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