Pauline E. Ranger Data and analytics are now a central part of every business’s strategy.
In his book The New Science of Winning, Tom Davenport asserts that a business must have robust analytics to be successful. Tom Davenport argues that companies with a competitive analytics approach use data and analytical capabilities to determine what their customers want, what they’re willing and able to pay for, and what makes them loyal.
He even goes as far as to suggest critical steps in becoming an analytics competitor. These include having a champion on the top, creating a single analytics project, establishing an analytics culture, and hiring the right people.
Davenport is right. It’s up to you how you implement it.
How can you analyze data that is growing exponentially? According to the 2015 Salesforce State of Analytics study, between 2015 and 2020, the number of data sources will increase by 83%. This brings the 10-year total growth to 120%.
A company cannot boil the sea. To be successful, you will need to look at digital marketing data and analytics from the perspective of how they can serve a business goal.
You can see from the history of analytics that it has always been about making decisions based on facts and insights based on data. (See chart). CMOsurvey.org says less than a third of business initiatives use digital marketing analytics.
Digital marketing analytics should be able to answer the question ‘What’
The MarketingProfs article ” How to Apply the Golden Circle in Marketing” explains the importance of starting by asking, “Why?” In the case of analytics, you should begin by asking, “What?”
The organization must decide ” Which business decisions does it need to make?”
Business Purpose is your analytics beacon.
Think about how Marketing can answer these questions using data and analytical muscles.
What do customers buy? Where can we increase our share of wallets? What should we offer, and to whom?
Which customers are at risk? Which customers are at risk? What can we do to reduce the risk to our customers? What can we do to improve customer preferences?
How do our marketing efforts perform today? What about the future? What can be done to improve these?
What are the best markets for us? Where do prospective customers spend their money and time?
What marketing strategies are our competitors using? Where do competitors spend their time and money on marketing? Do they use channels that we don’t?
What should we be doing next? How well are our resources allocated? Do we spend time and money on the proper channels? What should be our investment priorities for the next year?
When Digital Analytics answers these questions, Marketing becomes more important, influential, and valuable for an organization.
These three analytics capabilities will help you focus your analysis
You’ve decided to become a data-driven and analytically oriented marketing organization. We recommend you address three key capabilities to help manage this daunting task.
Do what’s essential.
You must first believe in the importance of data, analytics, and data-driven decisions. You must integrate digital marketing analytics and data into your strategy and process. To do so, you must invest in a critical number of marketing analysts.
Plan your response to ‘What’
Plan how to use analytics to impact processes, performance, and investments. Only move forward with analytics initiatives that answer the question “What?”: customers, markets, solutions, experiences, processes, channels, content. You get the idea.
Create a tool and skill arsenal
Your arsenal should at least include:
Skills and tools to support the exploration and preparation of data.
Processes and rules of data management. It is crucial to know the format of data, its characteristics, its quality, and where it will go.
Data and analytics tools and competencies are required to model, develop, deploy, manage, and operationalize. Be sure to have a sound marketing model library. Salesforce found that high-performing companies are 6.4x more likely to spend more on analytics in the next two years than those underperforming. The study also broke down spending by noting that about 50% of the dollars spent would be on tools and technology. Over one-third went to people/staffing; another third would be for training.
