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The smart CEO’s guide to strategic data management

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Streaming 4K video uses up to 7 gigabytes of data every hour. In other words, if you streamed 4K television 24/7, it would amount to over 61 terabytes of data each year. That means that the streaming service stores not only those 61 terabytes of content but also data about you, your watching habits, the device you’re watching it on, your account and subscription information, your language and subtitle preferences and thousands upon thousands of other pieces of data.

Data is a driving force behind business in the modern age, which is why Strategic Data Management is too important for businesses to neglect. Strategic Data Management encompasses the entire lifecycle of data, from the kinds of data you collect to how you store and share it.

Key takeaways:

  • Businesses are generating and collecting more data than ever.
  • Strategic Data Management is a holistic framework for managing data from start to end.
  • Optimizely can help you make the most of your data

Data in the digital age

Businesses generate, acquire and use huge amounts of data. The planet generated more than 64 zettabytes (or 64,000,000,000,000,000,000,000 bytes) of data in 2020 alone, a number that’s projected to grow by a compound annual growth rate of 23% every year.

While consumers generated some of that data, 95% of businesses say that managing unstructured data is a significant problem for their organization. As data increasingly drives business decision-making, companies are collecting more data than ever, which leads to a new complexity in storing and managing digital files.

However, despite the growing complexity of data management, it’s proven to be an effective way of boosting sales and increasing ROI. In other words, while data management is a difficult task, it’s an essential one. Data is so valuable for businesses that some have called it “the new gold” of the digital age.

 

Defining strategic data management

Strategic Data Management (SDM) is a set of frameworks or rules that an organization uses to manage data. Every company has data—things from documents to email records to directories. Strategic Data Management goes beyond simple data hoarding, which is why companies use it to gather the right kind of data, store it safely yet accessibly, glean insights and share it securely with others. Strategic Data Management covers four aspects of the data lifecycle: collecting, storing, analyzing and sharing.

  • Collecting data is relatively easy, technologically speaking. What’s harder is collecting the right kinds of data and doing so in a way that makes that data useful throughout its lifecycle. That’s why companies use Strategic Data Management to define data acquisition and retention policies.
  • Storing data used to be simple: back when business data existed exclusively on paper, data storage looked like a filing cabinet or a bookshelf full of ledgers. Today, data storage is exponentially more complicated but also exponentially more important. Data storage has to accomplish two things. First, data has to be secure so that unauthorized users can’t access or modify data. Second and seemingly conflictingly, data has to be accessible so that authorized users can access it reliably and remotely. Walking the balance between security and accessibility is part of why Strategic Data Management is such an essential practice for businesses.
  • Analyzing data is what gives it its value. You already know every phone number in the world… you don’t know who the numbers belong to. Strategic Data Management includes a framework for making sense of data. Without a robust set of rules for how your company collects and stores data, even the best software in the world would have difficulty making meaningful insights out of it, which is why Strategic Data Management must be a comprehensive framework for managing data throughout every part of the lifecycle.
  • Sharing data includes sharing with both internal and external parties. Similar to the double-natured requirements for storing data, sharing data has to be secure and accessible. Companies typically encrypt data when sharing it, a process that involves algorithmically “scrambling” plain text using an encryption key which the recipient then uses to decrypt the scrambled document back into plain text.

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The value of strategic data management

In the past, data was just a byproduct of conducting business. Business activities generated data that companies could use to accelerate growth or discard with little consequence. Today that couldn’t be further from the truth.

Data is a key driver for business decision-making. Consumer data is a valuable commodity—for example, an email address is worth an average of $89 to a brand over time, while medical records can be worth thousands of dollars.

A study by Experian found that 85% of organizations consider data to be one of their most valuable assets, but a lack of understanding hampers their success. Those 85% of organizations are most likely correct: Forbes notes that some companies’ data is worth more than the companies themselves. For example, American Airlines’ market cap (a not inconsiderable $8 billion) is completely overshadowed by the $19.5-31.5 billion dollars of customer data they own.

