Chief marketers today know merely dipping a toe into the data technology pool is no longer sufficient. But in a digital era where it’s clear analytics are key, why are so few marketers taking the plunge?
Research shows that at least they’re trying. Although Gartner’s 2015 CMO Report reveals 82 percent of CMOs feel underprepared to deal with the data explosion, global market intelligence firm IDC predicts the CMO will drive more than $32 billion in marketing technology by 2018.
Still, with billions backing ad-hoc marketing analytics campaigns, McKinsey & Company says there are billions more on the table for grabs. After eight years of researching more than 400 diverse organizations, analysts at McKinsey found that an integrated analytics approach can free anywhere between 15 and 20 percent of marketing spending.
“Worldwide, that equates to as much as $200 billion that can be reinvested by companies or drop straight to the bottom line,” researchers wrote in a June 2014 article.
Clearly, analytics and customer lifecycle management processes must be weaved into everything the CMO does. But just like having an analytics solution doesn’t make you a data scientist, as BeyondCore CEO Arijit Sengupta noted to VB in November, simply having customer data doesn’t make your analytics correct.
The multi-million dollar question is moving from “do we need analytics?” to “are the analytics even accurate?”
“With companies using as many as 100 products to aid their sales and marketing efforts, it suggests that many employees are not only bringing their own devices to work (BYOD), but are also bringing their own marketing processes (BYOP) and toolsets (BYOT) when they join a company,” VB analyst Stewart Rogers wrote in the 2014 State of Marketing report. “This, in itself, creates serious worry for the future accuracy and cleanliness of a company’s central record of customer data, not to mention a lack of documented and compatible processes right across the entire organization.”
CMOs are now at a crossroads between data quality and data results. It’s no longer enough to dabble in analytics and come out with the richness required for informed decision-making. The business needs integrated systems across IT infrastructure, and marketers — not IT pros — must champion the call for improved data controls and governance as their cause.
As corporate data grows 40 percent annually over the next decade, marketers need to get a handle on their data quality. It’s estimated anywhere between 10 and 25 percent of B2B marketing databases have errors and are “dirty.” Combine that with the latest figures from Sirius Decisions, estimating companies spend $100 per inaccurate data record on things like poor lead generation and sending direct-mail marketing to the wrong addresses.
Now imagine your marketing database houses 100,000 records, and 20 percent of those contain errors. Multiplying $100 by 20,000 reveals your organization throws away about $2 million annually in marketing dollars because of poor data quality.
Year-over-year at a 40 percent annual growth rate will likely make any CFO clutch his calculator. However, this creates the perfect way to start the conversation about improving the data management systems.
It may be only a dialogue at first, but it’s an essential conversation as plans take shape for the next one, two, or even five years. If this is your legacy, then it’ll be a good one, changing the way marketing influences the business bottom line and interacts across functional silos to see transformative results.
Whether it is via cross-selling, churn management, or targeting the most profitable customers, data has the power to grow consumer loyalty in the “age of the customer.” By embracing the right tools to lead this charge, you’re giving your company a strong advantage while investing in the future of an evolving marketing profession — one that requires both a new skillset and a new mentality.
Manji Matharu is the president of analytics at Infogix, a data integrity, controls, and analytics organization. Matharu was formerly the CEO of Agilis International before its acquisition by Infogix.