As insights into consumers’ preferences remain unpredictable, many have promoted the use of data to help them get a hold of what the future has in store.
However, as FMT Media Sdn Bhd managing director Azeem Abu Bakar pointed out, an over-dependence on data could also work against the business.
“We should also look at other areas such as re-examining our supply chain with a view to achieving cost optimisation,” he said at a discussion forum for senior executives organised by marketing technology product company Netcore yesterday.
“That will lead to better and more competitive pricing. In a climate of rising inflation, price wins over brand loyalty,” he said.
The sectors represented at the forum were fast moving consumer goods (FMCG), media and transportation.
The tone at the forum was one of a less-than-rosy outlook. Prices of consumer products are expected to rise by up to 30% even with a slowdown in the global economy.
According to Azeem, the proportion of the population in the B40 (the 40% who earn the lowest income) and the T20 (20% who earn the highest income) has risen.
As a result, the middle income group (M40) has shrunk, thus widening the disparity between the rich and poor.
Netcore said it is now essential to reassess strategies towards pricing and, more importantly, making available data that could help businesses retain customers.
It said a 5% improvement in customer retention could help to raise profits by 25% to 95%.
It also noted that it costs 25 times more to acquire a new customer than to retain an existing one.
However, Azeem said, data obtained could also present a totally unexpected picture.
“This was obvious from our experience from intelligence gathering during the last two general elections,” he told the forum.
Azeem recommended that executives “roll up our sleeves and let ourselves be immersed in understanding the human side of things”.
“Data is just one piece of the puzzle but failure to understand it is fatal,” he said.
An immersion in one’s business, he said, could lead to the emergence of a sixth sense.
“This is when you know your business well enough to gauge whether or not the data is misleading you,” he added.
Domino’s Pizza Malaysia and Singapore group chief marketing officer Linda Hassan said that while data could help a business take a product-led approach to marketing, equally important is the customer-led approach.
“One alone does not give you the real picture,” she said, pointing out that “it is just analytics”.
She explained that taking the customer-led approach would offer insights into what a consumer wants, which can help in creating a product good enough to keep customers coming back for more.
However, e-mobility operator Beam product lead Varun Atul Vashishtha warned that data should not be the sole factor that influences decisions.
“It is just a baseline and a guide,” he stressed.
“We should also base our decisions on various other aspects of our product and business. That is where knowledge and skillsets matter,” he added.
Malaysia Airlines global marketing head Waikuan Wong said data should be used to understand a consumer’s behaviour.
“Data should not be the main factor that leads us to a final decision. We must know our customers first,” she added.