By Mieke De Ketelaere, Director Customer Intelligence, SAS SWE - SAS Forum blog series [15/10 - Antwerp - Accelerating Innovation with Big Analytics]
Having been part of the analytics industry for quite a while now, it always surprises what organisations regard as the challenges of marketing analytics. Truth is, we have always been gathering customer data and extracting intelligence from it. Even the analytics techniques have remained pretty much the same over the years. It’s not even about how we can now analyse unstructured data, because we have been able to do this for quite a while now. What HAS changed – and a lot – is, first, the continuously expanding volume of available data and, second, how our marketing departments are now able to respond much faster to the insights extracted from this tsunami of data. To my mind, there are three basic challenges in marketing analytics which are directly related to these evolutions: understanding how to read the data in (near) real time, knowing which channels to focus on budget-wise and keeping external efforts and internal goals in balance.
1. Understanding how to read and use customer data
The value of customer data never lies in the data itself but in marketing professionals understanding how to use it. Time and again I meet companies that have trouble to accurately ‘read’ the click information they are gathering. They cannot seem to grasp what the exact worth of one click on a picture is or what it means in combination with another click. Their biggest challenge consists of finding out how they can extract customer intelligence out of the enormous volume of data at hand and use it coherently and fast enough over the different marketing channels.
The answer to this conundrum can only lie in a close-knit collaboration between Marketing and IT. I still remember when both used to be ‘sworn enemies’, seeing each other as pure cost posts, dramatic artists or boring number crunchers. But now that IT workers can prove the actual value of data to marketing, the CMO & the CIO are actually starting to enjoy working together. This is the only way today’s marketing departments will truly succeed in their mission to grab an ever growing fickle customer, by teaming up with their digital savvy colleagues. The days that marketing was just about marvellous ideas, great slogans and extraordinary artwork, are long gone.
2. Knowing which channels to focus on
Marketing attribution is more crucial than ever. Recognizing which marketing channels drive revenue for the company, and how, is absolutely essential to making fact-based, informed decisions for future strategy. Knowing the exact value of all the marketing efforts in the channels is key. No wonder that CMOs decide very carefully, at the beginning of each year, which channels they should be focussing their efforts, time and budgets on.
In today’s digital world, customers leave traces on all of our different channels. We can uncover who clicks where and what the exact impact on revenue is. This intelligence allows the marketing budget to be optimized in the smartest way possible. There are two well-known approaches for assessing the value of your marketing efforts: the bottom-up approach and top-down approach. Bottom-up is mainly behaviour-driven. It will attribute the sales based on the marketing touch points that were used during the customer journey. The top-down approach, on the other hand, is based on Sales/ROI lift analysis. This will show you what the uplift in sales is when you invest more in a specific channel for next month. If you want to learn more about this, I highly recommend Steven Hofmans’ blog post `Marketing analytics for attribution modelling’.
3. Striking the right balance between customer experience and internal challenges
Organisations face both inward- and outward-facing challenges. The efforts made for both sides need to be balanced on a company-wide level but, on a department level, there will always be one that weighs more heavily than the other. Services and marketing divisions, for instance, will be more outside-focused, looking at the customer. While other departments will be more driven by internal processes like meeting strategic objectives or enhancing cost reductions. The trick is to find the perfect equilibrium between external efforts in customer experience and internal dynamics.
Contact policy is an important part of the customer experience, an important external dynamic. Companies tend to carefully record how much push content can be delivered to customers and at which intervals, in order not to annoy them. Let’s take an example: Customer X is gathering many items in the basket of the e-shop of a large retailer, but at the very end of the paying process, he backs out. Normally – seeing that there was recent contact with Customer X – the promotional e-mail campaign that was planned the very same week, would not have been issued to him, as described in the retailer’s contact policy. But, in view of the fact that 2 objects of the aborted purchase are included in the campaign, it could be wise to send it anyway and deliver that little extra push to the customer. This is a perfect example of how external concerns – about not spamming the customer – and internal – answering to sales goals – can be reconciled with the right insights provided by analytics.
Marketing analytics is never JUST about collecting data (though that’s a big part of it, obviously), the biggest struggles are always about what to do with the insights, about interactions, about push & pull, about channel choice and about achieving balance. Marketing experts who understand this already stand a lot further than most of their colleagues.
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