Lies, Misconceptions, and the Truth About Marketing Data and Customer Analytics

June 2, 2022
June 28, 2022

Introduction

  • You’re driving in your car, and you tell a passenger, “I want to get an air fryer.” Later you’re browsing on Amazon, and suddenly see recommendations for different kinds of air fryers.
  • You browse through the selection of bedsheets on Costco’s website. Then every time you get on the web for the next few days, you’re chased by ads for sheets.

Spooky! Or is it? Are these instances mere coincidence or are companies really that smart?

To many people, technology and data have gotten so advanced that the data collected about us has become a scary, mysterious thing. It seems like large organizations are spying on us, listening in, taking our data, sharing it, and manipulating us.

In this article, we’re going to explore why such things happen. We’ll

  • Explain the misinformation and reality around marketing and customer analytics.
  • Talk about what works and doesn’t work in marketing.
  • Reveal whether big data knows you better than you do.
  • Help you understand how to work with data in a way that makes a real impact.

We’ll touch on other areas too, like how data can be deceiving. We’ll even prove that your customers want you to have their data, and we’ll give you advice that’s different from what you’re probably hearing out there.

What Is Marketing and Customer Analytics?

First, let’s align on what we mean when we use the words “marketing and customer analytics.” This is the analysis of data to gain insights about your customer. These insights can impact how you market, who you market to, what products/services people want, when, why, and how effective you can be.

Like most organizations, you probably have a record of sales, customers, products, quantities, amounts. That’s where your marketing efforts should start – with the data in your own database, whether it’s a point-of-sale system, ERP, or customer relationship management (CRM) software.

You can also collect data from outside sources like Dunn & Bradstreet or find data about individuals on sites that share public data. You want to bring all of that together, and that’s a solid foundation to work with.

Misinformation vs. Reality

Marketing and customer analytics should lead your team to make better marketing decisions. But there’s a lot of hype around marketing, and this is where you need to be wary.

Everyone talks about how digital transformation has changed marketing. But as marketers, we’ve observed that the more things change, the more they stay the same. The actual structure and foundation of what makes marketing work hasn’t changed.

What has changed is that technology and the internet have given us the opportunity to have unparalleled transparency into what customers are doing, what they want, and how they interact with us.

All of that should ultimately lead us to make better marketing decisions, as we said before. But that’s not how marketing has been used.

Lies and Fraud and Fiction, Oh My!

The problem is that marketers today are still struggling to use data to get results. They’re under scrutiny by the business. They’re in a frenzy to find something that works.

As a result, misinformation is rampant. Many marketing services make false promises to capitalize on this confusion. Some internet sites claim they can track users, tell you what your customers are browsing for, and what they’re doing.

With so many vendors peddling fraudulent services, it’s no wonder lots of business people believe that customer analytics and marketing data are things you need to buy to solve modern-day marketing challenges.

Not so. In fact, if you go down that road, you’ll probably spend a lot of money and find that, two years later, you’re no closer to getting results. We know this because we help a lot of companies who’ve taken this journey.

What Is the Answer?

The truth is that the data you already have and the data you collect directly from your customers will be a lot more effective at helping you do what marketing should do – listen to your customers, find out what they want, and market effectively to the audience and customers you have.

What Works and What Doesn’t in Marketing?

A Tale of Two Companies

Two news stories illustrate beautifully what does and doesn’t work in marketing.

Do you remember the Cambridge Analytica scandal surrounding the Trump-Clinton election? Cambridge Analytica pretended to be a research firm and asked Facebook for data.

Facebook doesn’t sell its data, but it does share it with partners for research purposes only. So Cambridge Analytica licensed the data for about 30 million people. Accounts differ regarding the numbers, as Facebook said Cambridge got the private data of about 87 million people.

Regardless, Cambridge Analytica then attempted to sway voters by super-targeting profiles using “psychographic targeting.” This means they would use psychological data to analyze the psychology of Facebook users.

They wanted to understand their emotions and values and determine who is more likely on a psychological basis to respond to messaging in favor of Donald Trump. Then they would use that targeting to send the right messages to people.

