Customer Analytics: A Must-Have for the Business of Marketing
“It boggled my mind.”
This was the reaction of Jeff Winsper, Black Ink ROI president, when he first saw results from his company’s C-level 2016 Marketing Study. What didn’t surprise him about the research: CEOs continue to press marketing leaders for bottom-line business results. The real eyebrow-raiser for Winsper: Marketers stop short of taking accountability to help drive business revenue/profit. Instead, the line in the sand is drawn at just driving demand without thoroughly understanding the business implications.
“This year, marketers are doubling down on what they already do well,” says Winsper, whose firm provides customer ROI analytical solutions for P&L leaders. “They’re focused on doing more of the same (and hopefully doing it better). But in the meantime, they’re largely ignoring the need to start doing what is necessary – namely, aligning to the KPIs set forth by executives.”Source: C-level 2016 Marketing Study, Black Ink ROI
Brand and customer management crown the top of marketers’ 2016 priorities because, Winsper observes, promotional activities are what they’re most confident doing. They’re far less comfortable delivering ROI reports to the C-suite because these require a firm grasp of what Winsper calls “the business of marketing.”
“The business of marketing” is just what it sounds like: running marketing like a business – of which promotion is only one part.
“The parallels between running a business and leading marketing are pretty obvious. When you think about it, marketing touches all of the core elements of trade,” says Winsper, an executive with more than 20 years of leadership experience in marketing. “Marketing technology is like a supply chain, and customer intelligence is similar to product R&D.”
Perhaps the most telling sign that CMOs aren’t thinking from a business-first perspective is that they lack a close partnership with their CFOs. While CFOs have recently reported a growing collaboration with the CMO, significant relationship barriers remain, including separate agendas on measurement methodologies. According to EY, just 13% of CFOs say finance and marketing are completely aligned on metrics.
One way to strengthen the CMO-CFO bond, Winsper says, would be to improve marketers’ access to advanced analytics – a move that would also greatly benefit the finance office via a systematic examination of buyer information to identify, attract and retain the most profitable customers.
“Customers are the ones who open up their wallets or cut purchase orders, so having insight into them [via analytics] helps CFOs make financial projections. We see this in the consumer packaged goods (CPG) industry,” he says. “In companies like MillerCoors, the finance group doesn’t complete its planning until marketing does. They both work in pairs.”
Typically, CFOs use historical trends to project future outcomes. Basically, sales quotas are set in the same way. Winsper points out that this historical model can easily fall out of step with here-and-now, advanced customer analytics.
“Sales leaders can say annual sales will increase by five percent, but how do they come up with this number? Usually, it’s a mix of aggregated sales plans, with a bit of anecdotal evidence thrown in,” Winsper says.
CFOs and CMOs are at a similar disadvantage. If they’re disconnected from customer analytics, it’s easy to over index market share when making their projections. For marketers in particular, it can also result in unwise decisions regarding segmentation and targeted activities.
“It’s like going on a road trip, using a roadmap without coordinates or topographic symbols for rivers, mountains and roadblocks.”
The buyer’s journey – and the road to revenue – isn’t easy to navigate. Why would marketers set out without demanding access to customer and financial analytics?
Indeed, it boggles the mind.