The data depreciation challenge and how to combat it

/ 2 February 2024

The problem with customer data is that it has an expiration date. It goes stale as quickly as last season’s trends. 🛍

As customer priorities shift and markets transform, yesterday’s data fast becomes today’s liability, leading to missed opportunities and muddled strategies.

So how are marketers supposed to combat this and maintain fresh customer data?

Zero-party data is your friend: learn how it combats data depreciation with actionable tactics to keep your data fresh, relevant and valuable—from spotting the warning signs of data wear and tear to embracing cutting-edge solutions.

Data depreciation triggers

Data is depreciating. And cookies are disappearing. 🍪

So is data-driven marketing over? In short, not really. What it does mean is that third-party data and cookie tracking will no longer be the be-all and end-all for marketers. Instead, it’s time to get back to what marketing is really all about—understanding and engaging with customers. 

But what if we step back for a moment? What’s causing these issues? And is it as bad as it appears? 

When it comes to retail, there are several reasons for rapid data depreciation, here’s a summary of the top causes:

😁Shifting customer preferences: Retail thrives on trends. But they also come and go quickly as new fads emerge. Catching the trend early relies on fresh data to capitalise on the new opportunities. Without it, it’s near impossible for retailers to personalise campaigns and engagement and marketing ROI drops.

👎Relying on lesser data sources: Zero-party data is the best data, yet most brands still rely on cookies and third-party data. Zero-party data is owned, consented and fresher. It also allows retailers to mine the exact insights they need.

🤖Robotic advancements: The rise of data analysis advancements like machine learning and AI crunch bigger volumes of data much faster to unearth golden insights. Early adopters gain that competitive advantage.

⭕️Data integrity issues: And even once the above factors are tackled, there’s the need to always run hygiene checks. Data depreciation happens over time because of human error, system glitches and poor migration.

Ultimately, these triggers erode data quality and usefulness. And this has a rippled effect—not just on marketing. 👇

The ripple effect of data depreciation

The problem is data depreciation ripples across multiple parts of operations — hitting marketing, sales, customer loyalty and more. So, let’s focus in on how it derails retail strategies:

  • Bad business intelligence: Strategies rely on data accuracy and freshness for the right insight. Without this, retailers target the wrong segments.
  • Operational inefficiency: The above can also majorly impact stock decisions and over or under-ordering to meet demand. 
  • Dull marketing: Old data produces tone-deaf campaigns—they just don’t resonate with customers’ current needs.
  • Awkward pitches: In B2B, sales need to know active pain points to shape offerings. Otherwise, they miss the mark and miss the sales.
  • Disengaged customers: Lack of personalisation of offers, discounts, recommended products, helpful content and more turns off customers and reduces customer loyalty.

Now, we’ve covered the triggers and effects. So, what can retailers do to prevent data depreciation?

Early warning signs of data depreciation

Catching data decay early relies on stopping it at the source and taking proactive measures to monitor it. Let’s go into this a little deeper. 👇

Data depreciation red flags

Here are some early red flags that indicate your data may be expiring:

🚩Declining campaign KPIs: If engagement rates and ROI is dropping constantly, it could be your data. Even with the most powerful, resonate campaigns, if your data is outdated or slipping in quality, it will skew the overall performance.

🚩Irregular revenue patterns: Unexplained shifts in sales could be down to stale data not reflecting the latest customer preferences.

🚩Bad customer reviews: If you capture this data source, it can unveil a disconnect between customer and retailer. Are they complaining about irrelevance? If so, it’s likely the data. 

🚩Stagnant customer profiles: If targeting high-value ICPs and buyer personas is crucial to your strategy, you may want to revisit these often by tapping into your data or they may not reflect your ideal customer base. 

Regularly auditing data for accuracy, relevance and completeness stops it from silently sabotaging success.

Data depreciation tips

Here are a few tips to help assess whether data is expiring:

💡Data health examsScheduling regular reviews of data for age, completeness, trustworthiness and overall quality (e.g. removing duplicates, correcting spelling etc). It’s important for GDPR anyway so could slot into these review processes.
💡Don’t rely on outsourced dataCapturing your own data, straight from the customer builds trust, a value exchange (they know they are sharing data and why—more personal experiences), and it is fresher.
💡Tap into employee insightFront-line employees like sales teams have an ear to the ground and will pick up trends before they shape data.

