How to Use Your Marketing Analytics Smartly
Marketing organizations are on a quest to
become more data-driven. As a result, they use, on average, about 16
different technology platforms—but only a few organizations reap the full
value of their investment.
What's more, the most
recent CMOSurvey.org study predicts analytics will consume 19% of Marketing's
budget by 2021. About another 22% of the budget will go to technology.
Together, those two investments will account for nearly 50% of Marketing's
budget.
Yet, the CMOSurvey.org
study reports that only about one-third of marketing organizations use
analytics to make program or strategic decisions. And less than 20% of
respondents reported that the use of analytics made a significant contribution
to company performance.
Despite those
increases in investment and advances in technology, "marketers are still
challenged to maximize the potential value of analytics," according to
the most recent CMOSurvey.org study.
Tom Davenport and Jeanne Harris, in their classic book, Competing
on Analytics: The New Science of Winning, provided a road map for
becoming an analytical competitor and using analytics to create value and
growth—the purview of Marketing. Marketers should learn to use analytics to
address at least five growth opportunities:
- Acquisition of more
valuable customers
- Acquisition
of customers who will buy more from you
- Acquisition
of customers who will buy more of your high-value products/services
- Retention
of high-value customers
- Identification
of marketing activities that have the greatest impact on accelerating
customer acquisition and improving retention
Move these four analytics capabilities to the top of your list
For a decade, we've
known what it takes to fuel growth with analytics. Yet four recurring themes
account for the majority of the challenges continuing to thwart the progress of
all organizations, including Marketing, regarding analytics:
- Lack
of quality data
- Lack
of people (that is, the number of people needed to perform the work)
- Lack
of skills (the current talent doesn't have the necessary skills to perform
the work)
- Lack
of predictive tools (despite all the technology that is in play, there is
still a high need for predictive tools)
By
working to improve those four areas, every marketing organization can be smart
with its analytics.
1. Collect quality
data
Data is the basic
ingredient for any analytics. Many organizations continue to be challenged by
the sheer volume and problematic quality of data:
- According
to Domo, "over 2.5 quintillion bytes of data are created every single
day." And, it's estimated that
1.7MB of data will be created every second for every person on earth by
2020.
- According
to the Experian 2018 Data Management Benchmark report, "on average,
respondents in the US believe that
33% of their customer and prospect data is inaccurate in some way—a figure
that has increased from 28% just one year prior." That is not a
technology problem. That is a human problem. Almost half of the quality
issues are related to human error.
Improve
quality-data collection capability with…
- Basic
blocking and tackling
- A
solid data management strategy
- Good
data management processes
2. Incorporate data
from a wide variety of sources
Although
traditional sources of customer data still dominate, companies are increasing
their use of newer data sources, including POS data, transaction data, and
research data. Make sure your organization has a data inventory so you can know
what data you have, where it is, how frequently it is updated, and who is
responsible for maintaining the data.
3. Recruit, train, and
retain capable talent
You
need the right people to translate the data into actionable insights. Many
people may have the technical training for the math, but they may lack the
ability to know which data is important and the business skills that help them
see the relationship between the analytics and the business.
Developing
business-savvy marketing scientists means investing in your analytics people
beyond their technical skills. Improve that capability by teaching current
marketing scientists how to translate and use the data to tell a compelling
business and customer story.
Every
marketer needs basic analytics today. Make sure every new hire is analytically
inclined. The days when marketers could shy away from the numbers are over.
4. Look for tools to
support predictive models
There
are two distinct tools that marketing organizations need to be smart with for
analytics: One is the set of tools to perform the computations; the other is a
set of models that help you understand the impact of an action.
- Tools. Predictive analytics
software can give your company the power to see the future. Selecting a
tool is just like buying a bicycle: If you're a novice, start with a
beginner's bike—not too many gears, durable tires, and so on. Plan to
upgrade to something more specialized, sophisticated, and complex as you
gain experience.
If you're an experienced rider, then you select a bike that will help you achieve your goals. Avid experienced riders might have several bikes—one for mountain-biking, one for road-riding, one for competitive racing, and so on. The same idea holds true for analytics tools. There are numerous resources to help you learn about tools. If you're a novice, be sure the supplier provides solid training in analytics as well as in how to use the tool.
- Models. Every marketing
organization should have a library of customer-centric models to help
understand and anticipate customer behavior and identify when customers
are at risk. Build models for all stages of the customer lifecycle.
Predisposition to purchase, attribution and mix, and customer
vulnerability models should be in your library. Refresh your models as new
data becomes available. Update every model at least annually.
There's no going back
Analytics
and martech are essential tools for Marketing. They are essential to being a
nimble, effective, and customer-centric organization. Together, analytics and
martech pave the way for Marketing to serve as a strategic member of the
organization, to manage and measure marketing performance, and to facilitate
customer, market, and product decisions.
Sometimes, knowing what to do is not enough to successfully execute a
project. But you can get help to better integrate analytics into your
everyday processes to achieve your goals.----------------------------------------------------------------------------------------------
If you need help with your email, web site, video, or other presentation to promote your company, product, or service, please give me a call at 440-519-1500 or email me at john@x2media.us.
X2Media can help you target your content and get your message to the audience in a way that it not only seen and heard, but remembered.
Until next month. . . .remember. "you don't get a 2nd chance to make a 1st impression."
Always make it a good one!!
From X2Media I would like to thank you for your time.
John E. Hornyak
X2Media, LLC
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