The Chief Marketing Officer is often challenged by Finance for not having an analytical, data-driven approach to their marketing efforts. Marketers often struggle with accurately measuring the effectiveness and value of their channels and campaigns.
In August 2015, survey results revealed that only 29% of CMOs quantitatively proved the impact of their marketing spend. Moreover, the previous years’ survey illustrated that 63% of projects did not utilize analytics to inform marketing decisions. By leveraging advanced analytics, marketers can reverse the negative perception and build a stronger business case for investments.
Advanced analytics coupled with data and Revenue Management capabilities can help marketers drive organic revenue growth by:
- Creating value for the right customers;
- Capturing the value delivered with the right price;
- Communicating that value using the right channels and messages.
Statistical measurement quantifies the return on investment, and reveals insights on the customer’s buying behavior and channel preference.
However, statistical rigor and validation, which are typically outside of a marketer’s realm of expertise, involve a lot of work – data cleansing, aggregation, designing sophisticated analytical models, and translating complicated math to actionable insights.
Marketers can decode the application of marketing analytics and make the most out of their investments by considering these four areas:
- Identify the impact – What strategic questions do you want answered to generate the most impact for your business in the context of revenue, response, and return? Is it identifying the return of each marketing investment to guide future spend? Or is it predicting customer response to a campaign? Before jumping into the deep sea of analytics, it is imperative to understand business drivers, the financial return against investment, the level of effort required, the visibility of risks, and the impact on customer perception.
- Know the entire purchase journey – Today’s hyper-informed consumers have a plethora of influences on the path to purchase. Marketers can leverage analytics to pinpoint the touchpoints that influence a customer’s buying behavior, and the synergistic effect that each of these have on one other. For example, did a TV ad trigger an email click that led to a website visit and a purchase? Sophisticated statistical models can help answer this and can accurately predict a customer’s journey.
- Look forward – Analytics can help to predict outcomes that allow you to forecast future actions with precision, and course correct if necessary. Having the ability to answer questions such as “what if?” and “what’s next?” gives marketers the power to evaluate different scenarios and pull different levers depending on the desired outcome.
- Drive Alignment – Marketing should not be the only department leveraging these analytics. Key stakeholders within finance, sales, and even IT should be involved to create a shared understanding of the business value that marketing is driving. If marketing utilizes analytics to drive the metrics that matter, one version of truth can be created that all functions can appreciate and understand.
Marketers who leverage advance analytics can create a competitive advantage, generate organic revenue growth, and achieve alignment within the C-Suite.