So marketing analytics are a waste of money, eh? We reported as much this week after seeing results of the CMO Survey by Duke University. It triggered some people to defend marketing analytics and its place in an organization.
Today, we discuss how to make marketing analytics work by using the right tools and generally having the right mindset and approach.
Analytics a 'Servant'
"No marketer I know would disagree that analytics are important. But many of us don't think about them the way that we should," said Jerry Rackley, chief analyst for Demand Metric, a marketing and research advisory firm based in London, Ontario.
Using a colleague's words, "analytics are a great servant, but a terrible master," Rackley told CMSWire.
He continued, "What truth there is to this statement. Many marketers fear or avoid analytics, because they view it as a 'master' and not the 'servant' that it really is."
Rackley cited a company survey in December that showed 14 percent of companies lack a marketing analytics process. Why? They:
- Don't have the tools (36 percent)
- Don't make it a priority (32 percent)
- Don't have the experience (25 percent)
- Find it too hard to get the data (11 percent)
- Other (25 percent)
Refining the Focus
Rackley said marketers should begin to focus on customer acquisition analytics.
"Marketers need to understand customers and the customer journey better," he said. "And, they need to have some solid metrics on the costs to acquire customers.I think that when organizations discover just how much they have to spend to acquire a customer, they then begin to realize just how important customer retention is."
Who should be charged with making sense of marketing analytics? Marketers, of course. But they may need an assist from someone with statistical analysis or data mining/modeling skills, Rackley said.
His organization's survey asked companies who's involved with sales and marketing analytics:
- Marketing team members (79 percent)
- Executives/directors (49 percent)
- Sales team members (34 percent)
"Marketing needs to lead and own this effort," Rackley said, "but they need to be equipped with the training, tools and skills to do it right."
Most marketers for analytics use the spreadsheet. Rackley's take? Don't do it.
"As it turns out, this is a terrible tool on which to base an analytics process," he said. "The reason is because two factors critical to an effective analytics process are collaboration and sharing."
Collaborating to make sure you're measuring the right things and seeing what matters is important. Once the data's collected, marketers need to share it and collaborate further about what it means and how it should guide the efforts of the marketing team.
"Spreadsheets don't encourage collaboration and sharing, and in fact are a barrier to it," Rackley said. "The tool type that we found is best at fostering collaboration is data visualization."
Using Data the Right Way
When analytics tells us things you don't know and need to know so that you can make better decisions, you're on the right track. Don't use analytics simply to justify what marketing is already doing.
"If the analytics support the current direction, great," Rackley said. "Share them with the world.If they don't support the current direction and thinking, then the assumption is they're wrong, and they get ignored.This type of advocacy analytics is very political in nature and really doesn't represent what marketing needs to be doing."
Develop an analytics discipline. Have the courage to go where it leads, Rackley added. Practice transparency and communicate well.
"As marketers, we can track metrics that mean something to us marketing insiders, but nothing to the folks in the C-suite," Rackley said. "I believe we must get better about bridging the gap between marketing analytics and what they mean in terms of real business results.You can talk to the CFO in great detail about brand equity and how you've measured it, but he or she will have no idea about what brand equity means to the bottom line."
When done properly, analytics allows us "to tell the rest of the organization with authority and conviction exactly what kind of impact we're having, what kind of results we're creating."
Title image by Demand Metric.