The press said Cambridge Analytica was trying to use data to get into people’s subconscious and change the way they think, and that’s how they would influence the results of the election.

But in the end, the truth is that the psychographics targeting proved to be useless mumbo jumbo. Cambridge Analytica could not target people based on personality effectively.

What they did do effectively (which was low-tech) was “political targeting.” They targeted people who expressed a certain kind of political interest or who were interested in conspiracy theories or had already visited new sites that were considered right-wing.

They figured it out using common sense, which goes back to the fact that everything in marketing changes, yet everything stays the same.

So, even though the psychographics did not work, they got results from old-fashioned marketing practices. None of which matters to Cambridge Analytica because they were eventually shut down. (And Facebook was fined over $1 billion for not protecting the private data of its users.)

Target Hits the Target

Another big story punctuates the point. A scandalous news story broke in 2012 when Target got in trouble for letting a father know his teenage daughter was pregnant before she even knew she was pregnant.

What Target did felt magical. And it made the news because it was unusual. But if you get into it, there’s a logic behind what happened, and it makes sense.

Here’s the scoop. Anytime a shopper interacts with Target – in-store purchase, online shopping cart, survey response – data is collected in a unique shopper ID.

Target crawls its customer data to look for common purchases that, when grouped together, show a high probability of going through a major life event. If a customer’s data fits the profile of someone purchasing a house or getting married, etc., Target sends them coupons for common products relevant to that life stage.

This teen’s buying history within a range of time included 25 different purchases that, grouped together, pointed to a high probability of her being pregnant. Target mailed coupons to her home for diapers and baby products, and the father deduced she was pregnant.

So while this story paints a picture of marketing data being cool or scary (depending on where you sit), it doesn't mention all the single dads or bogus pregnancy mailers that were sent to people who just randomly got a craving for chocolate or had other reasons for the related products they bought. This has all lead to the misconception that aggregate customer data is inherently magic.

Flock of SQLs Comic by Onebridge (Click to Enlarge Image)

A Dose of Reality

Does Big Data Know You Better Than You Do?

Both stories play on our fears that “big data” can learn more about us than our husbands, wives, or children know. This is not true.

It’s important to understand that there’s nothing magical going on here, as you’ve seen with Target and Cambridge Analytica.

It’s long been a tenant of marketing that we have parallel markets, e.g., people who smoke a lot of marijuana tend to purchase potato chips. So if you want to sell a lot of chips, you might want to advertise on websites that sell weed. And having data about which customers smoke weed would be extremely helpful too.

It’s common sense that markets have intersecting interests – in that way, data can be valuable. But the world of data isn’t more sophisticated than we are . And, for the most part, companies aren’t sharing your data.

How Cookies Seem Magical

Cookies are one of the oldest technologies on the internet, but a lot of people don’t understand how they work.

If you look at the Walmart website and then see a similar ad on Facebook, it’s not because Walmart sent Facebook some information or because Facebook has spies at Walmart.

It’s because Walmart put a little tracking device on your browser called a cookie.

Then without Walmart even knowing it, you go to Facebook, and Facebook recognizes, “Oh, you got a cookie from Walmart, and it says you were looking at certain types of things,” so Facebook serves up ads for you based on what you viewed on Walmart’s site.

Facebook isn’t allowed to download that cookie. So, yes, they’re showing you ads for certain products, but until you click on the ad, Facebook still doesn’t know you are interested. It’s just a guess.

Remember, no matter how technology and the availability of data have progressed, marketing still can’t make people buy things. The best use of marketing data is to find people who want to buy what you have.  

The worst use of marketing data is to use it try to convince people, who otherwise wouldn’t buy what you are selling, to want it through sleight of hand.

That is an option, but we call it lying. And lying only works in the short term, and usually comes with huge long-term consequences.

How Data Can Be Deceiving

Let’s break the illusion of data a little more, so you’re not creeped out.

Website tickers

In the early internet days, your website had a ticker that showed every time someone came to the site. If your ticker showed 10,000 users, that number was deceiving because if one person went back to the site 12 times, it would add 12 to the ticker. The data was exciting to have, but it didn’t reflect the true number of visitors.

