Why businesses are still failing to get value from data?

With the advances in technology and the rise of digital media, consumers generate massive amounts of information about their behaviour, needs and wants that, at first glance, could sound like the perfect solution for marketers.

Indeed, the importance of using data for informed decision-making is evident. As shown in this week’s academic reading “Performance implications of deploying marketing analytics”, most firms will improve their performance if deploying marketing analytics, especially in those industries in which competition is high, and consumer needs and wants are constantly changing. Furthermore, with the birth of digital marketing, businesses can measure almost everything they do. Using digital analytics has become essential to figure out which digital strategies are working and which not and to track progress over time. Also, it provides powerful customer insights to enhance segmentation, build loyalty, improve customer service, among others.

Nevertheless, even though companies are investing in digital analytics, many are still struggling to get meaningful or actionable insights for their business decisions. So if digital data is so important, why are businesses still failing to get value from it?

There are different answers for this question found in the different industry and research articles. The following are my thoughts about it:

  • Lack of expertise. Presence across numerous digital platforms, enable businesses to extract tonnes of raw and unstructured data that needs to be standardised, organised and understood so it can be used in a meaningful way to get insights. Of course, some tools can help with this, but it is also important to have the adequate human resources. It seems that sometimes companies either hire part-time employees to manage their digital media efforts or just simply do not have the right people with the necessary skills to analyse the data.
  • An absence of a well-structured plan that defines what exactly wants to be achieved from every digital marketing initiative and, as the digital marketing evangelist Avinash Kaushik points out, a lack of measurable, well-defined objectives with their corresponding KPI’s and set targets. When there is not a clear purpose for analysing the data, there will not be clarity either of what data would be more important to analyse and how to use that data to create meaningful digital programs.

Finally, data is not the ultimate solution for all marketing problems and decisions should not be entirely based on data insights. For instance, Steve Jobs was known for making critical decisions at Apple based solely on his instinct and understanding of the consumer. Of course, this example is more the exception than the rule but shows that sometimes data might not be enough.

So yes, in this digital era where businesses seem to be drowning in data, it is important to have the appropriate skills and people to draw out meaningful insights, which should always be used along with marketing knowledge, experience and the so-called “marketing gut”.

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5 thoughts on “Why businesses are still failing to get value from data?

  1. Hi Catalina. Interesting take on the use of data.

    I’m not sure I agree with the opening sentence though that historically marketers used to base their decisions only on their instinct. I agree that digital marketing is relatively new and in particular Social Media but measurement and evaluation has been the cornerstone of marketing for decades. Market research, shopping basket surveys, promotional redemption, product sales data, product sampling, advertising viewing etc. etc. are all ways that marketers have collected and used data to inform their decision making.

    What has changed is the amount of information you can now get through the digital channel. Although it is worth noting that this is just one channel available to marketers. Digital analytics can be very useful in aiding the decision making process but one of the dangers is just assuming that behavior in one channel will be replicated in another. So understanding the data and how it can be applied in the business is very important, and I think you picked that point perfectly with your comment “it is important to have the appropriate skills and people to draw out meaningful insights”

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    1. Hi Keith, I really appreciate your comments. I agree, maybe the word “only” is what is causing the misinterpretation. What I meant was that traditionally marketers used to rely more on their experience and instinct for decision-making. Market research only started to be put into practice in the 1920s and the need to better understand consumers and their behaviour on a deeper level rose only until the post-World War II economic boom. Forms of marketing such as database marketing only emerged until the 1980s. That is why I pointed out that with the advances in technology and now digital marketing, data is becoming more and more important in marketing decisions. I completely agree with your comment that understanding the data is very important and I think there is exactly where the gap is. Often, businesses are collecting data but not getting many actionable insights from it.

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  2. Hi Catalina, it was a interesting blog post, I agree with your point that the right people with marketing knowledge, adequate experience, and appropriate skills is needed to analyse the data. I also think that are other factors that may make companies still struggling to get meaningful data. I remembered Khashick articles “Digital Marketing and Measurement Model” he explained in identifying the target step that If companies don’t have targets, then they can identify the target by making something up by using a number that if reached won’t embarrass management team. So I think this may be one of the cause that companies struggle to get meaningful data, as sometimes companies may identify the target by making something up based on their biases. That is, they might identify the target too high (unrealistic expectation) or too low, in order to get results that satisfies them. I also think companies should also pay attention to the interpretation of the data and time that take to generate the report, as it can possibly cause the failure to get value from data.

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  3. Interesting post Catalina 😉 I couldn’t agree more with you with this point “data is not the ultimate solution for all marketing problems and decisions should not be entirely based on data insights”; we live in world spurred by the data analytics revolution, but it doesn’t necessarily mean that everything needs to turn around data.

    Without a question much of the data analytics action within organisations is centred around consumer behaviour, trying to understand the why, how, where and what customers buy, understanding these premises will lead organisations to react and take “prescriptive” actions. But what about the “predictive” actions, does data analytics provides enough information, that for instance, will help organisations to create products and/or services that customers do not know they want or even exist? There is no data about what does not yet exist, so data analytics cannot help us here.

    As you said in your post, a combination of data insights, marketing knowledge, experience and the so-called “marketing gut” is a killer mix.

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