Why Data-Driven Decision Making Matters
Test and Learn = Finding Improvement Opportunities
Data-driven decision making in business has been drawing a lot of attention recently. McKinsey and IBM are both doing work in this area and a recent study from MIT has shown productivity improvements on the order of 5-6% resulting from adoption of data-driven decision making.
In marketing, there is more data than every before as marketers engage buyers online, track buyers' behavior, and infer buyers' intent. All this generates more data about what works and what doesn't, forming the basis for today's best marketing tool: experimentation.
Data-Driven Marketing = Improved Business Performance
Improved Sales Productivity and Market Share
Survey results showed that leaders in data-driven marketing outstripped others in "significantly or somewhat" increasing sales productivity (time to sale and cost of sales) and market share over a two year period. The leaders shared three characterisitcs:
- Written procedures and clear expectations for collecting and analyzing data.
- A culture that places importance on making decisions based on data and analysis.
- Leading-edge or above average data usage to support marketing activities.
While we found no relationship between leadership in data-driven marketing and either revenue growth or profitability, these may develop in time as marketing data gets used more widely in organizations.
What it Takes to Become Data Savvy
Leadership Plays a Critical Role
We found no magic that catapulted the data savvy to their position of having achieved business impact. They struggle with the same issues as the other companies in our survey...but have been working on them for a longer period of time. As a result, we see leadership as a critical factor enabling organizations to move forward in data-driven marketing. It won't happen without executive sponsorship, clear objectives, and ways of measuring success.
The survey showed that data savvy organizations have had a marketing technology strategy and roadmap in place for a longer period of time than other organizations. More than half the data savvy organizations have had a strategy and roadmap in place for more than a year, compared with only 12 percent of the other marketing organizations. They also have made more progress in addressing data governance issues, one of the top challenges identified by all respondents. In addition, most of them have established a dedicated analytics group.
Why Marketers Invest in Technology
And Why You Must Invest to Remain Competitive
In today's B2B buying environment, marketing cannot be effective in driving demand, building brand, or charting strategies for future growth without technology. While there are hundreds of reasons why marketers should invest in technology, the survey shed light on what marketers report as their primary reasons. The top four reasons marketers reported for investing in technology are to:
- Improve efficiency.
- Make marketing investments based on data rather than purely intuition.
- Hand better quality leads to sales.
- Obtain greater understanding of prospects and customers in order to improve offers, products, and services.
Those who had made substantially more investments in technology for longer periods of time didn't have significantly different reasons. In other words, the leaders haven't moved on to focus on new horizons. They are continuing to invest to improve efficiency, accountability, sales productivity, and customer understanding.
If you are a marketer just beginning to invest in technology, you face a tough game of catch up. There is no time to waste.