Convert Marketing Investment into Revenue and Growth: 5 Trends to Watch
Converting a company’s investment in digital marketing into profitable growth requires a focus on the most current trends in digital and an understanding of best practices. Here, Paul Gulbin, managing director of CohnReznick Advisory’s Digital and Innovation Services group, highlights five of the latest trends that executives must heed in order to translate marketing investment into revenue growth:
- Less Predictive, More Explanatory Analytics – A 2015 Gartner survey found that 46% of marketers will spend less on predictive analytics and more on explanatory analytics – that is, analytics driven by curiosity and intuition, rather than pure machine output. Why the heavy lean toward intuitive-based analytics? The most successful chief marketing officers are able to enter a board meeting armed with the knowledge of why a particular quarter was or was not successful. This is much more insightful than simply presenting raw data that provides little understanding of how to maintain achieved success, or conversely, how to course-correct a strategy that has achieved less than desirable results. A CMO who is able to tell the board why quarterly results were mixed and what to do about it next quarter – backed by data correlations tying to key performance indicators (KPIs), which are of importance to the board – facilitates a much more productive meeting and significantly enhances opportunity for future revenue growth.
- Social Listening Must Show Revenue Correlations – Marketers should be attuned to analyzing data correlations – not just data coincidences. Take for example if the volume of tweets related to a brand increased in December after an ad purchase during Monday night football. While this may have coincided with a jump in revenue, the revenue spike may be just that – purely coincidental. During the holiday season, companies worldwide experience a jump in buzz and earnings. It could also be attributed to a particularly strong economic year. So how can the real impact of an ad buy be assessed? Savvy CFOs ask pointed questions around how marketing analytics correlates findings to revenue or other important conversion or channel KPIs – down to the persona or even personalized level. In sum, avoid trusting social performance data based on coincidence rather than correlation.
- CFOs and CMOs Need to Speak the Same Language on Outcomes – A 2015 Forester study found that 74% of CIOs want to be data-driven, while only 29% of those same individuals could say their firms are good at translating analytics into measurable data outcomes. According to Forrester, three out of four CFOs say their CMO “lacks business credibility” because they don’t articulate how they drive revenue or conversion. While KPI data has not traditionally rested in the hands of marketers, the best marketers are those who progressively tap into explanatory analytics and have the ability to barter for access to critical KPIs in exchange for delivering a deeper understanding of how to improve KPIs and conversion rates. In so doing, marketers deepen their relationships with the C-suite and become a go-to resource for understanding why revenue moves the way it does. The best marketers provide the most intelligent and actionable insights into how to grow revenue versus a demo of the trendiest social media dashboard running on an iPad.
- Looking Beyond Social for the Voice of the Customer – A fair amount of filtering is needed to find the voice of the customer in all of the data and static. In fact, CohnReznick finds that approximately half of all social data in its raw form is virtually useless – spam, bots and other distortions have to be removed before discovering relevant information. And it isn’t just about getting to the clean data that represents real consumers’ organic thoughts; it is also about finding meaningful signals within clean data that correlate to the KPIs that matter. To diversify data streams and identify these signals, CMOs should blend consumer attributes and event-based analytics with financial transactions as a means to understand where consumers spend money and why. Data is more readily available than ever before, particularly with the proliferation of front-end customer identity and social data – plus debit card use and mobile payment processors. Capturing and mining more LinkedIn, Facebook, Tumblr and blog comments is a meaningful focus for firms. Furthermore, advances in photo recognition software, sensor, and wearables can correlate attributes, emotions and experiences with a brand and help fine-tune personalized marketing. CMOs should be challenged to blend in customer attributes and patterns that reveal real human intent in data in order to drive conversion.
- Agile Marketing Tactics Blending with Budgeting Constraints – Change is in every company’s competitive landscape. This will continue to accelerate over the next several years with the advent of digital as well as a highly competitive marketplace. Marketers will be urged to become increasingly innovative and ingenious – and with greater agility and speed. Marketers are now able to know within weeks what is and what is not having a desired impact on growth. At the same time, CFOs are expecting more accountability from the CMO. There will be fewer excuses to invest money once it is evident a campaign is misguided. Both CFOs and CMOs should push for a more agile planning and budgeting process that drives continuous refinement. Agile marketing is vital and here to stay.
For a deeper examination on how to capitalize on advances in digital analytics and convert marketing investment into revenue growth, click here to view the webinar, Maximizing Promotional Spend in Today’s Digital World – What Every CMO Needs to Know. For a broader understanding of the market forces shaping digital transformation and the core principles for success in today’s economic environment, view CohnReznick’s whitepaper, Digital Transformation: Leading Success at Growth Companies.