Data-driven marketing has delivered demonstrable results in terms of customer loyalty, customer engagement and market growth. Organizations that are “leaders” in data-driven marketing report far higher levels of customer engagement and market growth than their “laggard” counterparts. In fact, leaders are three times more likely than laggards to say they have achieved competitive advantage in customer engagement/loyalty (74% vs. 24%) and almost three times more likely to have increased revenues (55% vs. 20%). This is the key finding from the just-released report from Forbes Insights and Turn, the marketing software and analytics platform, “Data Driven and Digitally Savvy: The Rise of the New Marketing Organization.” The report, based on a global survey of more than 300 executives, finds widespread agreement that data-driven marketing is crucial to success in a hyper-competitive global economy.
“Effective data-driven marketing draws on resources from across the enterprise, not a single department”
Marketers have been employing data in various forms for some time, but a convergence of tools and technologies is now changing the game. Marketers have unprecedented access to individual transaction-level data and can match that with the customer’s exposure to marketing activities and ads.
While many organizations have some form of data-driven marketing in place, strategies are being implemented in piecemeal fashion, within siloed business units, without fully taking advantage of the resources that are available.
“Effective data-driven marketing draws on resources from across the enterprise, not a single department,” says Bruce Rogers, Chief Insights Officer and head of the CMO Practice for Forbes Media. “And without data, marketing is not based on customer intelligence.”
Other key findings:
• Growth and commitment to data-driven marketing are on the rise, with most organizations planning to step up their efforts. However, about half of executives admit their efforts are lagging or are siloed across their enterprises. A majority are now collecting demographic data on customers, but most other data types remain uncaptured.
• Leaders in data-driven marketing are more than six times more likely than laggards to report achieving competitive advantage in increasing profitability (45% vs. 7%) and five times more likely in customer retention (74% vs. 13%).
• The travel industry is a clear leader in achieving competitive advantage through data-driven marketing. Sixty-seven percent of travel executives say they have done so in customer engagement/loyalty, 56% in new customers and 59% in customer satisfaction.
• Retail is another leader here: 55% of retail executives say data-driven marketing has helped them achieve competitive advantage in customer engagement/loyalty, 52% in new customers and 50% in customer satisfaction.
• The energy industry is a laggard here: the respective numbers are 30% in customer engagement/loyalty, 10% in new customers and 10% in customer satisfaction.
• Data-driven marketing doesn’t happen in isolation, or solely within one section of the marketing department. Data-driven marketing is an enterprise-wide effort that requires data, expertise and innovative thinking from many parts of the enterprise. For most of the companies leading in this practice, there is also tight integration between organizations’ overall digital initiatives—adoption of big data, cloud, social and mobile—and marketing campaigns.
• Despite increasing emphasis on data-driven marketing, the majority do not offer training and education to develop data-driven marketing skills. Leaders tend to offer programs and encourage employee development in this area.