Data analysis needs a business framework and processes to produce consumer insight.
By Christopher Skinner
I love when I come across an example of a company successfully integrating Internet capability. Not just for marketing purposes but for business processes – thereby improving the company as a whole. But it always makes me think, why aren't there more stories like this?
In this McKinsey Quarterly article on Big Data there are several examples of how companies are effectively using the volumes of data that are normally silo-ed in departments to change their predictive ability, and their profitability.
So the question is then, why aren't more companies able to do this? Resources. There's a dearth of folks with the analytic skills to connect what can be very disparate data— and beyond the analysis, the management foresight and understanding to know what data look for, and why.
Which is why we have so many companies collecting data, and so very few using it well— using it beyond one-off projects.
So, perhaps instead of investing in more technology to capture data, companies should be investing in the education of their (potentially) most valuable resources— their people.
By Christopher Skinner
In a recent statement, eBay CEO John Donahoe said that "The lines between online and offline are blurring. Almost half of all retail transactions involve a consumer accessing the web at some point in the shopping process, whether it be researching the product, looking for store locations, or making the final purchase."
"Websites are driving foot-traffic and demand," he goes on to say, "But retailers don't know who their customers are, and the key to getting ahead is figuring that out."
I couldn't agree more, but then he says that data, culled in cooperation from online commerce sites like eBay and others will allow companies to understand their customer. I assume he means then that this understanding can then be leveraged to create better marketing, better products and sales growth.
I wonder though if this isn't just another rabbit-hole of discrete data analysis. Like the cookie, doesn't this solution of mining consumer data based on logins and activity on large sites like eBay have many failure points?
Online marketers already have trouble translating the consumer information they do have into viable media plans — anyone who's ever received the directive to reach 25-54 women making $100K knows that segmentation is a problem.
On top of segmentation and targeting, how will this discrete customer 'understanding' be measured? Discretely? Not likely, as businesses already struggle with measuring the online-to-offline customer journey on a macro level.
The article states, "Shopping has evolved in ways that weren't even possible years ago. Technology is at the middle of this."
This statement sums up the issue for me: Looking so closely at discrete data, because it is technically possible, while missing the big picture of how this integrates into business. It seems to me the classic story of 'not seeing the forest for the trees' strikes again.
Posted October 17th, 2011 in Business Growth, Customer Engagement, Customer Journey Marketing, Customer Segmentation, Data Analysis, Innovation, Internet Devices, Internet Integration & eBusiness Strategy, Online to Offline Media, Research Online Purchase Offline, Sales Attribution,
By Christopher Skinner
In a meeting with a client yesterday, I touched upon what I believe is the single most unique perspective my company brings to the table: That we do not measure the success of our marketing efforts against marketing metrics. Our performance is judged entirely by our client’s bottom-line financial performance.
This in turn drives our success, because it drives our clients'.
I'm not saying this for shameless self-promotion either, I'm saying this because I think more companies need to think about their marketing and sales this way. And they need to structure their partnerships in a way that realigns their marketers/agency objectives with their own.
Let me explain by telling you a story --
Normally, we look at the relationship between several key metrics, to make decisions about how we scale marketing. So for this client we look at how Impressions drive Inbound Calls, how Inbound Calls drive Orders, how Order Volume affects Revenue, and the ratio of Revenue to Gross Profit, to name the top line elements.
We're at a point where we can turn the dial on marketing to drive those calls, all the while maintaining marketing costs. Awesome, I know.
But a few weeks ago, we discovered something else— that there is actually an optimal amount of Inbound calls to drive Profit Volume. Bear with me, as this is somewhat complicated but it clearly illustrates how a partnership poorly structured puts a marketer’s objectives above their clients.
By driving call volume above a certain amount, the sales people had less time for outbound calls, which are on average as profitable as inbound. By scaling back marketing cost, we allowed the sales team to make those calls, and thereby increased the overall profit margin between marketing cost and total Revenue.
So we actually cut marketing to drive overall profitability. In most relationships, this would never happen. Instead, the marketer would keep to the maximum marketing budget within the preset limits. Marketer wins, client loses.
What we've done is rewritten the story so that we both win – and it all comes back to success metrics.
So, what are you basing your marketers' success on?