Most senior marketers that I come in contact with believe in the power of marketing analytics to help them make decisions. However, I often find that these same marketers have not set up the most efficient frameworks and tools to help them get the most out of their analytic efforts.
To that end, I offer the following five things I would do to really get in their head and become “Analyst to the CMO.” You probably already have the data and tools you need to take these steps. Do so, and I guarantee you will see results.
1. Know who our customers are and know how much they are worth. I want to know each customer by name, address and what they have purchased from us in the past if we capture transactions. If we don’t capture transactions, I want to survey a representative sample of our customers and gather the same information. Why? – I want to be smart about how we spend our marketing dollars. It is a fact that most of the revenue and profit at our company comes from a relatively small percentage of our current customers.
2. Create a simple, consumer-level business case pro-forma. I want to count the number of current customers we need to retain and the number of new customers we need to acquire. I want to set “realistic” retention and conversion rates to size the “opportunity pools” from which to draw these consumers and calculate the amount we can afford to spend on each consumer in the pool. Why? – I want to make sure that the Executive Team agrees on the size of the task and is aligned on the assumptions. I want the plan to be “operational” rather than “theoretical.”
3. Construct an “opportunity pool” of individual consumers. I want to build reliable statistical models of consumer value (revenue and receptivity) using our existing customer data, survey data and data from compiled list sources. I want to assign each consumer a “marketing allowable” (how much I can afford to spend) and a “media indicator” (how I can best reach them). Why? – I want to know who my revenue targets are by name and address (on and offline) so I can focus my efforts and eliminate redundancy in my media and list buys.
4. Implement a valid consumer-level measurement approach. I want to measure whether or not the consumers I targeted with my marketing plan wound up purchasing my brand. I want to compare these targeted consumers to a “control” group of untargeted consumers so I can determine the return on my marketing investment. If we capture transactions, we will compare those. If we don’t, we will measure via survey. Why? – I want to be accountable for our marketing spending. If it’s not working, I want to change the allocation to something that will.
5. Utilize campaign management software to deploy, track and evaluate. I want to access my targets easily for strategic planning. I want to send them to external partners for insight generation and execution. I want measures of media buys and campaigns. I want simple reports that I can share with the Executive Team to provide progress updates. Why? – I don’t want size or complexity to keep me from optimizing spending and driving results. I want a simple platform that takes advantage of automation technology to make it possible and cost effective.
Scott Bailey is executive vice president of Target Data, which unlocks the power of customer data through targeted marketing campaign execution that enables businesses to quickly identify, attract and keep their highest value customers.