Brands put Customer Relationships at Risk, Merkle Research Reveals How Customer Data Strategies Play a Crucial Role

Merkle’s Customer Engagement Report explores critical gaps in how brands manage customer data, the impact on business growth, and key steps to getting back on track

Merkle, dentsu’s leading technology-enabled, data-driven customer experience management (CXM) company, released its Q3 2022 Customer Engagement Report (CER) highlighting priority areas for CX, data, and technology leaders. The report explores what’s behind the ongoing disconnect between the high marks brands give to the quality of the customer experiences they create versus the comparatively low grades awarded by consumers.

Merkle surveyed more than 600 marketing and technology decision makers of major companies ($100 million +) from the US and UK. Key gaps were found between their self-assessment and their actual approach to customer data – gaps that correlate with the disconnect in their customers’ assessments of their own experiences with these brands.

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For instance, while most leaders (85%) give themselves high marks for customer experience (CX) maturity, only a small group actually meets best-practice benchmarks. Just 32% of respondents utilize data across the entire enterprise; less than 25% have migrated all customer data to the cloud; and only 24% manage all their campaign data in a central repository. The results highlight the rough patch brands and consumers are experiencing and the critical pitfalls many companies need to address before they get dumped.

“Customers’ changing expectations and the need for data integration have long been documented, but even as brands attempt to deliver personalized experiences, there still remains a breakdown between what is ultimately delivered and what customers are actually seeking in these relationships,” said Courtney Trudeau, vice president of technology strategy at Merkle. “We’ve identified the tough conversations brands need to have to ensure they aren’t driving consumers away. Even the most brand loyal consumers aren’t safe if this disconnect in both priorities and business practices isn’t addressed.”

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The survey found that the biggest barrier to advancing toward the goal of personalization at scale is a lack of consistent audience segmentation across channels (25%), followed by siloed or unaligned teams (24%). When customer data isn’t uniformly made available for use across the company, each of these groups builds its own siloed data constructs from the ground up. With this kind of data strategy, brands are unable to see a full picture of their customers or the data itself, placing themselves at a severe disadvantage and limiting the speed at which innovation may be applied.

A lack of emphasis on the customer data foundation that underpins the larger success of a martech stack ultimately constrains the ability to utilize its full capabilities and/or its individual components. The CER survey revealed that, while more than 72% of respondents have achieved the ability to deliver data-driven CX across more than one channel, only 15% are able to power full omnichannel personalization, and barely 20% prioritized improvements to customer data. This places brands at a serious disadvantage when customer data must be properly integrated, formatted, governed, and available in real time for a sophisticated CX stack to deliver as promised.

Relying on CRM systems or integrations across channel-based platforms to store customer data restricts the ability to analyze and drive decisions from complex data sets in real time. The survey revealed that only a quarter of respondents have their campaign data in a central data store. Unless brands have strong internal resources who will be able to devote much of their attention to bringing data together into one cloud-based repository and drive the realization of your use cases, this could be a huge gap in the process.

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[To share your insights with us, please write to sghosh@martechseries.com]