Identified as the "sexiest job of the 21st century" by Harvard Business Review, it's no wonder that demand for the data scientist position has skyrocketed. However, according to McKinsey research, by 2018 the United States will experience a shortage of 190,000 skilled data scientists and 1.5 million managers and analysts capable of reaping actionable insights from the big data deluge. With an estimated 40,000 exabytes of data being collected by 2020 -- up from 2700 exabytes in 2012 -- the implications of this shortage become apparent.
So what exactly does the role of the data scientist entail and what value can data-driven marketing bring to organizations? CXOTalk went straight to the source and talked with two of the most extraordinary data scientists of the day: Dr. Michael Wu, the Chief Scientist at Lithium Technologies and Jeremy Stanley the Chief Data Scientist of Sailthru, Inc.
In the past, data was used to provide the marketer with what they wanted, however the practice of these two data scientists signal that the tide has turned. Dr. Wu (Twitter: @mich8elwu) and Stanley (Twitter: @jeremystan) crunch numbers and wrangle data with the common goal of understanding consumer behavior - for the benefit of the customer. But make no mistake, when you consider data as a multiplier that can stretch your brand dollars by 50%, there is much for organizations to gain by collecting and storing data, sorting the signals from the noise and using machine learning and algorithms to predict customer behavior. Here's what Dr. Wu and Stanley have to say about using data to understand customers and predict buying behavior to create meaningful marketing and improve the customer experience.
5 steps to using data to create meaningful marketing:
1. Create a data science team - According to these two data-driven marketing experts, the industry is calling for someone who can do it all - but the data scientist is made up of three very different roles: at the foundation there is the infrastructure layer made up of data engineers, the next layer is the algorithm layer and the top layer is the decision science layer made up of the business analysts that can interpret the data to help business decision makers make better decisions. Both Wu and Stanley agree that it is very rare to find one person with all three skill sets. "A more pragmatic approach is to build a data science team of members with particular skills that help your organization analyze and visualize data," said David Steier, director of information management for business consulting firm Deloitte.
In a knowledge sharing economy, it is time for marketers to start thinking like data scientists. The top qualities that companies should seek in a data scientist, according to Dr. Wu, are curiousness and perseverance: "They need to be curious and willing to play with the data and experiment with it and have lots of perseverance. It is much more cost-effective and efficient in the long run to hire three people and have them work together."
2. Social Influence with no carrot, no sticks, no annoyance and no tricks: As one of the world's top experts on social influence, Dr. Wu takes the definition of influence - someone's ability to influence another's thought or behavior - one step further. He says that it matters how you change their thought or behavior. According to Dr. Wu, marketers need to influence behavior under the four conditions of no carrot, no sticks, no annoyance and no tricks. You can't bribe them with something, coerce them with brute force, trick them into it by not giving them the full information or frustrate them into doing something by annoying them. It seems like a challenging problem to exert influence without these conditions, but in real life influence happens all the time as people interact. As we talk, share information and listen we have the ability to influence one other. In social media, where a lot of these interactions are happening digitally, data is stored and companies can look for signals that indicate peoples influence.
3. Strong relationships equals sustained engagement - CMO's are always thinking of how they can better engage with customers. While engagement is not hard, sustained engagement is difficult. In fact, only 20% of B2B customers are fully engaged, according to Gallup's 2013 analysis. But those fully engaged customers deliver a 23% premium over average customers in share of wallet, profitability, revenue, and relationship growth.
Sustainability is a lot of Wu's work, which focuses on strategies that help companies to be successful in the long term. He has analyzed the problem of how to achieve sustained engagement and has found that one of the key ingredients is the strength of the relationship. "If you look at all the people you engage in a sustainable way, it's a pre-requisite that they have some relationship with you.
Relationships are a very strong predictor of sustained engagement," says Dr. Wu.
Stanley says that interpersonal relationships are all built on a two-way exchange and while a small business owner can have this with all consumers, larger enterprises can't possibly sustain this which leads to the breakdown of relationships. Data science comes to the rescue: "Personalization and data science are so powerful because they can give you the ability to have these relationships and listen with millions of consumers due to the data exchange that is going back and forth," says Stanley.
4. Leverage data to improve content quality - Today's hyper-informed buyer is more influenced by content, rather than advertising. According to Stanley, marketers can leverage data to improve the quality of content so can they can influence a buyer. The rise of data advertising is a continuing trend, but in order to optimize content you have to test it, something that is sometimes forgotten. Stanley advice is to test different content simultaneously and then measure the effectiveness. Netflix provides a great example of a company that is using data to improve the Quality of Experience through personalization and content quality.
5. Focus on these 6 factors to improve your social influence - Many books and articles have been written about how to increase your social media skills and influence and how to improve your Klout Score (a start-up that was recently acquired by Lithium). Dr Wu has written a number of blog posts on the topic of social influence. Dr. Wu boils it down to six factors that he determined will improve your social influence with an influence model that he built a few years back. Dr. Wu believes a key point it is that all six factors must be present in order for someone's influence to propagate:
- Credibility: This is built through having community or social presence.
- Bandwidth: It's not enough to simply have a social presence, you need to share and talk.
- Relevance: Sharing information and content that is relevant.
- Timing: It's important to be relevant in the time domain as well.
- Channel alignment: Location relevance is also important.
- Trust: Be trustworthy and be authentic; transparency builds trust.
It comes through loud and clear that understanding the consumer is a driving force underlying the work that both Wu and Stanley are doing. As a CMO, I think that the data scientist is the most important new hire into marketing organizations. Unless you understand your customer and their buying behavior, how can you create meaningful marketing for your business?
According to Dr. Wu and Stanley, the future of data science will bring even more understanding of the customer. From Stanley's perspective, it will bring the promise of an Omni-channel view of the consumer across not only all digital touch points, as we have today, but also of all the physical touch points. Improvements of the algorithms themselves and the measurement of the results will allow better optimization to enable companies to influence people for the better. According to Dr. Wu, there are currently a lot of signals hidden in social media data that are left behind that can tell us something about that person. In the future, we will be able to tap into this data to allow companies to know their customers better so they can understand what is relevant to them - to improve the customer experience and create marketing messages that resonate.
One important takeaway for chief marketing officers (CMOs) is to work very collaboratively with CIOs in order to develop a data driven culture of marketing. Without IT support, digital marketers will fail to realize marketing's full potential.
You can watch the full interview with Michael Wu and Jeremy Stanley here. Please join me and Michael Krigsman every Friday at 3PM EST as we host CXOTalk - connecting with thought leaders and innovative executives who are pushing the boundaries within their companies and their fields.
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