Here’s a sobering reality — you’re probably spending more money each year to attract the same customers. Last year, marketing budgets rose 12% 1, yet the U.S. population only rose 0.7%2. So where are all those extra billions going?
To answer that question, we need to look at how marketing budgets are being spent. About 44% of companies focus more on customer acquisition, while only 18% place more emphasis on customer retention. But the probability of selling to a new customer is only 5-20%3. So why make such an expensive, risky bet on trying to reel in new customers? Because the channels that are the hardest to link to a customer’s identity — display, search, mobile, social — are also the easiest to measure, track, and target. Without true understanding of who a customer is at the identity level, each digital engagement needs to be treated as the first point of contact, which forces marketers to increase their reach, scale, and budget. And with constant changes to consumer data, the traditional channels of email, direct mail, and call centers become harder to maintain and less accurate. Without consistent updates to customer data, marketers are forced to make risky, low-yield investments.
There are two reasons why your data is not as good as it could be. First, 37% of people change their name, address or telephone number in a given year, making existing customer records that aren’t consistently updated unreliable, stale and obsolete4. Secondly, the inability to tie offline and online identifiers restricts your omnichannel view, walling off valuable customer intelligence within multiple and often disconnected systems.
Without a 360-degree view of your customers and prospects, identifying who they are at the human level, you’re wasting money and resources. Targeting the wrong person with the wrong message on the wrong media channel is inefficient and inaccurately measures successful customer connections because they’re only as deep as a puddle.
But don’t despair, there are ways to correctly and accurately managing your customer data. Here are 5 questions to ask yourself and advice on how to avoid the pitfalls.
1. Gartner: Gartner CMO Spend Survey 2016-2017 Shows Marketing Budgets Continue to Climb, December 12, 2016
2. U.S. Census Bureau, 2016
3. Invesp: Customer Acquisition Vs. Retention Costs – Statistics And Trends
4. Neustar: Mastering Remarketing in an Omnichannel World, 2015
5. Deloitte Consulting LLP