MKTG 3653 Exam 1

Major Challenges when you're locked in a silo

1. Data does not exist 2.data is locked in silos 3. data is tough to analyze 4.you don't trust the data 5.you can't make the predictive leap

What are the steps of marketing analytics?

1. Identify the right METRICS 2. Figure out how to collect the DATA 3. TRACK the metrics over time 4. ANALYZE the results to gain insights. 5. Take IMPROVEMENT actions. 6. REPEAT the process

The outputs of marketing analytics?

1. Insights 2. DECISIONS 3. Credibility 4. INFLUENCE

Marketing has some historic problems:

1. Measuring effectiveness 2. Providing accountability& proving contribution 3. Earning credibility

What are the inputs of marketing analytics?

1: Goals and objectives Who determines theses? THE COMPANY 2: DATA!

Marketing Plan

A formal, written document that directs a company's activities for a specific period of time.

Track the metrics over time: Single measurement and its value

A single measurement in time is of some value: - August 2019 Customer Satisfaction rating: 3.47 Scale: 1 = Very dissatisfied; 3 = Neutral; 5 = Very satisfied What can we learn from this measurement? Relative to what it was, we need more info. The greatest value from tracking metrics comes from collecting data at regular Intervals. We need to analyze trends to determine the direction of performance: - Improving/increasing? - Remaining flat? - Deteriorating/decreasing?

Marketing Problem 2

Accountability and Contribution Marketing often doesn't have good (or any) answers to tough questions!

Different types of metrics ranking.

Activity, Output, Operational = Easiest to track, low value, start here, don't stay here Outcome, leading indicators, predictive = Hardest to track, high value, get here, stay here, be patient

The Real Deal

Analytics process metrics linked to REVENUE. Data SAVY Marketing leadership is DATA INFORMED Determining marketing's success is OBJECTIVE Marketing is STRATEGIC Analytics function as guardrails. Funding based on a BUSINESS CASE Marketing viewed as a REVENUE center. "Tracking marketing is a CULTURAL thing. Either tracking matters or it doesn't. You're in one camp or the other. Either you're analytical and data-driven, or you go by what you think works. People who go by GUT are wrong."

Pseudo- Analytics

Analytics process uses "vanity" metrics. Data AWARE Marketing leadership still primarily instinctive. Determining marketing's success is mostly subjective. Marketing is OPERATIONAL Analytics functions as a SMOKESCREEN Funding rollercoaster. Marketing still viewed as an expense. "Marketers using pseudo-analytics are on a SLIPPERY slope along with those using no analytics. When numbers-oriented executives cast a critical eye on marketing efforts, marketing managers are hard-pressed to come up with answers that explain their VALUE or show how they CONTRIBUTE to financial results."

How to become an analytically-driven organization

Becoming an analytically driven organization isn't only about having the right METRICS, methodologies, or technologies in place...fundamental SHIFTS are required in the marketing organization itself: specifically, changes in the marketing SET, marketing structure, marketing talent, and marketing LEADERSHIP.

Marketing Problem 3

Credibility CEO's don't trust marketing The answer is data

Culture regarding marketing analytics

Culture is a huge factor It's almost never benign. It either helps the analytics process gain acceptance, or it serves as a barrier to it. Culture does one of two things: generates lift, or creates drag.

Identify the right metrics: Measuring Efficiency

Doing things right creates a competitive advantage. Ever heard of the "FIRST MOVER " advantage? Marketing needs to be efficient at its work. - Business is war! - "FAIL fast" - what does this mean? - Use its LIMITED resources wisely - ALIGN its initiatives with leadership's goals - Agility A marketing analytics process should include marketing efficiency metrics. These metrics measure how well marketing got things done. - For example: the number of ads, promotions, campaigns, brochures, events or social media posts were completed - These metrics indicate how busy the marketing team is, but not what impact its work is having. They are typically the EASIEST metrics to track.

Identify the right metrics: What are the business goals?

Identifying valid metrics for the marketing analytics process must begin with understanding the GOALS of the business! The metaphor: - Corporate vision: DESTINATION - Map to get there: STRATEGY / PLAN - Dashboard: ANALYTICS

Internal Benchmarks

Internal Benchmarks establish levels of current performance of a particular tasks, such as cost per hire.

Track the metrics over time: What's the right measurement cycle?

It depends. For any given business CYCLE, what are the relevant PERIODS and how many should you track? METRIC - Customer satisfaction? - Revenue? - Customer Lifetime Value? - Responsiveness? MEASUREMENT CYCLE (less or more frequently?)

Marketing Problem 1

Knowing if the marketing plan works

What is the reason why data wouldn't exist?