Google Analytics

Then, when Google Analytics first came out, they’d filter and recognize the difference between someone loading the webpage on the browser and a person actually coming to the website for the first time.

But their counters also tallied “crawlers” that log your website for Google or the search engine they are crawling for.

So if you had 10,000 visitors on the original “ticker” site, then installed Google Analytics, the data now changed to say you had only 800 different people come to your website.

“How can that be? I had 10,000 visitors?” No, you actually had 10,000 views, but only 800 people came to your site.

Then, Google Analytics started learning how to filter out bots to tell the difference between a robot and a human. So the traffic that originally showed 10,000 visitors, that then went to 800, now showed 100 people actually coming to the site. The site is the same, but the data reported changed because Google improved how they collect data.

If you wondered why you were getting only 10 orders a month and you (falsely) thought 10,000 people were visiting your site, now it makes sense, and your conversion rates aren’t as bad as you thought. Ten people are buying out of every 100 who visit your site.

Our point is to show the problem with marketing data. It’s hyped up, so don’t believe everything you see. A lot of data you’ll collect might be messy, unreliable, or bad. Any data you get unethically will probably be bad data too. Don’t use it to make decisions.

Don’t Be Deceived

The biggest lie about customer analytics and marketing data is that you’re going to automate and aggregate it and collect a ton of great data about people without their knowledge.

It’s a lie on the business side because organizations hand over a lot of money to get this data, thinking, “Once I get this data, my sales are going to take off.” It doesn’t work.

And it’s a lie on the customer side because people need to realize that companies just don’t know you as well as they think they do. You haven’t been figured out by Facebook or Google.

Case in point, the if you buy a toilet seat on Amazon, they’ll start suggesting 10 other types of toilet seats. “Customers who bought this also bought . . . .” Thanks, Amazon, but the one toilet seat is plenty for now.

Proof Your Customers Want You to Have Their Data

Here’s some good news. Customers want to give you data. We’ll prove it.

The last time you called customer support about a product you bought, did it go like this?

  • They ask you to type in your order number. You do.  
  • A live person comes on and asks for your order number.
  • They say they’ll send you a replacement part, and ask “What’s your address?” (It’s right there with your order, you want to say.)
  • You learn the part is on backorder. They transfer you to another department, where the person asks, “What’s your order number?”

What makes us angry is that each department doesn’t have our information. Each person you spoke to is using a different database, and the data has to be verified in each one because they’re not connected.

The reality is that we want businesses we work with to have our information and to know us. How happy are you are when you walk into a coffee shop and the cashier who knows you asks, “The usual?” It’s the same thing with digital platforms.

Today you can just text Dominos a pizza emoji, and 15 minutes later your favorite pizza shows up at the front door. That’s a game changer in convenience and customer experience. They can’t deliver that pizza unless you gave them your data . . . and you did, willingly.

Next Steps: Our Advice to You

If you’re a business asking what’s the first thing you should do to improve your customer and marketing analytics, the answer is to figure out how to stop having siloed, segmented data throughout your company where every department has to ask for your customer’s information with every interaction.

If all the data you have on your customers is connected, you’ll learn more about your customers immediately.  

The second thing you should do is stop wasting money trying to secretly extract data from your customers and instead ask them for it directly.

Little things like a form on your website that says, “We’re here to listen to you. Click to tell us your opinion” will help you understand your market so much better than data you’d buy from a third party.

There is so much more to this, but those tidbits should give you a good start. Remember, everyone thinks all the data they collect will allow companies to talk TO customers better, but really you need to use it to LISTEN to customers.

None of this is rocket science, but it takes a lot of intentionality and integrity to focus on what’s really going on.

Onebridge understands how to use your data to give you customers what they want. We help customers solve such problems on a daily basis, and our teams have the wisdom of experience. Contact us if you want to start a conversation about your own data challenges.

More Resources

If you're not ready for a conversation, but want to learn more, download our whitepaper, How to Turn Customer Data into a Secret Weapon for Sales and Marketing Success without providing your contact information.

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