Big data offers sales and marketing teams the largest new opportunity since the advent of the Internet almost 20 years ago. That’s what three McKinsey & Co. sales and marketing partners claim in a recent blog post.
The potential of leveraging data analysis looms large for many companies to boost sales and extend marketing reach. But the best way to take advantage of opportunities is still confounding many.
“Organizations today face overwhelming amounts of data, organizational complexity, rapidly changing customer behaviors, and increased competitive pressures,” according to the post. “New technologies as well as rapidly proliferating channels and platforms have created a massively complex environment.”
But for the companies that have been able to effectively exploit big data, the returns have been promising.
Companies that use big data and analytics effectively gain productivity rates and profitability that are 5% to 6% higher than their peers, according to McKinsey.
Moreover, McKinsey finds that companies that have put data at the center of their marketing and sales decisions have improved their marketing ROI by 15% to 20%.
According to McKinsey, the companies that use data analysis effectively do three things well:
1. Tap analytics to uncover opportunities to bring value to the company.
“Successful discovery requires building a data advantage by pulling in relevant data sets from both within and outside the company,” the post notes. “Analytics leaders take the time to develop ‘destination thinking,’ which is writing down in simple sentences the business problems they want to solve or questions they want answered. These need to go beyond broad goals such as ‘increase wallet share’ and get down to a level of specificity that is meaningful.”
While many sales organizations typically deploy resources that are based on the current or historical performance of a certain sales region, this new approach requires them to look at problems differently.
“One chemicals company, for example, decided to look at market share within customer industry sections in specific US counties instead of looking at current sales by region, as they’d always done,” according to the post. “The micromarket analysis revealed that although the company had 20 percent of the overall market, it had up to 60 percent in some markets but as little as 10 percent in others, including those with the fastest growing segments.”
2. Understand the customer’s journey to a decision.
Today’s consumer often moves seamlessly between mobile devices and the web, and that means sales organizations need to develop complete profiles of these customers as they traverse the digital landscape so they can successfully craft messages that will appeal to them.
“Our research shows that personalization can deliver five to eight times the ROI on marketing spend and lift sales 10 percent or more,” the authors note. “Becoming ever more effective with this kind of targeting, we believe (and hope), will mean the death of spam.”
3. Process the data . . . and keep learning.
Sales and marketing teams need to embrace an approach that can quickly process a large amount of data through a “self-learning” process to create better interactions with customers.
“These systems can track key words automatically, for example, and make updates every 15 seconds based on changing search terms used, ad costs, or customer behavior,” according to the post. “It can make price changes on the fly across thousands of products based on customer preference, price comparisons, inventory, and predictive analysis.”
In addition, companies need to ensure that data analysis – in the form of simple recommendations – helps front-line employees, from call center workers to sales representatives in the field, the blog advises.
“One cargo airline, for example, developed a complex model that analyzed the frequently changing dynamics of the cargo industry and negotiating strategies based on supply and demand,” according to the authors. “What it delivered to its sales staff, however, was a simple ‘dashboard’ with simple guidelines on flight capacity, corresponding pricing as well as competitor options. The result was a 20 percent boost in share of wallet.”
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