If this data is so valuable, why aren’t companies capitalizing on it? Simply put, they aren’t using Strategic Data Management to its full potential. Much of this precious data disappears into history: companies only capture a little over half the data they have access to and only leverage a little over half of that. Altogether, companies use less than 32% of the data they have access to, leaving the other 68% either uncaptured (44%) or unused (24%). 

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Digital experience management with Optimizely

The digital world is revolutionizing the business landscape at an incredible pace. While the technology used to follow behind business practices, today, many businesses have found themselves sprinting to keep up with technology’s pace.

Optimizely can help.

Optimizely is a CMS platform that specializes in digital experiences. That includes e-commerce, marketing and SEO optimization, and how your company collects, stores, analyzes and shares data.

Strategic Data Management is too important to leave up to fate. Trust the professionals at Optimizely to help guide your digital experience journey and make the most of your assets.

To learn how Optimizely can help, request a meeting and customized demo today.


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45 Free Content Writing Tools to Love [for Writing, Editing & Content Creation]

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45 Free Content Writing Tools to Love [for Writing, Editing & Content Creation]

Creating content isn’t always a walk in the park. (In fact, it can sometimes feel more like trying to swim against the current.)

While other parts of business and marketing are becoming increasingly automated, content creation is still a very manual job. (more…)

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How data clean rooms might help keep the internet open

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How data clean rooms might help keep the internet open

Are data clean rooms the solution to what IAB CEO David Cohen has called the “slow-motion train wreck” of addressability? Voices at the IAB will tell you that they have a big role to play.

“The issue with addressability is that once cookies go away, and with the loss of identifiers, about 80% of the addressable market will become unknown audiences which is why there is a need for privacy-centric consent and a better consent-value exchange,” said Jeffrey Bustos, VP, measurement, addressability and data at the IAB.

“Everyone’s talking about first-party data, and it is very valuable,” he explained, “but most publishers who don’t have sign-on, they have about 3 to 10% of their readership’s first-party data.” First-party data, from the perspective of advertisers who want to reach relevant and audiences, and publishers who want to offer valuable inventory, just isn’t enough.

Why we care. Two years ago, who was talking about data clean rooms? The surge of interest is recent and significant, according to the IAB. DCRs have the potential, at least, to keep brands in touch with their audiences on the open internet; to maintain viability for publishers’ inventories; and to provide sophisticated measurement capabilities.

How data clean rooms can help. DCRs are a type of privacy-enhancing technology that allows data owners (including brands and publishers) to share customer first-party data in a privacy-compliant way. Clean rooms are secure spaces where first-party data from a number of sources can be resolved to the same customer’s profile while that profile remains anonymized.

In other words, a DCR is a kind of Switzerland — a space where a truce is called on competition while first-party data is enriched without compromising privacy.

“The value of a data clean room is that a publisher is able to collaborate with a brand across both their data sources and the brand is able to understand audience behavior,” said Bestos. For example, a brand selling eye-glasses might know nothing about their customers except basic transactional data — and that they wear glasses. Matching profiles with a publisher’s behavioral data provides enrichment.

“If you’re able to understand behavioral context, you’re able to understand what your customers are reading, what they’re interested in, what their hobbies are,” said Bustos. Armed with those insights, a brand has a better idea of what kind of content they want to advertise against.

The publisher does need to have a certain level of first-party data for the matching to take place, even if it doesn’t have a universal requirement for sign-ins like The New York Times. A publisher may be able to match only a small percentage of the eye-glass vendor’s customers, but if they like reading the sports and arts sections, at least that gives some directional guidance as to what audience the vendor should target.

Dig deeper: Why we care about data clean rooms

What counts as good matching? In its “State of Data 2023” report, which focuses almost exclusively on data clean rooms, concern is expressed that DCR efficacy might be threatened by poor match rates. Average match rates hover around 50% (less for some types of DCR).

