Back in 1870 John Wanamaker, the father of retail, remarked: Half of what we spend on marketing is wasted – the problem is we do not know which half. During tough economic conditions, we can’t afford to blow half our budget. Increasingly budgets are being questioned and hard metrics are being asked for. ROI is now more and more at the forefront of everyone’s minds.
However a number of studies show that measuring ROI is a major challenge for many organisations:
- 47% of companies were not able to measure the value gained from marketing
- Only 44% of CMOs feel fully prepared to be held accountable for marketing ROI
- 57% of companies are not basing their marketing budgets on any ROI analysis
- And over 30% of companies base their marketing budgets on historical spending and simply gut instinct
THE GOOD NEWS
The good news is that with the rise of new and easily measurable technologies and channels such as mobile devices and social media, we now have the potential to dramatically improveour levels of customer engagement and can take a lot of the guesswork out of budget decisions. .
We are now capturing a massive amount of structured and unstructured data. And the need to understand this data is top of the agenda. The information we now receive on customer transactions, loyalty programmes, likes, dislikes, and preferences could really give us a very deep level of customer intelligence.
THE BAD NEWS
But recent research by Columbia Business School shows that we are currently wasting this potential. They found that:
- 42% of marketers are not able to link their customer data at the level of an individual customer
- nearly half are not using data to personalise their marketing communications
- 28% still do not know which high-value customers to focus their marketing on
- two in five marketers cannot turn that data into actionable insight
- and 51% are not using the data they are collecting at all
It is clear that many marketers are feeling overwhelmed with the amount of data they are receiving. The IBM CMO Survey for 2012 found that 65% of CMOs are unprepared for the growth of data from mobile and social media.
ASK THE RIGHT QUESTIONS
The challenge for making the most of all this Big Data is to turn it from a mass of data into real business insight. And in order to gain these insights we need to ask the right questions.
So we need to ask questions around the What, Who and When…….
- What insight can we derive from the information that we’ve captured?
- Who needs to know this information?
- And when do they need to know in order to make a more informed decision?
Getting started on Big Data requires the following steps:
- Define your business objectives and goals
- Know your data – is it clean? Is it up to date?
- Know what data you need to collect and what you want to measure
- And when you start modelling – make sure you use an expert!
- Then deploy and evaluate
Predictive Analytics can help us understand Big Data and is becoming crucial to customer engagement today. Whereas data analysis has typically had an ‘historic’ focus, Predictive Analysis allows us to predict future trends and behaviour patterns and identify where our best opportunities for customer engagement are going to be in the future.
Big Data and Predictive Analytic can play an important role in helping us to Right Touch our customers. Right Touching is all about touching people in the right way, at the right time, with the right content, on the right channel. But in order to get this right, you have to know your audience.
So how do you make sure you are right touching? Some key questions to think about are:
- Where are your customers online?
- What devices do they use?
- When do they use these devices?
- What do they do online?
- And what do they want from you online?
For example, the Financial Times has looked into what devices its customers prefer to use during the course of the day. The tendency is to use mobile in the morning, desktop during the day while at works and tablets in the evening while watching TV. And they adjusted their campaigns accordingly.
LET BIG DATA BE YOUR FRIEND!
We shouldn’t be scared or feel overwhelmed by Big Data. Big Data and Predictive Analytics can help us identify our best engagement opportunities. Through these insights we can then deliver real relevancy to our most valuable customers and further increase their loyalty. But it requires that you ask the right questions to ensure you deliver relevant and meaningful engagements and that you monitor and measure the hard and soft metrics to hone your offering.
This is a guest blog post for SyEngage and is an extract from the speech I gave in Melbourne for the Sitecore Symposium in October 2012.