ANALYSIS

CMOs, Analytics and the Great Revenue Chase

As companies head out into the brave new post-recession world, the top two goals for marketers are organic revenue growth (37 percent) and margin growth (41 percent), according to Aberdeen’s Q4 2010 Business Review. To help achieve these objectives, marketing budgets grew by an average of 4 percent for 2011, chief marketing officers reported. The crucial question, then, is this: How do CMOs invest that marketing budget wisely to maximize gains?

Aberdeen is currently conducting a research study that will uncover the strategies, actions, technologies and services that Best-in-Class marketing organizations are using to drive sales performance and optimize their marketing efforts. Findings from this upcoming research, scheduled for publishing in Sept. 2011, will indicate how top performing organizations are able to achieve their sales objectives and optimize the use of their marketing budget.

This research will examine the business intelligence tools and techniques that top-performing marketing teams use to drive effective programs and deliver results. Aberdeen will analyze how program plans integrate customer and prospect information during the planning stages, continue with predictive modeling that drives effective offers and content delivery based on activity and response, and conclude with measuring campaign results to deliver success replication to the marketing efforts.

Data-Rich, Insight-Poor

Marketing success depends on insight into, and intelligence regarding, one’s target audience. Aberdeen’s research has found, however, that fewer than half of Best-in-Class marketing organizations employ lead management dashboards and campaign management tools (Sales and Marketing Alignment: Collaboration + Cooperation = Peak Performance).

Yet Aberdeen research into the use of business intelligence dashboards from Nov. 2010 (Operational Dashboards Drive Profits and Customer Retention) has found that organizations that use dashboards more widely throughout the company enjoy both higher operating profit margins and higher customer retention rates.

As the volume of customer-related data (transactional, behavioral and unstructured) continues to grow, marketing organizations are in danger of becoming increasingly data-rich but insight-poor. Heading into this research study, Aberdeen’s theory is that marketing organizations that are data-driven and use analytics to provide timely insight into the success of their marketing strategies and tactics will outperform those marketing departments that do not.

For example, Aberdeen’s research in April 2011 (Optimizing The Marketing-to-Sales Lead Lifecycle) found that top performing companies (“Best-in-Class”) were focused more strategically on the bottom half of the sales funnel compared to other firms. That is, they were intent on driving marketing activity and flow form the middle of the sales funnel through to sales cycle conversion.

This strategic emphasis is reflected in the marketing tactics exhibited by these enterprises. Fifty-two percent of the Best-in-Class companies have the ability to nurture leads for development based on prior marketing activity, purchasing history or response triggers. Likewise, 51 percent of Best-in-Class companies use versioned, customized marketing messages based on title, role and function. Without a strong analytics capability to glean insights from prior marketing activities, it is very difficult to execute these tactics effectively or efficiently.

Analysis Drives Revenue

In summary then, the key benefits of leveraging customer behavioral information include the opportunities to

  • gain insight into the effectiveness of specific marketing campaigns and channels;
  • establish formal, organization-wide marketing strategies and plans;
  • align marketing activities with specific sales objectives and goals; and
  • improve the targeting of marketing offers to optimize marketing return on investment (ROI).

Aberdeen’s hypothesis is that top performing companies (“Best-in-Class”) more frequently track and analyze all aspects of their marketing activities in order to drive improvements in sales and marketing performance and grow overall revenue.

Peter Ostrow is research director for sales effectiveness at the Aberdeen Group. David White is a senior research analyst in Aberdeen's business intelligence practice. To participate in this research and receive a free complimentary copy of the resulting report upon publishing, take a 15-minute survey by clicking on the following link: Analytics for the CMO: How Best-in-Class Marketers Use Customer Insights to Drive More Revenue.

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