One of the companies we're working with is planning to make a significant change to the way Marketing operates. The company has done as much internally as possible, relying on external experts on a very limited basis.
It is now moving toward using more external experts because increased competition makes it imperative to harness the value of strategic—not just operational—speed.
Does strategic speed really matter? Companies that increased their strategic speed improved their top and bottom lines, averaging 40% higher sales and 52% higher operating profits over a three-year period, according to a Harvard and Economist Intelligence Unit study conducted with 343 businesses.
Along with analytics, alignment is a critical aspect of strategic speed. IBM's 6th annual study, Analytics: The Speed Advantage, found that speed-driven data and analytics have a significant impact on business performance.
Marketers can deliver on the value of speed to provide competitive advantage by upping their analytics and alignment game:
- Alignment is essential for any business to realize its financial targets, and achieving financial targets requires finding, keeping, and growing the value of customers—all three of which fall squarely in the domain of marketing.
- Analytics and the customer and market data that enable insights can help marketers with a keen understanding of the business to guide and focus the organization on the best opportunities.
How can you improve your alignment and analytics skills and results?
1. Align marketing strategy with business strategy
Strategy is at the heart of your company's ability to realize growth. Strategy is how you are going to make your company matter to the right market.
Business strategy encompasses what your company stands for, what customers you serve, how you will meet their needs and expectations, and how you differ from your competition. It's the secret sauce for your company.
The Evergreen Project examined more than 200 management practices in 160 companies over a 10-year period to determine which practices were essential to a company's financial success. The financial measurements used included total return to shareholders, sales, assets, operating income and return on invested capital.
Without exception, all of the financially successful companies had a clearly defined and well-articulated strategy, and those companies significantly outperformed the losing companies by a...
- 945% to 62% margin in total return to shareholders
- 415% to 83% advantage in sales
- 358% to 97% advantage in assets
- 326% to 22% advantage in operating income
- 5.45% to -8.52% advantage in return on invested capital
Marketing's objectives, when orphaned from business strategy, are doomed. When Marketing is aligned, it brings business strategy to life. Marketing's own strategies reinforce the business strategy.
Do a quick check: Does each of your marketing objectives link directly to a specific quantifiable business outcome?
- If your answer is yes, you're ready to execute on your marketing plan and develop the marketing programs and tactics that will communicate the brand promise, highlight relevant features and functions, and connect with and engage customers and prospects.
- If your answer is no, go back to your leadership team and work on translating the business strategy into quantifiable customer-centric terms. Otherwise, speed of execution without clarity of strategy may just get you to wrong destination faster.
For example, if your short-term business strategy is to increase share of wallet by 10%, your marketing strategy needs to be aligned with activities that correlate directly to that goal. Implementing a marketing strategy focused on customer engagement may be the path you choose to increase your share of wallet. Example activities may include...
- Developing customer personas to improve message and content development
- Conducting voice of customer or other pertinent research to gain better insight into customer preferences and requirements
- Mapping the customer buying process to better synchronize channels and touchpoints
Measuring the effectiveness of these activities by selecting the appropriate metrics will tell you whether you are heading toward success. (A great resource that shares insights on what metrics you need is our workbook, "Leveraging Eight Key Metrics for the Customer-Centric Organization.")
2. Strengthen your analytical muscle
Firms using marketing analytics and market dashboards outperform their competitors, research by Dr. Koen Pauwels has found. Even a small improvement in using analytical dashboards brings an 8% higher return on assets, on average, and a 21% improvement for firms operating in highly competitive industries (It's Not the Size of the Data—It's How You Use It: Smarter Marketing with Analytics and Dashboards, 2014).
Harnessing the power of data enables your company to remain competitive and you, as a marketer, to prove the value of your marketing. Analytical skills lead you to have a more focused and streamlined approach to solving problems and making decisions.
Analytics is logical analysis that uses some type of algorithm or mathematics. It involves applying statistics and mathematics to data in an effort to see the patterns and trends in the data. In 2007, Davenport and Harris described analytics as a set of technologies and processes that use information and data to understand and analyze business performance.
The arrival of advanced analytics and the availability of plentiful data have allowed marketers to demonstrate return on investment with a degree of precision that's never been possible before. Marketing organizations that are able to quickly synthesize data and gain actionable insights become essential members of the team.
If you haven't done so already, embrace data and build your analytical muscle, then develop and use models to make smart investment and strategic decisions.
Here are just a few of the many ways to use analytics in marketing:
- Create models to help understand, monitor, and predict customer behavior, such as likelihood to defect or predisposition to purchase
- Make and optimize channel and mix decisions; understand the impact of a campaign on sales; and quantify performance
- Understand where your customers are struggling the most and how to use support resources to improve customer satisfaction
Many businesses use analytics to develop actionable dashboards that can be used to optimize performance, and to make decisions and course corrections. A marketing dashboard increases Marketing's credibility and benefits both the marketing team and the C-Suite.
Aligning marketing and business strategies and developing analytical muscle are two great ways for marketers to foster and increase the business's strategic speed, which will help your organization gain competitive advantage and help you gain credibility and influence within the business.
(For more, register and download our whitepaper titled "Intuition to Wisdom: Transforming Data Into Models and Actionable Insights.")
You may like these other MarketingProfs articles related to Marketing Strategy:
- 10 Ways to Improve Customer Experience [Infographic]
- The Role of Data in B2B Go-To-Market Strategies
- Three Steps to Personalizing the Overall Customer Experience
- Four Steps Marketers Can Take to Drive Growth During a Recession
- The Most Important Elements of a B2B Multichannel Strategy
- Eight Myths of Marketing Automation