Learn how retail CMOs can maximize the true power of their analytics.
Most senior retail marketers now believe in the power of analytics to help them make decisions. However, too often these same marketers haven’t set up the most efficient frameworks and tools to help them squeeze the most out of their analytics efforts. Meanwhile, they probably already have the data and tools they need to take these steps. Here are five steps retail CMOs can take to maximize their resources and unlock the true power of analytics done right:
1. Know who your customers are and how much they’re worth. Know each customer by name, address and what they’ve purchased in the past if you capture transactions. If you don’t capture transactions, survey a representative sample of customers and gather the same information.
Why? You want to be smart about how you spend your marketing dollars. It’s a fact that most of the revenue and profit at many companies comes from a relatively small percentage of current customers.
2. Create a simple, consumer-level business case pro forma. Be able to count the number of current customers you need to retain and the number of new customers you need to acquire. Set “realistic” retention and conversion rates to size the “opportunity pools” from which to draw these consumers and calculate the amount you can afford to spend on each consumer in the pool.
Why? You want to make sure that the executive team agrees on the size of the task and is aligned on the assumptions. You want the plan to be “operational” rather than “theoretical.”
3. Construct an “opportunity pool” of individual consumers. Build reliable statistical models of consumer value (revenue and receptivity) using your existing customer data, survey data and data from compiled list sources. Then assign each consumer a “marketing allowable” (how much you can afford to spend) and a “media indicator” (how you can best reach them).
Why? You want to know who your revenue targets are by name and address (online and offline) so you can focus your efforts and eliminate redundancy in media and list buys.
4. Implement a valid consumer-level measurement approach. You need to measure whether the consumers you targeted in the marketing plan wound up making a purchase. Compare these targeted consumers to a “control” group of untargeted consumers so you can determine the return on your marketing investment. If you capture transactions, you can compare those. If not, measure via survey.
Why? You’re accountable for marketing spending. If it’s not working, it’s time to change the allocation to something that will work.
5. Use campaign management software to deploy, track and evaluate. Get access to your targets easily for strategic planning. Send them to external partners for insight generation and execution. Demand measures of media buys and campaigns, and make them simple reports that you can share with the executive team to provide progress updates.
Why? Don’t let size or complexity keep you from optimizing spending and driving results. You need a simple platform that takes advantage of automation technology to make it possible and cost effective.