7 minutes reading time (1493 words)

Charting Growth Paths in Unchartered Waters: Building the Analytic Foundation

Milky-Way2

Right now, businesses large and small need to re-imagine, re-define, and execute marketing plans against an ever-evolving consumer marketplace.  Marketers are simultaneously navigating the immediate rapids in front of them while also planning for future unknown currents.  The rise of digital shopping, promotion sensitivity and fewer purchases, and meeting new consumer needs as mobile work became the norm have required fast pivots and extraordinary flexibility, upending traditional marketing approaches.  This is no small task.


The current landscape makes the balancing act between immediate and long term priorities harder, and exposes weakness sooner and more easily. Those that have a solid foundation with strong coordinated teams can approach challenges creatively, move nimbly, and have the best chance of success.


A key component that enables businesses to make smart, nimble decision is a clear, intentional data and analytics culture.  We at Big Chalk Analytics believe the foundation to building this culture are the same both in good and challenging times. Namely: 


1. Rethink how you teach and instill marketing knowledge and capabilities, short and long term


While it's an oft-repeated cliché, companies need to establish a learning culture. It's not enough to teach the tool or technology de jour, they need to instill formal processes for marketing sensing so that they continually identify and integrate new approaches, tools, etc. into their training protocols. Too often companies rely on a static approach to training and marketing content.


In the future, progressive companies will not look at the elements of "marketing knowledge investment" as mutually exclusive. Instead, they will combine and co-mingle them to create customized capability development programs for their workforce (broadly defined). For example, a portion of their marketing research and intelligence budget will be devoted to developing proprietary knowledge about how to do marketing for their categories and brands. And marketing training and/or marketing consulting services can be then leveraged to instill those principles and practices into their workforces.


This training should extend beyond marketing and analytics professionals.  The more companies can train and empower key members of their core business teams (e.g., management, finance, product development, etc.) the more the entire team will be aligned and moving in the same direction. This could also extend to key external partners, such as agencies, media companies, data providers, analytic suppliers, etc.


2.  Establish formal programs for evaluating marketing analytics


It is unusual that, while many companies have formal programs for evaluating and grading their marketing partners and agencies, they lack similar protocol for their marketing investments and marketing analytics.  It is especially surprising when one considers the many reports and case studies demonstrating the significant benefits of marketing analytics when properly deployed.  Without formal evaluation programs in place, marketers will continue to struggle to integrate and leverage new forms of marketing. Not only would such analytic efforts pay for themselves many times over, but without them, companies are throwing money away.


An Analytics Evaluation Program would start by assessing the impact of the analytics. This exercise would include at least two dimensions.


First, are marketing analytics informing and influencing actual decisions?  Analytics currently impacts less than a third of decisions – a number that has been decreasing over the past 5 years, the supposed heyday of big data and predictive analytics.  Any evaluation efforts would start by understanding the percent of marketing decisions that analytics were influencing as well as the nature of those decisions (what types of decisions, when not used – why not?, etc.)


Second, are those analytics (and the decisions they drive) having a significant impact on brand objectives and consumers along the consumer journey? The nature of the metrics impacted could vary widely depending on brand objectives and circumstances. A potential list of key outcomes could include any and/or all the following:


  • Exposure (e.g., reach, frequency, level of engagement, etc.)
  • Communications (e.g., ad recall, ad awareness, branded awareness, etc.)
  • Effectiveness (e.g., incremental lift, ROI, penetration/trial, effective repeat, basket size, price elasticity, etc.)
  • Brand perceptions (e.g., awareness, salience, equity, attributes, emotions, motivations, etc.)


A comprehensive program should be able to demonstrate and quantify the value of marketing analytics recommendations of those key metrics and how they improved pre- and post-recommendations.


After understanding the impact, the next step is to diagnose the various organizational and process elements that support a successful marketing analytics program.  A preliminary view of what elements should be examined include:


Cadence:  

  • Are analytics updated frequently? Are they delivered in time to answer ongoing business questions? Are they conducted frequently enough to stay current?


