You Are What You Eat

You Are What You Eat
 

We were told as children to eat our vegetables because they were good for us. More times than not, our parents said that to be healthy we had to eat the right foods. The truism of “you are what you eat,” however, has applicability far beyond the dinner table. For children it was about carrots; for business it is about data.

It is cliché to say that data is a company’s lifeblood. We may pay only lip service to data, but often that is all we pay. Data management in all its forms is too often underfunded, understaffed and misunderstood. It is important to be talking about this as we enter the season of strategic planning and budgeting.

Too many retailers, wholesalers and brands are predisposed to cut programs like data management for short-term budgeting imperatives, but fail to appreciate the long-term impact of their actions. Programs like Master Data Management can be viewed as expenses to be cut, rather than contributors to sales and profitability. Invariably over time, these choices have revealed to be a false economy.

Avoid the empty calories of poor data
Very often we fail to distinguish between data volume and data quality. Data quality requires ownership of the responsibility for data completeness that many companies overlook. CIOs routinely assure their organizations that they can deliver every piece of data that the company would ever need, but this is an assertion often made without context.

For example, take the assertion that the company has an email address for every customer in its transaction data. This may be true from the CIO’s perspective, as a data field exists within the transaction set. Though the data field for customer email may exist, it fails to account for the very low occurrence of customers providing their personal information at the point of sale; thus making the data at best incomplete and at worst deceptive.

A healthy business depends upon using fresh information
Data must be defined by how it is used. This is the responsibility of the entire organization, not just the technical team. Unfortunately, if the enterprise defaults on this, the IT organization is left with no alternative but to treat the data as though it were fixed, missing the critical aspect that data is dynamic, constantly evolving, and being shaped by competitive influences and customer expectations.

For many years, the retail business has struggled to adapt to the day’s complex and competitive landscape because its data model has been starved by a store-centric mentality. The rapid adoption of e-commerce by consumers has brought into stark relief the difference between retailers, separating those who could adapt their data model from those that could not. The fates of these short-sighted retailers that fail to improve their data practices should serve as a cautionary tale for all.

Who’s in Charge Here?

Who’s in Charge Here?
 

In earlier writings, we’ve talked about the need to frame transformation strategy around the customer — understanding who they are, how your offering distinguishes you from your competitors and how you will create lasting relationships. You’re confident you have answered the pertinent marketing questions, thus completing your exercise of strategy development and market identification and you’re good to go, right?

Maybe not.

The first path too many brands and retailers go down is an ill-fated effort to fit their digital transformation exercise into the existing infrastructure, with process and culture left largely unaltered. This in effect says “Yes, we’re going to be different, but not change.” The contradiction inherent in this messaging diminishes the chance for success right out of the gate.

Two roads to meet the customer
Brands and retailers first need to develop an approach that recognizes that transformation begins internally before you ever engage a customer. Digital transformation is about changing how you interact with a customer, moving from pushing information to having a conversation. The Chief Digital Officer must play a pivotal role here — evangelizing, educating and guiding the organization. The Chief Marketing Officer’s primary responsibility is to articulate how the brand or retailer will have that customer conversation. Too many brands and retailers fail to understand and foster this role delineation.

The CDO ensures the organization infrastructure, tools and training are all aligned and mutually reinforcing a culture where collaboration is central to both strategic and tactical planning. This requires deliberate change management efforts to shift away from established patterns and adopt new behaviors and technologies.

Data is not a relationship
An inflection point that illustrates this is the CRM solution, how it is employed and the associated marketing programs that draw on this as a primary information source. Customer Relationship Management software was developed to be — and is still viewed as — the primary repository of information about the customer.

It does nothing to promote a customer conversation. But instead is often the source of customer irritation. Inboxes are flooded with promotional offers, based upon past purchases, that are simply deleted, unread. Communication remains largely one-way, impersonal and as such not a promising start to any conversation. Internally, updating the database becomes a dispiriting end in and of itself, with resources dedicated to monitoring completeness and chasing data rather than being used to engage in true customer exchanges.

Here is where the CDO and CMO collaboratively drive transformational changes, starting with the customer and working back through the organization.

Focus on digging better, not digging deeper
Relationship management cannot be synonymous with database management. As more sales move from a purely transactional model to a more consultative approach, every element of the customer relationship needs to respond in new ways. Retailers and brands need to reimagine how they interact with their customers and how they can partner with them to preserve long-term relationships that are sufficiently dynamic to sustain their strength and value through time. This is the first step. It also begins the internal conversation between leaders of organizations. A well-crafted comprehensive digital strategy requires consideration of and input from all corners of the organization, not simply IT.

From here, the CDO is pivotal in ensuring that the operational and technical infrastructures throughout the organization are aligned to support marketing’s vision. The technology strategy, operational processes and organization then enjoy a common point of reference from which to build.

In our next post, we will talk about some options and pitfalls of infrastructure transformation. So, we’ll finish this post as we did the first, with some questions.

You’ve defined your customer. Now what do you want to know about them? What do you want to say to them? What do you want them to tell you? What do you need to understand about your competitors? New markets? Trends? How will you want to break down the data? What information do you want the data to yield? How will the data be collected? By whom? How often?

Answers to these questions begin the transformation of your digital infrastructure.