Without a doubt, data and analytics have become central to the business strategy of all organizations.
In his book Competing on Analytics: The New Science of Winning, Tom Davenport argues that a company needs solid analytics to succeed. He says that those who are competitive in their analytics approach use data and analytics to discern what customers want, what they are willing to pay for, and what they remain loyal to.
In fact, it even prescribes the key steps to becoming an analytics competitor: being a champion, creating a unique analytics initiative, creating an analytics culture, hiring the right people, and using the right technology.
If you look at the analytic journey, you’ll see that it’s always been about making business decisions based on facts and insights based on data (see chart). However, according to CMOsurvey.org, less than a third of business initiatives use marketing analytics.
Analysis should focus on answering the “what”
So to see how marketers can use their data and analytics to answer these types of questions:
- Which customers do they buy? Where can we expand our share of the portfolio? What offers should we make and for which customers?
- Are there any risks for customers? This one? What can we change to reduce customer risk? Can we improve customer preferences?
- How are our marketing initiatives today? And in the long run? What can we do to improve them?
- Where are our best market opportunities? What do potential customers spend their time and money on?
- How does our marketing compare to our competitors? What do competitors spend their time and money on? Do they use channels different from ours?
- What should we do now? Are our marketing resources allocated correctly? Are we spending time and money on the right channels? How should we prioritize our investments for the coming year?
When marketing uses analytics to provide answers to these questions, it suddenly becomes more relevant, essential, influential, and valuable to a company.
Focus your analysis with these three resources
You’ve decided that you’re ready to become a more data-driven, more analytic marketing organization. To help you run a demanding business, we recommend addressing these three resources first:
1. What is important must be done
First, you must believe that data, analytics, and data-driven decision-making are important. If you do, your organization must integrate data and analytics into its overall strategy and processes. This will likely require investment in a critical mass of marketing analysts within the organization.
2. Define an action plan to answer “What”
You need a plan for how you will use analytics to influence processes, performance, investments, and revenue opportunities. Move only analytics initiatives that respond to ‘What’: which customers, which markets, which solutions, which experiences, which processes, which channels, which content. Well, that’s the idea.
3. Build an arsenal of tools and skills
Your arsenal should contain at least the following:
- The skills and tools that support data for exploration and preparation.
- The processes and rules for data management. For example, it is important to understand how data is collected, how it is formatted, the characteristics and quality of the data, and the systems in which it is stored.
- Data and analytical tools and skills for modeling, model development, model implementation, management, and operations. Have a solid library of marketing templates. The Salesforce survey found that high performers were 6.4 times more likely to increase analytics spend over the next two years than low performers. The study further split spending and found that 50% of dollars go to tools and technology, just over a third to people/staff, and a third or more to training.
Using data to manage strategic business decisions will improve marketing efficiency and effectiveness. As you take the next step and start analyzing the data, dive into your customer base to understand their needs and make changes to better reach your audience.
It is not easy to become a data organization for action. This requires significant progress toward a new marketing mindset, as well as a significant investment in your marketing team. By making these investments, everyone on your marketing team has the skills to move from data to insights and insights to action.