Lack of Attribution So much of the data marketers want is about customers: how they buy, why they buy, what influences their purchase decision, etc.

external benchmarking

Looking outside the company to examine what excellent performers inside and outside the company's industry are doing in the way of quality.

Strategic readiness

Making the business case Doable

Recap of Lecture 2 Marketing Analytics Process

Marketing analytics is a PROCESS 1. Identify the right METRICS -Many types of metrics - activity, outcome, etc. - choose the right ones 2. Track them overTIME - Distinguish between incidents and trends 3. Analyze the data to identify improvement ACTIONS - Start the analysis process with the question: "What decision are we trying to make?" - Keep in mind the law of diminishing returns 4. REPEAT the process

Use the analytic data to improve & Repeat these steps on a regular basis: STEP 4 Repeat the process

Marketing analytics is a continuous, iterative process. 1. Ongoing data collection and analysis 2. Regular improvement actions Just analyzing the data one time, drawing a few conclusions that lead to some changes, is of LIMITED value. The process should occur on a regular cycle, yielding improvements at every iteration, helping marketing CONSTANTLY improve.

Identify the right metrics: What is a vanity metric?

Metrics that make the marketing department look BUSY, but don't PROVE how marketing's efforts are MOVING the revenue needle (or achieving some other important, business result). Vanity metrics test: what business DECISION can the metric help us make? None? It's probably a vanity metric. "Vanity metrics: good for feeling awesome, bad for action." - Facebook fans - Twitter followers - Email OPEN rates - Page views - Marketing SPEND Don't waste time, effort, and resources tracking vanity metrics.

Flying Bind

No ANALYTICS process. Data IGNORANT Marketing leadership is INSTINCTIVE Determining marketing's success is completely SUBJECTIVE. Marketing is response-driven, reactive. Marketing benefits from/is victimized by internal politics. Funding rollercoaster. Marketing viewed as an expense. "A marketing organization that relies on political CAPITAL to execute its program rather than analytics ends up saying 'yes' to requests that have dubious merit. Then, when such efforts fail, marketing gets the BLAME, hastening the day that marketing executives are shown the door."

Use the analytic data to improve & Repeat these steps on a regular basis: STEP 3 Determine & make improvements

No value can come from a marketing analytics process unless you ACT on what you learn. - IMPROVE performance of marketing campaigns & channels - ADJUST strategies & tactics - OPTIMIZE processes The insights you gain from the analysis is what enables you to do these things.

Identify the right metrics: Probability metrics & Service Quality metrics

PROBABILIT Y METRICS What are some MEANINGFUL metrics a marketing analytics process could track related to the organizational goal of profitability? - Customer SATISFACTION - Customer RETENTION - Customer AQUISISTION Leads generated, Close rate, Cost per Acquisition (CPA), Customer Lifetime Value (CLV) SERVICE QUALITY METRICS What are some MEANINGFUL metrics a marketing analytics process could track related to service quality? - Customer satisfaction - Net Promoter Score (NPS) - CHURN: Ratio of people coming vs. leaving - Responsiveness - Brand SENTIMENT

Customer Relationship Management and Marketing Automation

Sales force or an online database where you can store everything

Tools and technology in marketing analytics

Shortage of tools and technology is not the issue, it's the willing to use them and choosing the best one.

Marketing analytics vs. research

Similar in nature BUT Marketing research focuses more on PRIMARY data gathered through experiments, surveys, and observations. The data sets are usually SMALLER. Marketing analytics relies mostly on SECONDARY data, from transactions/events. The data sets are usually LARGER, and machine learning/AI is making inroads into analyzing data for marketing analytics.

How organizations decide to try analytics

Some realize it's just the RIGHT thing to do. - Like healthy lifestyle choices, some recognize that it's the SMART thing to do. - These people (and companies), however, are in the MINORITY. Other firms have VISIONARY leaders that see how leveraging analytics and data will help the company achieve it's preferred FUTURE. - These leaders help their teams catch the vision for what is possible using analytics as a means to a very important end. - These firms are also in the MINORITY. Often, a CRISIS precipitates radical change in an organization, forcing them to adopt change it wouldn't ORDINARILY embrace. - The EXISTENCE of the company is often at stake. - Analytics - and other strategies - are looked upon to RESUCE the firm. - This is probably the MAIN driver of analytics adoption.

Benchmarks

Standards

Know Dorit Nevo's four types of readiness, what they each consist of and how they are different

Strategic readiness Domain readiness Cultural readiness Operational readiness

Marketing Automation

Technology that manages marketing process and multifunctional campaigns multiple channels automatically

Identify the right metrics: How do you identify valid metrics?

