Half the money I spend on advertising is wasted, and the problem is I do not know which half.
Lord Leverhulme, 1851-1925, founder of Unilever and philanthropist
It is estimated that the world spends an eye-watering 1.2 trillion dollars a year on advertising and marketing. Marketing budgets absorb as much as 20 percent of all revenues and a lot of this is technically unaccounted for. It might explain why they’re among the first to be slashed in times of recession.
In the new climate of austerity and accountability, CEOs, CFOs and shareholders are demanding greater transparency and proven ROI from their marketing investments. Therefore marketers must be able quantifiably to justify their budgets rather than relying on traditional smoke and mirrors.
To achieve this effectively they must be able to gather, analyse and exploit information from their company’s client base. This would include data on customers’ existing and future needs, their decision making processes, behaviour and trends. This information is then balanced against data based on market competition, the state of the industry, and general economic, technological and cultural trends.
So what are the issues?
In a recent Business Week Research Services study, 55 percent of C-level executives surveyed said marketing plays a vital role in achieving their strategic goals, yet fewer than half were happy with their company’s ability to increase revenue from new and existing customers. And just 43% said they were satisfied with customer loyalty and retention. It all points to the fact that businesses must be less product-centric and depend more on insight, because customer knowledge enhances the value of product knowledge.
The emergence of digital media has given businesses access to a rich source of previously unavailable customer data, and with it the potential for deeper customer insights and smarter decision making. Forward thinking marketers are seizing on digital media to have interactive dialogues with their clients.
Such collaboration can give us an accurate measurement of marketing performance and lead to keener insights about sources of value, future customer behaviour and the real impact of marketing costs.
The ability to analyse and predict customer behaviour allows managers at all levels to make smarter decisions. With the right expertise, marketers are now able to more accurately:
- Manage client data
- Predict customer behaviour
- Profile and segment customers
- Quantify the lifetime value of a customer
- Manage and optimise marketing strategy
- Engage high-potential clients
- Continuously improve marketing performance
- Measure and report results
- Optimise marketing investment
Data integration created at the customer level from diverse sources provides insights that result in consistently better performance. Predictive analytics also allow businesses to become more customer-centric by understanding and responding to customer needs on an individual basis.
Data is processed based on descriptive and predictive analytics – descriptive to clarify performance results and understand the present value of the customer base; predictive to understand preferences, tendencies and potential.
Customer-centric businesses use analytics to predict customers’ needs and respond proactively. This allows them to identify previously unseen trends in customer data and enables greatly improved forecasting.
How GIROUX can help
Failure to respond to changes which may affect your decision making can result in erratic and unpredictable performance. Improve the relevance of your business intelligence insights by optimising your data architecture.
To find out more or to discuss your needs in detail, contact us +44 20 3287 7620