If one were to conduct a dipstick poll about CMO challenges, a recurring theme is likely to emerge: the struggle with consumer data. CMOs across industries are consistently grappling with the complexities of data utilisation in their decision-making processes. In fact, if you were to take a quick survey among them, you'd discover that a significant portion of them identify data-related issues as one of their primary challenges.

Rewind life by 5 years. Forrester came out with a report in 2019, about why marketers cannot ignore data quality. The report noted that marketers have suffered from a variety of negative consequences stemming from poor-quality data that collectively put a drain on marketing resources and limit marketing effectiveness.  Not surprisingly, wasted media spend was the most frequently cited repercussion. They estimated that 21 cents of every media dollar spent by their organisation in 2018 was wasted due to poor data quality, which translated to a $1.2 million and $16.5 million average annual loss, for the midsize and enterprise organisations in the study, respectively.

Cut to 2024, not much has changed, except for a few terminologies.

According to a recently released EY-FICCI Media & Entertainment report, 38% marketers still feel that the available consumer data is incomplete with gaps, which makes data-driven decision making difficult. Conversely, another faction (36%) argues that the data available to them is both extensive and profound. However, they face internal organisational barriers that impede their capacity to harness this data effectively for strategic decision-making.

The crux of the matter lies in a fundamental question: why, in an era characterised by technological advancement and data abundance, do CMOs continue to grapple with seamlessly integrating data into their operations? This quandary isn't a newfound obstacle; it's a longstanding challenge that persists despite advancements in analytics tools and methodologies.

“This question has been unresolved for a long time because it is complex and needs comprehensive redressal,” says Karan Kumar, Group Chief Marketing and Growth Officer, ART Fertility Clinic.

Experts note that one key factor contributing to the ongoing struggle is the sheer volume and diversity of data available to CMOs. With the proliferation of digital channels and touchpoints, the amount of consumer data generated has exploded exponentially. From social media interactions to website clicks and purchase histories, CMOs are inundated with a wealth of information about their target audiences.

However, the challenge lies in distilling this vast pool of data into actionable insights that drive meaningful business outcomes.

“The biggest challenges that we see around data are quality, accuracy and fragmentation. This creates ambiguity in decision making, impacts targeting of customers and very importantly doesn’t allow companies to make an optimal use of one of the biggest assets they have - their user data,” Abhishek Gupta, Chief Customer Officer, CleverTap pointed out.

PwC’s Customer Loyalty Executive Survey 2023 highlighted that 61% of executives ranked personalising the customer experience as a high priority –– more than any other loyalty activator. However, in today's hyper-competitive marketing landscape, where personalised experiences are paramount, this inability to harness data effectively can have far-reaching implications for customer engagement and loyalty.

According to Prasun Kumar, Business Head, Magicbricks, the struggle is across the funnel – data collection, data aggregation & data unification. “On the collection side, we have multiple sources of data which are not necessarily in sync with each other. The quality of data is also a major challenge there. The data aggregation & unification are mired with challenges of infrastructure (both first party & third party), technology and resources,” he added.

The Silo Game

The challenges extend beyond mere data collection and aggregation, penetrating deep into the organisational structure itself. Many companies find themselves ensnared in the game of data silos. This game, which plays out across departments and teams, sees valuable data trapped within isolated silos, inaccessible to those who could derive actionable insights from it. These silos then hinder collaboration and communication, stifling innovation and inhibiting the seamless integration of data into decision-making processes.

Organisations that fail to break down these silos risk being left behind in the race for market relevance.

Gupta explains, “If we look at any organisation, each function or department collects and uses the data based on the business goals they are serving. With the implementation of point solutions to manage these use cases, begins the process of not only data being siloed but also of siloed technology.”

Over time, these systems don’t speak to each other and they become difficult to connect and manage, perpetuating the challenge of siloed data. Additionally, with Big Data becoming an important part of an organisation's strategy, businesses today have even more data and this data resides in disparate and legacy systems, making it difficult for them to harness the full potential of this asset.

According to Prasun, the fundamental work to be done here is to have a clearly defined consumer journey & mapping data point requirements & availability against those, which further helps in filling the gaps and avoiding silos. “The gaps can be filled through mapping different sources for gathering of data & each team’s requirement can help in avoiding silo issues. Then there’s the need for a data lake to house all data in one place. Having an effective data architecture helps in riding over data silos,” he added.

“Data analysts need a flair for storytelling to help them piece together different data sets to arrive at clear, actionable insights. They need to translate data into clear recommendations for future marketing strategies that go beyond just the "what" to the "why" and "so what." Marketers need to use data to support a narrative that resonates with the audience and compels them to take action,” says Karan.

He also feels that most decision-makers are busy and don't have the time to analyse data. “They often leave this work to their team members, whose work may not receive the attention it deserves. This attitude leads to half-baked conclusions or ‘anecdotal conjecture’ based on incomplete information. With vast data available, it's easy to get bogged down in details and lose sight of the big picture. Marketers must prioritise the most impactful data points and focus on what matters most for their specific marketing goals,” he advised.

Countering the Data Dilemma

Gupta shared that the willingness to invest in quality data among marketers is generally high, but it's essential that these investments are made strategically and responsibly.

“It's not just about collecting vast amounts of data; it's about acquiring the right data and ensuring its accuracy, relevance, and timeliness. Moreover, with the increasing emphasis on data privacy and regulations such as GDPR and CCPA, marketers must also prioritise ethical data practices, including transparency, consent, and respect for consumer privacy rights,” he adds.

Karan notes that technology and tools can assist in organising and managing large, heterogeneous, and siloed data sets, which are at the core of this problem. “Businesses can invest in a central data repository like a data warehouse or data lake to consolidate customer data from various sources, creating a single source of truth for all customer information.”

Experts feel that Master Data Management (MDM) practices can ensure the accuracy and consistency of customer data across the organisation, eliminating duplicates and inconsistencies in customer records. “Such practices also help establish a clear data governance framework that standardises policies and procedures for data collection, storage, access, and usage. Following this up by implementing a Customer Data Platform (CDP) that integrates data from various sources provides a holistic view of each customer,” says Karan.