Analytic Talent and Culture:

  • How sophisticated is the analytic team? Does it include both data and modeling experts? Does it have a blend of analytics and business skills?
  • Beyond analytic team, how up-to-speed are marketing people with analytic outputs? Are they able to interpret and leverage them in their programs?
  • Does management expect them to provide analytic rationale for their recommendations? Are promotions contingent on analytic familiarity or expertise?
  • Are business partners (e.g., finance, product development, external agencies) similarly integrated into the process?



Methodological expertise

  • How does the team keep abreast of on-going data and methodological innovation?
  • Do you have a standard set of methodological requirements for key methodologies?



Integration with business processes

  • Are business processes and inputs constructed with analytics in mind?
  • Does timing of analytic projects/work coincide and complement business planning processes?



Communication protocols

  • How does your team optimize the delivery of findings and recommendations to marketers?
  • Is story-telling an expected part of the process?
  • How well-versed is the analytic team in data visualization?



Capability development and training

  • Do you have formal programs around analytics? Both specialized for analytic teams and more general/actionable for broader teams?



Success tracking

  • Do you track the value of analytic recommendations? Do you track the value of analytics implemented?
  • Do you build case studies to help with training and help bring analytic practices to life?


Companies that employ regular analytics evaluation and optimization can expect to achieve significant benefits, from both short-term recommendations and value capture to longer-term creation of an analytic culture.


3. Embrace a more aggressive and disciplined mindset to campaign and execution development


Traditionally, marketing interactions and communications have centered around a core idea designed to appeal to a broad swath of a brand's current and potential audience.  These ideas were carefully crafted and nurtured and then thoughtfully "rolled out" across a variety of channels, often in limited versions of the idea, and would run for relatively lengthy periods of time.


The newly available channels and tools make this approach obsolete. Marketers are increasingly capable of creating individually-tailored messages, distributing multiple versions cost-effectively, measuring the effectiveness of different alternatives and adjusting both messaging and media plans in real-time to optimize performance.


To succeed today, marketers must learn to be comfortable with discomfort.


They need to acknowledge that they can't predict which ideas and executions (and channels) will resonate before launch, instead they need to get into marketplace nimbly and see how consumers interact with their messages and offers.Marketers in this new environment need to be both aggressive and disciplined. They need to be aggressive (and creative) in how they create products, communications and experiences with their consumers or customers. And they need to be disciplined in how they structure experiments across a range of factors and measuring and optimizing results in real-time.


4. The future of marketing will likely involve new operational models and partners, characterized by different working relationships with those partners


The traditional operational model was relatively bifurcated. Company employees wrote briefs outlining marketing objectives, set budgets and investment levels, and managed agencies who executed most of the work. The agencies developed the campaign idea, created the various executions of that idea across channels and then planned and executed the media against those plans.


Responsibility for measurement and optimization has always been somewhat ambiguous, when done at all. Sometimes, analytic companies would do the measurement, sometimes it was done internally, and sometimes agencies assumed responsibility.


As both the economy and marketing landscape changes significantly, companies will want to explore alternate working models. Talent is the driver of success in the evolving economy, and matching the right talent with the business need is crucial. That talent may not look like the traditional model, with all marketing and analytics work managed in-house with full time employees.  Dynamic work engagements, combining full time, part time, and contract/on demand support is becoming more common, particularly in today's environment.


Properly executed, leveraging this new environment can be a significant source of competitive advantage for companies. Companies can enjoy many benefits from these new working arrangements: they will have access to talent they might not ordinarily attract, they can make fixed costs variable, they can better plan and staff around peak periods (e.g., annual planning periods), etc.


Summary


Current market dynamics and technological innovation are quickly changing both the tools that marketers rely on and the traditional rules of marketing.  In the face of these changes, marketers are increasingly called up to navigate unchartered waters.   Just as marketers are changing their tools, they also need to rethink how they approach marketing broadly: their internal processes, their capability development and training efforts, their partnerships and how they evaluate and optimize all those components working in conjunction.  Winners in the future will be the ones who master both the aggressiveness and discipline necessary to navigate these changes. 

Big Chalk Analytics Powering Merge Clients
 

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Wednesday, 25 November 2020
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