Bustos is keen to put this into context. “When you are matching data from a cookie perspective, match rates are usually about 70-ish percent,” he said, so 50% isn’t terrible, although there’s room for improvement.

One obstacle is a persistent lack of interoperability between identity solutions — although it does exist; LiveRamp’s RampID is interoperable, for example, with The Trade Desk’s UID2.

Nevertheless, said Bustos, “it’s incredibly difficult for publishers. They have a bunch of identity pixels firing for all these different things. You don’t know which identity provider to use. Definitely a long road ahead to make sure there’s interoperability.”

Maintaining an open internet. If DCRs can contribute to solving the addressability problem they will also contribute to the challenge of keeping the internet open. Walled gardens like Facebook do have rich troves of first-party and behavioral data; brands can access those audiences, but with very limited visibility into them.

“The reason CTV is a really valuable proposition for advertisers is that you are able to identify the user 1:1 which is really powerful,” Bustos said. “Your standard news or editorial publisher doesn’t have that. I mean, the New York Times has moved to that and it’s been incredibly successful for them.” In order to compete with the walled gardens and streaming services, publishers need to offer some degree of addressability — and without relying on cookies.

But DCRs are a heavy lift. Data maturity is an important qualification for getting the most out of a DCR. The IAB report shows that, of the brands evaluating or using DCRs, over 70% have other data-related technologies like CDPs and DMPs.

“If you want a data clean room,” Bustos explained, “there are a lot of other technological solutions you have to have in place before. You need to make sure you have strong data assets.” He also recommends starting out by asking what you want to achieve, not what technology would be nice to have. “The first question is, what do you want to accomplish? You may not need a DCR. ‘I want to do this,’ then see what tools would get you to that.”

Understand also that implementation is going to require talent. “It is a demanding project in terms of the set-up,” said Bustos, “and there’s been significant growth in consulting companies and agencies helping set up these data clean rooms. You do need a lot of people, so it’s more efficient to hire outside help for the set up, and then just have a maintenance crew in-house.”

Underuse of measurement capabilities. One key finding in the IAB’s research is that DCR users are exploiting the audience matching capabilities much more than realizing the potential for measurement and attribution. “You need very strong data scientists and engineers to build advanced models,” Bustos said.

“A lot of brands that look into this say, ‘I want to be able to do a predictive analysis of my high lifetime value customers that are going to buy in the next 90 days.’ Or ‘I want to be able to measure which channels are driving the most incremental lift.’ It’s very complex analyses they want to do; but they don’t really have a reason as to why. What is the point? Understand your outcome and develop a sequential data strategy.”

Trying to understand incremental lift from your marketing can take a long time, he warned. “But you can easily do a reach and frequency and overlap analysis.” That will identify wasted investment in channels and as a by-product suggest where incremental lift is occurring. “There’s a need for companies to know what they want, identify what the outcome is, and then there are steps that are going to get you there. That’s also going to help to prove out ROI.”

Dig deeper: Failure to get the most out of data clean rooms is costing marketers money


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Ascend | DigitalMarketer

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Ascend | DigitalMarketer

At this stage, your goal is to generate repeat buys and real profits. While your entry-point offer was designed for conversions, your ascension offers should be geared for profits—because if you’re serving your customers well, they’ll want to buy again and again.

Ascension offers may be simple upsells made after that initial purchase… bigger, better solutions… or “done for you” add-ons.

So now we must ask ourselves, what is our core flagship offer and how do we continue to deliver value after the first sale is made? What is the thing that we are selling? 

How we continue to deliver value after the first sale is really important, because having upsells and cross sales gives you the ability to sell to customers you already have. It will give you higher Average Customer values, which is going to give you higher margins. Which means you can spend more to acquire new customers. 

Why does this matter? It matters because of this universal law of marketing and customer acquisition, he or she who is able and willing to spend the most to acquire a customer wins.