That’s just a few ideas to illustrate how red flags can be resolved. Let’s now go into more detailed data strategies.👇

4 ways to tackle data depreciation

You might be asking: “Do I really need to go through steps to tackle data depreciation?”

The short answer is: if you care about your results, your work, and your company, yes. We’re assuming you already have a data management system in place to store, manage and retrieve data. So, here are some additional best practices that you can use:

🔶1. Review your current data strategy

The first step is to consider the variety of data your organisation gathers. Are you fully using the data at your disposal? Is it giving you all the insights you need? Do you capture data as customer relationships develop? (A.K.A. progressive data capture – more on this later).

Reflect on how this data is stored – is it neatly centralised, or is it fragmented across various silos, potentially leading to gaps? 

Additionally, think about the integrations between your marketing technology stack and external solution providers. These considerations are crucial for understanding the state of your organisation’s data management.

🔶2. Collect new data sources

After your review, you’ll probably find you have a strong need for new fresh data sources. This is where first and zero-party data comes in.  First-party and zero-party data are crucial elements in navigating the challenges of data depreciation. 

Here’s why this step matters: gathering these data types ensures brands have access to consented, actionable information. This is data that consumers willingly share, seeking an enhanced experience with the brand. 

They’re moving away from generic, irrelevant content, preferring tailored, personalised interactions with their favoured brands. To enhance communication retention, exploring the advantages of a virtual call centre is worthwhile.

Whilst progressive data capture is essential to building relevant communications, it’s important not to ask everything at once. Too many questions are a surefire way to get poor response rates or duff answers. Our view? Ask little and often. And make sure the questions are relevant to the person. We call this ‘progressive data capture’. Psst. 🤫 We can help with this. Find out more here.

🔶3. Assess data compliance

In a privacy-first world, you need to make sure you have consent from your audience for data collection and usage. Are they aware of your data storage and utilisation methods? 

Bear in mind the approaching irrelevance of third-party data. It’s vital to adapt your strategy to a privacy-centric approach, anticipating this significant shift.

🔶4. Experiment with new ways to collect data

Consider adopting strategies like interactive marketing, gamification, and engagement-driven loyalty programmes. These methods are excellent for gaining deeper insights into your audience and help you grasp their needs and expectations. 

And this knowledge enables you to create personalised experiences, reward their engagement with your brand, and deliver content that resonates with their interests.

Plus, These strategies can offer retailers new insights, help fill gaps in existing data and make sure it’s the most valuable asset to growth.

Data depreciation in action: Michael’s re-engages 80,000 customers 💞

Arts and crafts retailer Michael’s provides a great example of re-engagement.

During the holiday season, Michael’s found that 4.8 million customer email addresses were at risk of becoming inactive. To counter this, they leveraged gamification solutions from 3radical that employed a survey and holiday “advent calendar” theme.

This campaign allowed Michael’s to reactivate over 80,000 customer emails.

But, not only this, they used progressive data capture to learn about customers’ habits, hobbies, and communication preferences. This valuable zero-party data could then be used all year round. 

Combat data depreciation with zero-party data

There are no two ways around it. Brands must address data depreciation, as reliance on consumer data not obtained through compliant and transparent methods is no longer viable. Maintaining and nurturing relationships with your audience will require the collection of actionable, consented data.

First- and zero-party data are ideal for this purpose, with interactive marketing being one of the most effective collection methods.

We’ve covered quite a lot of tips and tricks in this blog so let’s briefly recap the main takeaways.

✅️ Data depreciation hits multiple business areas so all stakeholders are integral to protecting and maintaining it.

✅️ Catch data depreciation early by looking for early warning signs like sales pattern shifts and consistent engagement dips.

✅️ Embrace innovations like new data sources and gamification.

✅️ Run regular data health checks.

✅️ Keep an eye out for real retail success stories to learn from them.

And remember that data is a key driver for success so essential for competitive advantage. To keep it valuable, keep it fresh and relevant. 🍋

The strategies outlined in this blog can guide you towards making your data a continually renewed resource, fuelling your business’s growth and adaptability in the dynamic retail landscape.

Did you know? 3radical is a leading platform for first- and zero-party data collection. Our platform supports marketing teams in understanding their audiences through gamified engagement and data capture via quizzes, games, polls, contests, and over 30 other interactive formats.

If you are ready to get started, you can talk to sales today. Or, you can level up your knowledge with the guides below 📕

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