy-in from the full team. Only then can this wealth of information be used positively to refine customer insight, adapt business models and improve customer experience to ultimately increase sales. 

The key to providing a great customer experience depends on how consumer data is collected and interpreted. For instance, mobility data collected off consumers’ phones now allows shopping centres to see at an aggregated level where they shop, dine, spend their leisure time and even reside. Another, perhaps more invasive, example is that of insurance companies. Now that they have the ability to understand driving behaviour — for instance, if a driver goes through a red light — they can adjust a customer’s premiums based on how they drive. 

The opportunity that this significant amount of data availability presents is that businesses can better understand their customers, in addition to accurately engaging consumers in their broader target audience — but only if they know what to do with the data they collect. In doing so, current customers can be retained, while new consumers can be acquired. 

Being responsive to feedback is also a core part of retention: brands that don’t deliver on their promises or experiences receive a greater number of poor reviews across their consumer channels such as on social media, Hello Peter and even the brand’s website. This has a snowball effect: once one customer posts a poor review it can influence another, and so on. This is extremely damaging to brands. Our research found that 67% of consumers read reviews on websites, while a similar number do so on social media. With reviews accounting for a whopping R40.7bn in retail spend at the on- and offline till point — according to extrapolations from our report’s insights — brands are well advised to create exceptional experiences that keep their customers coming back and transform them to become powerful micro-influencers if they post a good experience on the various channels available to them.

Data is a precious commodity that, when used correctly, can open many doors for businesses to capitalise on. Yet we see that too few know what to do with the deluge of data that they acquire, let alone process it and apply the key insights.

My advice is to dedicate a person or team to data curation to ensure that data is fully utilised. This data curator needs to tell the broader business the story about what the data means and how it can be applied in the business. Big data, once all the rage, often allows businesses to automate existing business at scale and on an ongoing basis, but at the same time, businesses also need a far more considered and thoughtful approach to using data to make more strategic and long-lasting changes to improve their value propositions or redirect energies to a new target audience. Seeing data as the new soil on which to build a winning business is a win-win for businesses and their customers alike. 

Amanda Reekie is the founding director of ovatoyou and co-author of the South African Customer Experience Report 2023.