Very often the business with the best product messaging very often is the business that can throw the most into customer acquisition. Now there are two ways to do that.

The first way is to just raise a lot of money. The problem is if you have a lot of money, that doesn’t last forever. At some point you need economics. 

The second way, and the most timeless and predictable approach, is to simply have the highest value customers of anyone in your market. If your customers are worth more to you than they are to your competitors, you can spend more to acquire them at the same margin. 

If a customer is worth twice as much to you than it is to your competitor, you can spend twice as much trying to acquire them to make the same margin. You can invest in your customer acquisition, because your customers are investing in your business. You can invest in your customer experiences, and when we invest more into the customer we build brands that have greater value. Meaning, people are more likely to choose you over someone else, which can actually lower acquisition costs. 

Happy customers refer others to us, which is called zero dollar customer acquisition, and generally just ensures you’re making a bigger impact. You can invest more in the customer experience and customer acquisition process if you don’t have high margins. 

If you deliver a preview experience, you can utilize revenue maximizers like up sells, cross sales, and bundles. These are things that would follow up the initial sale or are combined with the initial sale to increase the Average Customer Value.

The best example of an immediate upsell is the classic McDonalds, “would you like fries with that?” You got just a burger, do you also want fries with that? 

What distinguishes an upsell from other types of follow up offers is the upsell promise, the same end result for a bigger and better end result. 

What’s your desired result when you go to McDonalds? It’s not to eat healthy food, and it’s not even to eat a small amount of food. When you go to McDonalds your job is to have a tasty, greasy, predictable inexpensive meal. No one is going there because it’s healthy, you’re going there because you want to eat good. 

It’s predictable. It’s not going to break the bank for a hamburger, neither will adding fries or a Coke. It’s the same experience, but it’s BIGGER and BETTER. 

Amazon does this all of the time with their “Customers Who Bought This Also Bought …” But this one is algorithmic. The point of a cross sell is that it is relevant to the consumer, but it doesn’t necessarily have to be aligned with the original purchase. What you don’t want to do is start someone down one path and confuse them.

You can make this process easy with Bundles and Kits. With a bundle or a kit you’re essentially saying to someone, “you can buy just one piece, or you can get this bundle that does all of these other things for a little bit more. And it’s a higher value.”

The idea behind bundles and kits is that we are adding to the primary offer, not offering them something different. We’re simply promising to get them this desired result in higher definition. 

The Elements of High-Converting Revenue Maximizers (like our bundles and kits) are:

  1. Speed

If you’re an e-Commerce business, selling a physical product, this can look like: offering free shipping for orders $X or more. We’re looking to get your customers the same desired result, but with less work for them.

  1. Automation

If you’re a furniture business, and you want to add a Revenue Maximizer, this can look like: Right now for an extra $X our highly trained employees will come and put this together for you. 

  1. Access 

People will pay for speed, they’ll pay for less work, but they will also pay for a look behind the curtain. Think about the people who pay for Backstage Passes. Your customers will pay for a VIP experience just so they can kind of see how everything works. 

Remember, the ascension stage doesn’t have to stop. Once you have a customer, you should do your best to make them a customer for life. You should continue serving them. Continue asking them, “what needs are we still not meeting” and seek to meet those needs. 

It is your job as a marketer to seek out to discover these needs, to bring these back to the product team, because that’s what’s going to enable you to fully maximize the average customer value. Which is going to enable you to have a whole lot more to spend to acquire those customers and make your job a whole lot easier. 

Now that you understand the importance of the ascend stage, let’s apply it to our examples.

Hazel & Hem could have free priority shipping over $150, a “Boutique Points” reward program with exclusive “double point” days to encourage spending, and an exclusive “Stylist Package” that includes a full outfit custom selected for the customer. 

Cyrus & Clark can retain current clients by offering an annual strategic plan, “Done for You” Marketing services that execute on the strategic plan, and the top tier would allow customers to be the exclusive company that Cyrus & Clark services in specific geographical territories.



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