Data driven marketing - a shift in focus [Banker Middle East]
(Banker Middle East Via Acquire Media NewsEdge) What are the findings of the Data Driven Marketing Survey 2013 and what do they mean for enterprises, particularly banks and financial institutions in the larger ME region? "The Teradata Applications Data Driven Marketing Survey was aimed at better understanding the many challenges that marketers face today. The research was based on interviews with more than 1,100 senior marketing professionals from over 19 countries across Europe that also helped understand what these challenges mean for various industries and businesses today and how they each invest in technology to counter these challenges and drive business benefits. "The survey found that the banking and insurance industries continue to invest substantially in sales and marketing technologies driven by ever- increasing competition, superior customer satisfaction ratings and innovation.
"The main findings reveal that banking and insurance executives are currently challenged by (1) delivering customers consistent customer experience across multiple channels, (2) generating value from a wider range of data ("Big Data") and (3) measuring the effectiveness of their marketing efforts. More than half (55.7 per cent) of the survey respondents deliver customer-centric campaigns with the goal to increase revenue. More than half of survey respondents use seven or more sales channels simultaneously for campaigns.
"Investment in digital channels is rapidly growing in the Middle East. Banks and insurance companies reluctant to adopt new digital channels cite budget constraints or corporate guidelines as the main reason.
"Banks in the Middle East need to be prepared to integrate new digital channels effectively and to cope with the data coming from those channels in order to leverage the opportunities of the digital era. However, many banks still have a long way to go to also effectively integrate their existing channels from a marketing perspective. These findings point to an opportunity for banks in the Middle East, whereby new capabilities developed for digital (online) channels, should also work with offline channels. Customers see their bank as one organisation, across all channels and therefore banks need to meet this expectation by acting accordingly."
What are the key challenges that Chief Marketing Officers (CMOs) continue to face today?
"The environment is always marked by heightened competition, but there are several pressures that are more acute today: 1) Today's CMO is expected to be more accountable. Banking CMOs today need to show accountability (i.e. financial performance) for all marketing initiatives. The historic reality is that although most CMOs know how much they spend, few have been able to quantify the true values of that spend. Measurement of marketing spend is critical, as is the measurement of the income generated through new sales and deeper customer relationships. 2) Customer expectations are far higher - today, they expect their bank to be responsive to their needs, which means less 'broadcast' marketing and more personalised communications on the customer's agenda. Furthermore, real-time interactions become business- critical. Customers not only expect the right offer but they expect it at the appropriate time. Timing is critical in banking; a customer typically only has a limited window when they want products such as insurance, mortgages and loans. Marketing has to be able to respond quickly. 3) Greater complexity resulting from the proliferation of new channels, new media, and the way customers consume them. CMOs need to find ways to become more efficient in order to integrate new digital channels and execute more campaigns with no additional resources nor spend. In order to respond to the above-mentioned challenges, banking CMOs need to understand customers and their relationship with the bank, identify customer needs as they arise, and the relevant offers to make, as well as deliver and fulfil these offers efficiently and effectively."
What is the role of marketing within a banking organisation? Is it seen as a strategic function that drives business or does it continue to be product focused?
"Marketing departments across banks in the region are witnessing a shift in focus from product-oriented marketing towards customer-oriented marketing. However, to do so, banks need to have the capacity to use customer data effectively in order to attract and retain customers with relevant sales and / or retention campaigns. The capacity to gather, store and use data from various traditional and digital channels to create customer-oriented campaigns is still a key differentiator as many banks have not yet reached the maturity level to leverage the benefits of data-driven marketing.
"The marketing role has gone beyond brand representation to affect various other elements of the business, including customer service, product and service development, and revenue generation. CMOs today need to find new ways to engage customers using a personalised dialogue created by analysing and leveraging the huge amounts of data we have available today and communicating this dialogue, using a host of new digital channels.
"In short, marketing is also responsible to optimise the various sales channels to achieve the right balance of profitability, customer retention and greater yields."
