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Analytics and Marketing Operations: A One-Two Punch for Growth

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In this article, you'll learn...

  • How to use analytics to drive growth
  • Actionable steps to taking an analytics approach to marketing

Today's customers are more value-oriented and less loyal, creating greater challenges in the current business climate. Considering the increase in customer expectations, the growing competitive landscape, the proliferation of new technologies and channels, and the avalanche of data, marketers need more than intuition and experience to succeed. The world is just too dynamic, and the pace of change is just too fast.

In fact, the deluge of data is actually fueling the growth of analytics. As Dave Frankland of Forrester Research once said, "The goal is not to collect data, but to develop insights."

Insights are the purview of analytics. Analytics are algorithms and mathematical techniques applied to large volumes of data to help marketers gain insights that drive marketing and customer strategies and optimize marketing efforts.

Running analytics is hard and time consuming, so why make the effort and investment? A research study by Accenture found that companies that invest heavily in their analytics capabilities outperform the S&P 500 on average by 64% and recover more quickly during economic downturns.

How are those high performers different? First, they have above-average analytical capabilities. Second, they have better decision-support analytical capabilities. Third, they value analytical insights more, which seems obvious because they wouldn't have invested in the first two otherwise. And finally, high performers use analytics across their entire organization, including Sales and Marketing.


"Companies need to be analytically inclined and data-driven in order to turn insights into action for driving growth," says Julio Hernandez, a partner at Accenture.

How can you use analytics to drive growth? Marketing analytics help you determine which customers are worth paying a lot of attention to, and which aren't.

Analytics help you evaluate and address the following five growth opportunities:

  1. Acquiring more valuable customers
  2. Acquiring customers who will buy more from you
  3. Acquiring customers who will buy your high-value products or services
  4. Retaining high-value customers longer
  5. Determining which marketing activities best accelerate customer acquisition and improve retention

Companies use analytics to make decisions related to business operations, competitive moves, staffing and skill requirements, customer strategy, positioning and messaging, and marketing optimization. Even so, few companies really invest in analytics. A 2011 Ventana Research study that included input from more than 2,850 organizations found that more than half of them spend the majority of their time on unproductive data preparation and quality-assurance processes, rather than on applying analytics.

With so many possible analytics projects to evaluate, it may be hard to know where to start. To prioritize projects, evaluate them against two criteria: ease of execution (from easy to hard) and value derived (from low to high). Score each project, and classify it into one of four categories:

  1. High-value/easy-to-execute: must do
  2. Low-value/easy-to-execute: quick hit (things you can do in 30 days or less)
  3. High-value/hard-to-execute: transformative
  4. Low-value/hard-to-execute: nice to have

Focus on the high-value/easy-to-execute projects first to demonstrate fast high-value wins. Then, tackle the low-value/easy-to-execute projects for the next set of fast wins while you put a plan in place to address the high-value/hard-to-execute projects.

The math associated with analytics is only one step. Here are a few items that should be on your checklist before "doing the math":

  • Establish a clear methodology for guiding your work.
  • Define the business objective and desired outcomes.
  • Analyze and select the most appropriate data sources to support the outcomes and scope of work.
  • Select, extract, and transform data, and use that to create models.
  • Create, test, and validate models.
  • Apply model results.
  • Manage and modify models to improve performance.

Clearly, an analytics approach to marketing requires skills and resources. In the book The Four Pillars of Profit-Driven Marketing, authors Leslie Moeller and Edward Landry claim that being good at analytics is not enough. The keys to success, they say, are analytics along with the tools to disseminate the insights gained from the analytics, the processes that ensure analytics is not an afterthought, and the proper organizational infrastructure.

Many companies have some analytical capability, usually residing in a market research or intelligence function. But how do you scale it?

The optimal way to scale is via a marketing operations function—the oxygen for growth. A properly chartered and resourced marketing operations function facilitates an agile marketing organization, which...

  • Defines efficient and scalable processes, including data capture and management
  • Uses analytics to identify and recommend ROI-led marketing investment, including developing models to optimize channels
  • Facilitates strategic planning and growth by using analytics to develop market and customer segmentation models

Our research shows that many organizations have someone performing some part of the marketing operations function, primarily budgeting, research, and planning.

As we approach 2012 and continue to try to manage a business environment that many of us would describe as uncertain, perhaps it is time to invest in the infrastructure and skills to reach the next level of capabilities on your marketing metrics and analytics journey.


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Laura Patterson is president and founder of VisionEdge Marketing. For 20+ years, she has been helping CEOs and marketing executives at companies such as Cisco, Elsevier, ING, Intel, Kennametal, and Southwest Airlines prove and improve the value of marketing. Her most recent book is Metrics in Action: Creating a Performance-Driven Marketing Organization.

Twitter: @LauraVEM

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  • by Greg Timpany Wed Sep 21, 2011 via web

    Excellent summary of the current state of marketing analytics. Let's see if 2012 is the year where marketing and analytics gains a foothold across the board.

    Greg
    @DataDudeGreg

  • by Ian West Thu Sep 22, 2011 via web

    Nice to see the emphasis upon action and application - remembering the old adage; "You don't fatten a pig by weighing it."

  • by SergeKuznetsovFinUni Mon Oct 31, 2011 via web

    I love the fresh new marketing metrics, especially when they are finance-oriented.

  • by Jack Mon Nov 14, 2011 via web

    The question is the willingness of Mgt to invest the resources (people, systems and $$$) to do this. I have been working in analytics for a long time and constantly am fighting these battles. The rate of change is what creates the challenges in the battle for the hearts of our customers

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