Okay, let me start off by being as succinct and transparent as possible: Data and analytics are not only here to stay, they are increasingly going to become the differentiator between organizations that succeed and those that get left behind.
That’s not just me making a provocative statement out of self-interest (full disclosure: I work for a data and analytics services company), but something being touted by global consulting organizations, espoused by CEOs and highlighted on many marketers’ Top 10 lists for 2016. In this age of disruption where customer experience is a business imperative, harnessing the power of data to create actionable insight, increase relevance and make smarter decisions is a must.
If you are already on this journey, kudos to you, but now is the time to take it further. If you haven’t yet climbed aboard the data and analytics train, it’s not too late to hop on and create a competitive advantage with a well-structured plan.
To that end and to encourage this momentum, consider the following priorities for your organization in 2016.
- Take data-driven insight to the next level:
According to a recent report from VB Insight, 80 percent of consumer-facing companies don’t understand their customers beyond basic demographics and purchase history. This lack of insight will be an organization’s Achilles’ heel if not corrected. CMOs must drive more actionable intelligence from their internal data and other sources that can fill the gaps.
- Focus on measurement and ROI:
Modern marketers have to love data, be relentless in measuring initiatives and stay laser-focused on evaluating return on investment. Every member of the marketing team must have a strong foundation in establishing relevant metrics and be able to conduct even a basic ROI analysis.
- Hire for data and analytics fluency:
Training can help bring employees’ core skills up to the required level. However, establishing hiring parameters that specifically look for data competencies at the outset will ensure that new recruits come equipped with both qualitative and quantitative abilities—an absolutely necessity in today’s data-intensive marketing environment.
- Challenge your agency to be more data-driven:
Data-driven insight needs to permeate all aspects of the creative process, from the creative brief to execution. With the availability of granular intelligence on consumers—including postal code-level demographics, lifestyles, consumption behaviours and social values—agencies need to reflect these insights in their creative and media buys.
- Leverage the small data:
For all its hype and almost mythical status, Big Data has been—in many cases—more of a distraction than a solution at most organizations. The attention paid to harnessing Big Data has been at the expense of a more practical focus on leveraging organizations’ existing structured data, often held in disparate internal databases. Follow the adage of “learning to walk before you run” by identifying the data assets that are more readily available for analysis and more likely to be relevant in the shorter term.
- Plan for data quality:
You’re only as good as the quality of your data. Since marketers increasingly rely on data for customer segmentation, targeting and messaging, they need to take the lead role in ensuring that appropriate policies, protocols and resources are in place that drive data collection, quality, completeness and availability. A data quality audit is a great place to start.
- Insist on proper governance:
Customer data is one of the top assets an organization possesses. Beyond data quality, organizations must manage and use data in the best interest of their customers. This requirement includes privacy and security considerations, but rules on who can access the information and how it is can be used must ultimately produce a better customer experience. Though governance will generally fall in the legal domain of most organizations, every marketer should be aware of the general aspects of this policy.
- Move from diagnostic to predictive analytics:
Roughly 80 percent of marketing analytics today fall in the diagnostic category. That is, they provide a rearview mirror perspective of what happened in a particular situation (such as a campaign response) and, at best, identify why it happened. While diagnostic analytics are a critical building block to any business intelligence practice, leveraging this foundation for more predictive opportunities can deliver an exponential return. Models that deal with customer lifetime value (CLV), churn, next-best-product, channel optimization, optimal contact strategy and site location selection are just a few examples of predictive analytics applications that can help scale data-driven efforts.
- Use both in-house and outsourced resources:
The decision to enhance analytics capabilities cannot be reduced to choosing between building in-house capabilities versus tapping outside resources. It’s really about balancing the two options. Unless your organization is an Amazon, Google or Walmart, it probably will need to enhance its analytics “center of excellence” by expanding its team of database analysts, data scientists and business strategists, as well as accessing secondary and tertiary sources of valuable data and analytics services.
- Secure the required budget:
Last but certainly not least, organizations hoping to effectively leverage data and analytics must ensure the required investment is in place. According to a 2015 Harvard Business Review survey of CMOs, organizations are currently spending just 6.7 percent of their budgets on analytics and expect to spend 11.1 percent over the next three years. Other studies peg the investment significantly higher. But as the senior marketing executive who effectively ”owns” the customer relationship, the CMO needs to champion the cause to ensure that data and analytics-driven marketing is funded to deliver results.
While more dynamic and exciting than ever, the job of the marketer has never been more demanding. Increased customer expectations across a fragmented, multi-channel environment combined with internal revenue pressures mean that marketers are in the proverbial hot seat. That said, a well-structured data and analytics strategy can go a long way toward providing the actionable customer insight to set organizations apart from the pack. Make 2016 the year that you and your organization embrace this imperative.
Evan Wood is the Senior Vice President of Marketing and Custom Services at Environics Analytics, Canada’s premier provider of data, analytics and marketing services.