How adept have banks in the Middle East been in their marketing investments? Is digital marketing today solely the responsibility of the CIO or is it driven by other business stakeholders?
"To say that banks in the Middle East are lagging in their marketing strategies would be unfair. Data Driven Marketing, in general, represents a steep learning curve for the industry at large, where banks need to invest in the right solutions in order to create and measure the effectiveness of campaigns. According to the Teradata Data-Driven Marketing study 2013, a key challenge in this regard as cited by the majority of marketers is insufficient access to customer data or adept insights into customer behaviour in order to proactively influence sales channels, product development and customer service.
"In a data-driven organisation, traditional and digital channels are managed by marketing for maximum alignment and consistent customer experience across all customer touch points; however, this is not the reality in many banks today. Customer- oriented strategy in the leading banks tends to be reflected throughout the entire organisation from an email campaign to the branch, the ATM, the call centre and so on.
"The key to success is the collaboration between marketing, heads of customer- facing teams, product management and IT to ensure that data required for the support of customer insights, campaigns and contribution are sourced into the data warehouse and vice versa - data should be easily accessible for marketing to create relevant customer segmentations.
"The need for IT, business and marketing to align on their goals and objectives is essential to the success of a data-driven approach. A prominent Teradata banking customer successfully implemented a data driven marketing approach by assigning the task of managing the data warehouse to a CRM Manager so as to ensure that the information being collated and analysed was of value to the different business units that were expected to benefit most from the implementation. This resulted from a clear communication between the CIO and various department heads to define the scope of the project outline the objectives and the reach across various business departments including sales, product development and customer service. As a result of this well-thought-out approach, this bank has been able to build effective sales campaigns to boost customer retention and referential business driven by vastly improved customer insights and automated CRM processes to enhance the overall customer experience."
What have banks traditionally done wrong in their approach to marketing? How does Teradata help change the approach?
"In the past, banks had a product- centric marketing push strategy, offering products to the mass market. With this approach, over time, banking institutions have decreased customer satisfaction through over solicitation and appearing to not understand what their customers want. This has resulted in lost up-sell and cross-sell opportunities as customers take it upon themselves to seek out what they need and increasingly this need is fulfilled by another bank.
"With a data-driven strategy, banks can drive a real customer-oriented strategy. Banking data provides detailed insight into the customer and their needs, so data-driven marketing is the practice of acquiring and connecting large amounts of data, rapidly analysing it to understand what customers need, then acting on that understanding via sales and marketing, tailored to customer need.
"Teradata Applications, indeed Teradata as a whole, is particularly well-suited to become the "trusted advisor" for companies seeking to outpace their competitors with data-driven marketing solutions."
How do you think this approach to marketing is likely to change in the future? Will this create new challenges or opportunities for banks, how so?
"We live in a digital world, where connectivity spoils the consumer for choice and word of mouth spreads faster than fire. While many may look at this as a challenge to come, Teradata sees this as an opportunity in the making.
"It is the organisations that realise the wealth of opportunity hidden behind the surging amounts of data consumers create everyday through their day to day interaction with businesses, online purchase and digital communication that will succeed in the long run. The key is to collect, collate and analyse the different aspects of this data that may help drive your business forward, give them more choices and respond to their requests and complaints a whole lot faster than we are capable of doing today. The future is all about 'rapid response' and 'real-time' decision making.
"The good news is that most prominent banks in the region have already come to realise this and are paving new ground in how they approach not just their marketing strategies but also their technology investments to encompass wider roles than they traditionally did. At Teradata, we believe that the future is already in the making and this is why the Middle East continues to be a market of strategic importance to our business worldwide as we help banks in the region develop the right strategies and invest in the right technologies to meet their needs and keep their customers."
Customers not only expect the right offer but they expect it at the appropriate time
Nicholas Ayton has been working within the region for many years, primarily in the retail banking, insurance and telecommunications market sectors. Nicholas has over 20 years' experience in the fields of IMM, CRM and business intelligence having worked for some of the world's leading software vendors.
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