In reading the tea leaves of a Gartner survey on business strategy, it seems likely that in 2024 organizations will prioritize igniting their customer data in pursuit of revenue, but doing so cost-effectively, finding ways to innovate while maximizing their existing investments.
In the 2023 Gartner CMO spend and Strategy Survey, 75 percent of CMOs report facing pressure to cut technology spend and having to “do more with less” as inflationary pressures and fears of a looming recession threaten growth and experimentation. Because of this pressure, a majority of marketers (86 percent) said they must make significant changes to how the marketing function works to achieve sustainable results.
In effect, even with customer expectations for privacy and personalized, omnichannel experiences, becoming more pronounced, marketers must be judicious in how they use and activate customer data. This spotlight on marketing spend along with a need to ignite customer data will bring four trends to the forefront in 2024, all related to the need for marketers to do more with less.
1. Companies will continue to embrace the data cloud
In an era of constrained IT resources, data clouds simplify access to data, making it more efficient to deliver a single source of truth for customer data. Combined with customer data platform (CDP) technology, this eliminates the siloed data that traditionally prevent companies from becoming customer-centric because they lack a single view of the customer across channels. Data clouds help prioritize the efficient collection and use of first-party data, an important capability for meeting consumer expectations for a real-time, personalized customer experience. With a CDP sitting directly on top of a data cloud, it is easier and less expensive to build a unique customer profile and then to activate that profile across multiple systems.
Data clouds align with the need to prioritize the efficient collection and use of first-party data, an important consideration particularly with marketing budgets strained, with the disappearance of third-party cookies and with customers only willing to share personal information if it is used to enhance CX.
In a 2023 survey from Invesp, 87% of marketers said that data is their organization’s most under-utilized asset, while 54% said that the lack of data quality and completeness is their biggest challenge to data-driven marketing. Moving to a data cloud and coupling it with a CDP’s automated data quality and identity resolution addresses these issues head-on, and that trend will continue – particularly for customer-facing brands who see a data cloud with an enterprise-grade CDP as a relatively fast, inexpensive way to monetize their customer data.
2. AI will continue to gain momentum, with companies taking a methodical approach
Generative AI is another trend that will dominate data management in the coming year. Generative AI and large language models (LLMs) took the world by storm in 2023, contributing greatly to a wider enterprise recognition that artificial intelligence (AI), in its various forms, is a vast untapped resource for driving business innovation and efficiency. ChatGPT and other natural language processing tools have made it abundantly clear that AI has enormous potential to help marketers and other business users of data do their jobs more effectively – even more than it already has.
Whether through the delivery of more personalized insights and predicted actions, or through the alignment of marketing programs and customer experience (CX) – e.g. copilot driven segments, campaigns, journeys and next-best actions – there is tremendous opportunity to use AI to improve results and outcomes.
To avoid being swept up in the considerable hype and jumping full bore into the first opportunity, however, enterprises should ensure that AI is used in a pragmatic way that is both profitable and can adapt to new data and technology innovations over time. By experimenting with AI use cases, organizations will discover the importance of having an accurate and up-to-date unified customer profile as the foundation for delivering a personalized CX, which ties back to the continued emergence of data clouds as a means for establishing a single source of truth for data.
Organizations should also remember that customers are still somewhat leery about the widespread use of AI as it relates to creating a personalized CX. In a 2023 Dynata survey that explored customer sentiment around AI, 58 percent of respondents said that it is important that a company is transparent about when AI is being used. And while nearly half (48 percent) said they would interact with AI more frequently if it made their experience with a brand more seamless, consistent and convenient, a majority (77 percent) said that AI still needs an element of the human touch.
3. Efficient, effective utilization of the marketing tech stack will be a top priority
Continuing with the overall “more with less” theme, organizations will face pressure to optimize the marketing tech stack. Constrained marketing budgets plays a major role, forcing companies to eliminate waste and overlap. But there is also a need to protect the veracity of customer data, ensuring adherence to various rules and regulations for how customer data is collected and used on behalf of the customer.
Gartner’s 2023 Marketing Technology Survey reveals that marketing tech utilization has plummeted to 33%. One factor driving low utilization is the lack of an accurate unified customer profile that is easily accessible across the stack. In the coming year, more companies will make an honest assessment of their existing marketing tech stack to curb problems that stem from having data siloes across the enterprise.
Greater recognition that a pristine, unified customer profile is a direct link to profit will generate scrutiny on whether a company’s existing marketing tech stack is set up to best achieve that pristine, unified view. Marketers will be tasked with optimizing the customer data that for the most part already exists across the enterprise, albeit siloed, but doing so cost-effectively with agility so enterprises can pivot as needed to quickly capitalize on emerging trends.
4. Companies that get their data right will solve the “Personalization Paradox”
The personalization paradox refers to the seeming contradiction in consumers increasingly expecting a more personalized CX, while at the same time they are more protective of their personal data. In a Harris Poll survey, for example, 66 percent of consumers said that they are willing to provide brands more information about themselves, but only if it is used to create a more valuable customer experience.
We explored the customer data value exchange in detail in last year’s predictions from the point of view of the consumer, i.e., why consumers became so intent on protecting their data as an asset. From the perspective of the enterprise, the shift toward consumers being more protective of their data cast the spotlight on what the enterprise is doing to satisfy consumer expectations for data privacy and transparency.
The adoption of preference centers and opt-ins as default data protections are among the steps companies are taking to be more transparent, but an increased focus on data privacy is also a big reason for the shift to data clouds. Yes, data clouds prioritize the efficient collection and use of first-party data, but an enterprise-grade CDP on top of a data cloud also means being able to complete all CDP functionality – automated data quality and ingestion, tunable identity resolution, transformations, the building of a unified customer profile, segmentation and activation – without any data replication and without persisting any data outside of the data cloud. With complete CDP functionality in a data cloud, organizations can execute marketing campaigns directly within the data cloud, accomplishing key objectives of delivering a personalized CX while, protecting customer data and maximizing MarTech stack efficiency.
Editor’s Note: John Nash discusses these predictions along with other insights into the changing customer experience landscape in a webinar, that you can watch here.