Marketing organizations are making major moves into analytics technology – many of them for the first time. For best-of-breed companies, the results have been stellar, with major boosts in marketing effectiveness, ROI and revenue. But others struggle, due in part to problems integrating data-driven thinking across the company, and turning insights into decision-making actions.
Here are some best practices for building an analytics driven marketing organization gleaned from companies that have earned recognition for analytics excellence in the marketing world.
1. Build Your Internal Triad and Gain Buy-in.
Today’s savviest CMOs are building internal “triads” between marketing, finance and analytics to form a solid foundation of internal support. The marketing/finance linkage is proving particularly important in many cases (see our Harvard Business Review article on this topic.) For example, the CMO of a major financial firm we work with enlisted help from his finance department to bring new analytical discipline to the marketing team. That, in turn, created greater respect and buy-in for marketing’s efforts to become more data-driven and connect marketing investments to business results.
The analytics team at one major tech company provides clear and simple presentation materials in customized packages targeting one senior marketing and finance executive at a time. The team also reaches its internal marketing community by inserting key insights into executive keynotes, videos and training sessions.
For a fast-growing insurance carrier, a key win was understanding what finance wanted from analytics. That laid the foundation for cooperation and joint planning. Now the insurance company’s analytics team invites questions and challenges, which builds confidence in the model and leads to broad support.
2. Ask Smart, Precise and Tough questions
Asking the right questions means being more exacting about how you approach marketing measurement, and braver about what you’ll do with your learnings. Generally you should start by asking what, exactly, you are solving for. Two key quotes from award winning marketers:
- “Keeping our analytics in a cycle of model/test-learn-pivot gives us the confidence to challenge ourselves even if we are uncomfortable.”
- “If you can’t measure the outcome, you need to ask yourself if you should be doing this at all.”
3. Buy/Build Smarter Technology
Think through the marketing analytics technology you are using, or plan to use. Key areas include:
Business fit: Can it handle complex product portfolios and advise on next dollar investment across media, marketing, product and service opportunities? Will it provide both a top-down and bottom-up view in one place to bring together media measurement and direct/addressable marketing?
Data Integration: Can it pull in and analyze both internal and external data from all online and offline channels?
Tool functionality: Is the software accessible and useful across different groups and decision-making levels? Can users easily share results with others, from managers to the C-suite?
Optimization approach: Can it predict results from different scenarios?
4. Validate Results with Stats & Sensibility
It’s not enough to get interesting insights — you need to validate learnings to know if you’re right. The most successful companies combine stats and sensibility. In other words, they strike a balance between marketing sensibility and statistical fit. To check sensibility of results they:
- Check for acceptable measures in marketing contribution, source of volume change, and relative effectiveness of each touch point.
- Conduct sanity checks against known business truths and existing knowledge.
5. Pioneer New Cross-Functional Connections
One commonality among many analytics-driven brands is the ability to make connections from one business group to the next—or one business to the next. One tech leader looks at halo effects — the impact of marketing one product on the sales of another. Another considers the impact of ingredient brands. A telecom firm carries marketing insights across multiple departments, including customer service and sales teams.
6. Go Agile – Rapid Insights Allow for Faster Pivots
The obvious example is using digital insights to guide programmatic buys. But it’s hardly the only one. Rapid, analytics-based insights allow for pivots in traditional media buying as well. As the CMO of one successful firm says, “We literally make decisions day by day based on performance. For example, we have created the agility to shift dollars from national TV to local markets when a specific designated market area is outperforming.”
7. Show Results
Nothing speaks louder than results to draw attention to the data-driven organization you’ve built. With results comes new resources – and credibility. Here are samples of impact top firms are seeing:
- The insurance company boosted the percentage of products sold via marketing from 9% to 29%.
- Incremental marketing investments in 2013 generated more than $100 million in revenues for one tech company, resulting from a 1% to 3% increase in sales contribution from marketing.
- Within six months of its new analytics program, another tech firm saw a 5% lift in sales and a 465% return on its investment.
- The telecom firm increased the effectiveness of retention campaigns by 50%. New predictive upsell campaigns delivered the equivalent of an additional 3% of sales with no added distribution costs or employees.
For more details, download the full CMO Briefing paper titled Best Practices for Creating an Analytics Driven Marketing Organization: 7 Secrets from Award Winning Brands. Also see this related article on 4 Marketing Analytics Trends That Are Shifting Power Back To Brands.
This article was written by MarketShare from Forbes and was legally licensed through the NewsCred publisher network.