Who’s Your Geeky Friend?

The following article appeared in a 2005 edition of CMO Magazine, well before “big data” became the buzzword du jour!

Direct marketers should be dancing in the streets. Why? Because the opportunities for their skills suddenly look limitless.

I’m not talking about creative copy writing, graphic design or understanding of printing production, valuable though these are. I mean their understanding of marketing analytics – how to segment a market based on demographics or behavior, how to test the effectiveness of campaigns, how to maximize the return on marketing investments, how to use modelling, simulation, and analysis. The previously low-status statisticians from the direct marketing department are being brought up, blinking, into the light of the boardroom to explain ANOVA, significance testing and Bayesian estimators to worried senior executives. These executives are worried because over-communicated consumers are becoming resistant to the usual marketing communications, and because there is a new spirit in the boardroom called accountability.

Accountability means having to justify marketing budgets and marketing methods as never before. Forget market share, does the IRR exceed our weighted average cost of capital? Never mind brand awareness, what’s the customer’s lifetime value in current dollars? Corporations have been squeezing inefficiencies out of their supply chain for years – now they are looking at the marketing value chain with a critical eye. Marketers, forced to justify themselves anew, have only one weapon with which to stave off a skeptical CFO at budget review time: meaningful data that they can relate directly to shareholder value.

The good news is that most companies are swimming in data, and the far-sighted ones are actively managing it and seeking more – through loyalty programs, satisfaction surveys, product registrations, list purchases, couponing, web metrics and a myriad of techniques to build and maintain relationships with their customers. The second piece of good news is that the infrastructure to acquire and manage all the data is getting cheaper and more accessible by the month. Data warehouses with terabytes of storage are no longer multi-million dollar investments, and software for modelling, analysis and data visualization is getting more affordable and easy to use.

The missing piece? People who understand marketing, statistical analysis, and the technology needed to bring these together. Direct marketers understand the first two, but if they are to get on top of the technology piece, they will need a friend in the I.T. department. This friend will not only be a guru in database management, OLAP cubes and the paraphenalia of ‘business intelligence’, but will know how to stir web metrics and email marketing into the data stew. The combined skillsets will deliver facts instead of opinions to support better management decisions on products, target customers and marketing campaigns. If they can overcome the stereotypes of Marketing being from Venus while IT is from Mars, direct marketers and technologists can make a partnership that could transform the business.

 

 

Posted by Chris in Blog Posts, Marketing