The purpose of business is to create a customer... Identifying valid metrics will involve: Focusing on OBJECTIVES Measuring efficiency Measuring effectiveness

Be comfortable with the logistics of the movie Moneyball, think of why Jerry showed it in class and what the movie was trying to represent/get across regarding Marketing Analytics

The reason Beane's strategy was ground-breaking is because he "had the courage to use the insight gleaned from data analytics to drive the way he ran his business... 'Moneyball' succeeded for the Oakland A's not because of data analytics but because of Beane, the leader who understood the analytics' potential and changed the organization so it could deliver on that potential." His story should resonate with data scientists. It speaks to the advantage of making data science part of an organization's DNA, but just as importantly, it highlights how a big idea about big data can translate to serious business gains.

Output metrics

These metrics count the output of things that marketing has done. Examples: - Click-through rates on digital ads - Website visitors. Output metrics might RELATE to key outcomes, or they might not. They are SOMETIMES good indicators of marketing's impact, but not always.

Activity metrics

These metrics measure EFFORT. Examples include: - Number of tweets sent - Volume of mailers sent - Blog articles written. Activity metrics show how busy marketing has been, but not the impact of that busy-ness. Metrics in this category are often "VANITY" metrics because marketing may use them to show how busy it is.

Operational metrics

These metrics measure the EFFICIENCY of the marketing team. Examples: - Marketing spend per EMPLOYEE - Number of leads generated per sales representative It is important for marketing to use operational metrics, but by themselves, they are INADEQUATE for showing marketing's full impact.

Predictive metrics

These metrics point to EXPECTED outcomes. Examples: - Propensity to PURCHASE: uses AI to look at all customer interactions & behaviors to predict which customers are most likely to buy, and when. - Likelihood to DEFECT. Predictive analytics have emerged recently. The systems to track them are sophisticated. These are powerful metrics that help marketing FORECAST sales and also focus attention on the customers who are most likely to BUY

Leading indicators metrics

These metrics show the LIKELIHOOD of outcomes that are important to the business. Examples: - Customer share-of-WALLET - Market growth RATE When these metrics show improvement, they serve as reliable PREDICTORS of future, successful outcomes. What kind of outcomes? Usually SALES, revenue and profit.

Outcome metrics

These metrics show the end impact of marketing's work. Examples: - Market SHARE: % of target market you control - Customer lifetime value - Revenue pipeline contribution Outcome metrics provide GOOD indicators of marketing's impact. They are harder to track, because they require DATA from several sources, such as marketing systems, sales data or accounting data.

How do you enter into the Marketing Analytics Process and what does that entail?

Turns marketing's data into actionable insights. Data = not actionable Information = Actionable

Who are the people of marketing analytics?

Who are the STEAK-HOLDERS and beneficiaries of the marketing analytics department? - The marketing team: CMO & marketing staff - The SALES team - The executive team - All employees - The CUSTOMERS - The shareholders

Culture as a catalyst

Work on what's IMPORTANT LEARN from mistakes Trust DATA TRANSPARENT environment What happens in this kind of culture when someone makes a mistake? What kind of behavior does that encourage?

Culture regarding barriers

Work on what's URGENT PUNISH mistakes Trust INTUITION POLITICAL environment

What's a business process?

a sequence of REPEATABLE steps that CONSISTENTLY produces a DESIRED outcome. Analytics process components include: -People - Inputs - Steps - Tools & technology - Outputs

Structured and Unstructured

a spreadsheet vs. a bunch of data that you don't know how to deal with

collectivity

ability to collect the needed data from the places it exists at speed and in the proper format

segmentation

ability to group customers into meaningful segments to enable sending relevant messages to them at scale

identify resolution

ability to identify a given prospect/customer accurately, across devices and journey stages

Cultural readiness

data-driven decision making Very hard

primary data

information collected for the specific purpose at hand

secondary data

information that already exists somewhere, having been collected for another purpose

Formal definition of marketing analytics

it is a PROCESS for measuring and analyzing marketing data to better MANAGE marketing performance and MAXIMIZE the return on the investment that a company makes in marketing.

Control

manage usage, privacy, security, and quality continuously

Metrics

measurements or "scorecards" that marketers use to identify the effectiveness of different strategies or tactics

Omni-channel

multiple channels to reach people

incorrect data

often customer related [email protected]

Operational readiness

planning for analytics Hard

analog channel

print

ROI

return on investment

Domain readiness

skills, tools, and data Relatively easy

channel

the means by which a message is communicated

data transformation and the three steps

the process of converting a source data into valid, clean data usable for analytics (Cleaning, Structuring, Integrating)