{"id":35030,"date":"2023-02-15T15:16:26","date_gmt":"2023-02-15T14:16:26","guid":{"rendered":"https:\/\/multiplica.com\/?post_type=mx_articulos&p=35030"},"modified":"2023-02-28T15:19:36","modified_gmt":"2023-02-28T15:19:36","slug":"becoming-a-data-driven-organization","status":"publish","type":"articles_post","link":"https:\/\/multiplica.com\/en\/articles\/becoming-a-data-driven-organization\/","title":{"rendered":"Becoming a data-driven organization to enhance the Customer Lifetime Value (CLV)"},"content":{"rendered":"

Data is becoming increasingly relevant in designing products and business strategies; a data-driven organization can better connect with its customers and deliver unique experiences.\u00a0<\/span><\/p>\n

However, while the answer lies in the data, the problem arises from the ever-increasing amount of information we collect and the difficulty in identifying which one is more relevant to activate to increase the Customer Lifetime Value (CLV) of our customers.<\/span><\/p>\n

How can data be put into action to improve the experience and strengthen the business? A <\/span>McKinsey study<\/span><\/a> confirms that <\/span>enhancing customer experience has increased revenue by 2-7% and profitability by 1-2%<\/b>.<\/span><\/p>\n

Digital customer acquisition has been on the rise since the pandemic. Most companies have realized the importance of this channel, the vast amount of data available on users, and the impact this information can have on their business.\u00a0\u00a0<\/span><\/p>\n

Nevertheless, to better understand their users, they first need to take ownership of the data \u2013in every sense of the word\u2013 and thus make better decisions that consider their experience and the business.<\/span><\/p>\n

The challenge of data collection<\/span><\/h2>\n

Under new privacy regulations, a company that wants to transform itself into a data-driven organization must ask users for their consent to be tracked by applications, to be removed from databases, and to share their data with third parties. This last condition is the fundamental pillar of online advertising strategies and is currently limiting those companies that monetize their web content with programmatic advertising.<\/span><\/p>\n

The shift from third-party data to first-party data, which favors user privacy, also presents companies with various challenges regarding how to collect data, transform it into information, and improve CLV; among these, how to personalize without the capability of attaining tracking information.<\/span><\/p>\n

However, this is not a challenge that companies with a first-party data strategy will face. By collecting their own data, the customer experience can be personalized without tracking data. When appropriately executed, users appreciate personalization and are willing to share their information in exchange for an enhanced experience. In fact, personalized experiences based on first-party data often surpass the effectiveness of third-party data, thereby improving CLV. As a result, server-side tracking is more accurate and valuable than pixels and their adversaries, such as ad blockers.<\/span><\/p>\n

According to a <\/span>global study by Statista<\/span><\/a>, the exclusive use of first-party data to personalize customer experiences has grown from 31% to 36%. This shift has granted companies access to data they previously lacked, and <\/span>as reported by BCG<\/span><\/a>, ads that use first-party data yield better results. Although the amount of data managed may be smaller, the quality is higher, and the information is in the company’s own hands – a standard all companies should strive for. In short, embracing a first-party data strategy can enhance customer experiences and lead to higher CLV.<\/span><\/p>\n

What challenges are companies facing?<\/span><\/h2>\n

Many companies still face challenges in fully harnessing the power of data, becoming a data-driven organization, and implementing user-centric strategies.<\/span><\/p>\n

This can be due to a variety of reasons, for instance:<\/span><\/p>\n