Tuesday, July 24, 2012

Share. Or else.

No one doubts the value of customer data to the modern corporation these days.  However, plenty of these marketers would readily admit that they don’t get the value from the data that they wish they did.  Why is that, exactly?

Technology seems like a barrier, insofar as customer data may lie across multiple systems that do not share a common structure.  However, tools like Hadoop and plain old IT elbow grease can overcome that barrier.

Security also seems like a barrier.  After all, most corporations take their privacy responsibilities seriously.  However, with the noted exceptions of health care, financial services and children’s products industries, US corporations marketing to US consumers really have few privacy laws preventing them from using data effectively.

In my experience, the modern corporation itself lies at the root of the problem itself.

To get even more basic, the problem breaks down to money.  Collecting data requires money.  Maintaining and analyzing data requires money.  Of course, employing those data to make addressable communications work harder makes money.  And therein lies the rub.

Imagine an online retailer that has both consumers and small businesses as customers.  Chances are, the owners of those small businesses also buy goods for their homes.  However, the consumer marketing organization at this retailer and its sister organization on the small business side keep their data separate.

The consumer marketers might want to know about what their customers who own small businesses buy on the business-to-business (B2B) side of the site and vice-versa.  After all, if a small business owner put in a large order for her company, then the consumer marketers might make it worth her while to throw in a few things for her family along with the big order.  Similarly, the B2B marketers might want her to cross-shop items for her small business while she shops for her home.

However, in most companies, the two sides of the business would find more risk than reward in sharing the data.  It would cost the consumer marketers to pull the data for the B2B marketers and they would get nothing for their troubles, at least nothing that they could show their bosses come annual review time.

As much as I hate management platitudes, I can’t argue with Peter Drucker’s maxim that “you get the behavior that you reward.”  As a rule, corporations place more emphasis on internal competition than cooperation, but that’s a story for another time, perhaps.

Having faced the data sharing issue more times than I care to remember, I wonder why the executives at these companies don’t incentivize data sharing.  Creating an incentive wouldn’t take much--perhaps giving the data donor credit for a share of sales by the receiver.  Naturally, the executives would want to define what “credit” means in this case and also they would want to tinker with how much of a percentage to award (perhaps by estimating lift from the added data).  However, it wouldn’t take much to arrive at an agreeable set of figures.

More importantly, the executives should keep their eyes on the prize.  No blanket number exists to describe the lift created by merging data sets.  Nevertheless, given the chance to know more about a customer, most marketers will choose to know more because that knowledge pays out.

And if you’re one of those marketers licking your chops over what the folks on the other side of your office know, why not make the first move by offering your data to them?  What they don’t know--and what you don’t know--might make all the difference.

Hey, if you’ve got a better idea of how to incentivize sharing, or if you’ve done it yourself, please, um, share with us in the comments!

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