Customer centricity: Data ownership as central basis
To put the customer back at the center of attention, companies have to invest in their own data.
Current requirements such as outstanding customer experiences, highly personalized customer communication or customer-focused action can be subsumed under one central term: customer centricity. But to make sure this does not remain an empty phrase and that customers really do take center stage, companies must first better understand their customers and analyze their needs. The information required for this can be found in the data that consumers leave behind at numerous touchpoints. Against the backdrop of the General Data Protection Regulation (GDPR), the handling of these data has become even more sensitive. This is why more and more companies are investing in the collection, storage and evaluation of their own customer data.
Own customer data as a competitive advantage
First-party data that arise, for example, when customers register for a newsletter, offer companies key advantages over external data that are collected on external platforms (second party) or purchased (third party). On the one hand, companies retain control of the collection at all times and can thus act in compliance with data protection regulations. If the customer data are then stored and analyzed in their own solutions, there is also no risk of others gaining access to the collected data (data leakage).
42 percent of decision-makers see competitive advantages in customer data that the company has collected itself. This is the conclusion of the “Digital Data Insights” study, in which Stuttgart Media University (HDM) conducted a survey of around 300 company decision-makers from the automotive, IT, food and publishing industries, among others, on behalf of the Berlin data analytics provider Webtrekk. However, this also showed that these competitive advantages are often not being exploited yet. Only 22 percent of those surveyed stated that they were already generating competitive advantages from data analyses.
This also speaks for the generation of first-party data, which are higher quality and not shared with others. “Until now, the motto was to share data with the large digital platforms to reduce costs when purchasing traffic. However, it is very difficult to gain a competitive advantage over the competition in this way because everyone is doing it like this now,” explains Christian Sauer, founder and board member of Webtrekk GmbH.
Obtaining explicit opt-ins is regarded by respondents as one of the most important tasks. This is the only way to ensure that data are handled in compliance with the GDPR. In addition, conscious consent to the storage of personal data is also requested from the customer.
Requirements for the implementation of data initiatives
The study also shows that decision-makers prefer best-of-breed solutions in which the best possible software applications for the various application areas are selected. Compared to full-stack solutions, in which one tool covers all fields, the individual applications can be adapted to what are often very specific requirements more effectively. In addition, the introduction and integration of a large solution is often more difficult in practice and offers lower performance in the individual areas.
One of the special requirements is cross-device analysis. 47 percent of those surveyed see this as having economic potential for their own company. This, too, is a requirement that emanates from consumers, who now expect seamless customer experiences regardless of the device or channel they choose.
Willingness to invest pays off
Companies are most willing to invest in the integration of various data silos within the company and in the development of in-house capacities for customer and consumer analysis. Marketing automation based on the customer insights gained is also viewed as important.
Overall, the profitability of investments in data ownership projects is estimated to be very high. The use of customer intelligence and analytics pays off by improving customer-focused actions. The experts expect this in turn to increase sales to existing and new customers, as the added customer value generated impacts positively on customer loyalty.
The bottom line:
Companies rightly expect the analysis of customer data to offer great opportunities and advantages over less data-driven competitors. The GDPR is seen as a major challenge, but instead it should be seen as a major opportunity. Especially in connection with customer centricity, we have to understand that the customer’s need for a secure handling of their data is given higher priority than the economic interests of companies. Those who successfully build trust here have an advantage over many non-European companies.