The Value of Analytics in Customer Value by Maria Petrescu * [17]

Source: digitalerra.com

Did you ever wonder what is the value that consumers are getting from your company’s products and services? Your customers are surely analyzing, consciously or not, the value they are receiving when interacting with a business. Organizations who do not try to find answers to these questions are not going to be able to differentiate themselves and offer superior value to customers. But if you are already working on constantly monitoring the value received and perceived by consumers then marketing analytics are a great source of help. 

Customer value analytics assumes the use of data science, technology, statistics and business processes to analyze customer response and perceptions and to understand the buying and consumption context. From this information, managers are able to draw conclusions about the customer experience and formulate strategies for improvement. 

For example, businesses can use marketing analytics to evaluate and monitor customer acquisition, customer needs, and customer profitability, to gain customer insights, and to build relationships. Analytics also help manage and improve customer lifetime value, as well as personalize the value offering for consumers in order to increase loyalty. Marketing analytics can be used in different stages of the customer value management process.

• Customer acquisition - prospective customer behavior, customer needs, lead management
• Customer profitability - sales, registrations, sales discounts use 
• Customer loyalty - loyalty offer use, loyalty card data, online account use 
• Customer engagement - complaint behavior, online interaction, word-of-mouth
  

In the customer acquisition phase, there are various software and analytics platforms that are being employed for lead management (such as Salesforce), to analyze prospective customer behavior offline and online (including Google Analytics), and to assess customer needs through market research. 

In the next stage, after the customer acquisition, analytics can be used to evaluate existing traditional data, including scanner data and the sales database, as well as more modern marketing promotions and analytics insights coming from the interaction with consumers online and through sales promotions. This can also contribute to an increase in customer loyalty and to further consumer insights from loyalty management analytics and digital behavior, including email management, web traffic, and pull marketing (e.g. various platforms such as Hubspot, Hootsuite, ConstantContact).  

Nevertheless, an important part often ignored by marketers in the evaluation and monitoring of customer value is related to customer engagement and especially the feedback offered by buyers on the digital platform. Because of the difficulty and the skills required in the analysis of qualitative data such as consumer complaints, reviews, recommendations, and shares, methods such as sentiment analysis, social network analysis, and quantitative analysis of qualitative data are often overlooked. In this case, simple software options such as Tableau, MAXQDA, MonkeyLearn, and Adobe Analytics can help. No matter which analytical tool is employed, the insights about consumers’ perception of value are essential. 

* Maria Petrescu, Ph.D., is an Associate Professor of Marketing at ICN Business School Artem, Nancy, France and Colorado State University, Global Campus. Her main research areas include marketing analytics and digital marketing. Dr. Petrescu has published articles in journals such as Psychology & Marketing, the Journal of Marketing Management, Public Management Review, Journal of Product and Brand Management, the Journal of Retailing and Consumer Services, and the Journal of Internet Commerce.  She may be reached at Maria.petrescu@csuglobal.edu     

Further Reading

Iacobucci, D., Petrescu, M., Krishen, A., and Bendixen, M. (2019). The state of marketing analytics in research and practice. Journal of Marketing Analytics, 7: 152. https://doi.org/10.1057/s41270-019-00059-2 

Petrescu, M. & Krishen, A.S. (2018). Novel retail technologies and marketing analytics. Journal of Marketing Analytics, 6: 69. https://doi.org/10.1057/s41270-018-0040-z

 

Drive Your Business with Marketing Dashboards [13]

[You can drive your business or be driven out of business.  B.C. Forbes]

                               Reprinted with permission of InetSoft Technology, Piscataway, NJ, www.inetsoft.com

The late Ed Koch, a former New York City mayor, always asked, “How am I doing?” Marketers — as well as government leaders — need to know if their “customers” are happy.

Perhaps you head the marketing operations for your company and want to get a better handle on customer metrics. You heard about the idea of a marketing dashboard at a recent trade association meeting and think that may solve your problem. How should you proceed? What should be on your dashboard? 

Progressing beyond a single item to monitor the effectiveness of business performance, leading organizations often use a set of key metrics called marketing dashboards to understand their key performance indicators.

Just as an automobile dashboard captures critical driving information such as speed, distance, fuel levels, vehicle and engine temperature, navigation and so on, a marketing dashboard summarizes pertinent information on branding, channels, customer contact, promotion, sales performance, service profitability, the web, and customer value. 

Consider the Benefits

Some specific benefits of using dashboards include the following: business intelligence, trend tracking, measuring efficiencies or inefficiencies, real-time updates, visuals (charts, graphs, maps and tables), customized reporting of performance and aligning goals and strategies with results. Major downside considerations include the cost, time and the talent needed to administer marketing dashboards.

The main value of the dashboard framework is that it consists of a multitude of practical information that is current, accessible and easy-to-understand. Dashboards can be designed for top C-level executives as well as the managers working in the trenches.

The above graphic illustrates an example of an executive marketing dashboard. It features the following metrics: revenues and returns, monthly sales trends, 5-year order history, geographic sales (by cities and states), and employee sales performance. 

Decide What to Measure

What should you measure? The spectrum of opinion varies widely from a single metric such as the Net Promoter Score to 50 or more performance indicators. Just as we don’t want to be overwhelmed with our automotive dashboard, keeping the marketing dashboard simple helps measure what matters and aligns with business objectives. That said, here’s a good starting point to consider in choosing 5 to 10 key performance indicators that may include the following measures:

• Financial: revenues, contribution margins, turnover ratios, profitability
• Competitive: market share, share of advertising/promotional budget 
• Consumer behavior: market penetration, customer engagement, customer loyalty
• Consumer intermediate: brand recognition, customer satisfaction, purchase intention
• Channel: distribution level, intermediary profits, service quality
• Innovativeness: new products launched, the percentage of annual revenue from new products
• Customer value: process metrics, customer retention, customer lifetime value (CLV), RFM (Recency, Frequency, Monetary value) 

Realize that doing business today requires a new level of accountability for performance. Superior customer value means knowing customers’ behaviors and buying patterns.

Metrics are an important part of the strategic marketing process to understand: (1) How successful the organization is now; (2) What it needs to accomplish to become even more successful in the years ahead.

Smart marketing managers will embrace this challenge and use metrics as a planning tool to improve business strategies. How about you?

This blog post is the 8th in a series extracted from Superior Customer Value – Finding and Keeping Customers in the Now Economy, 4^th Ed. (2019, Routledge Publishing/ Taylor & Francis). For further information contact Art Weinstein at artweinstein9@gmail.com, 954-309-0901, www.artweinstein.com