How analytics can help sales and marketing leaders optimize their promotional investment
Sales and marketing investments make up a significant percentage of spend for most companies today. Moreover, these investments are increasing in digital, social and mobile channels. For example, consumer goods companies are increasing their interactive marketing spend by 22% year-on-year.
In this multichannel world, with competition emerging from unexpected quarters and the ever-increasing pressure on prices and operating margins, mistimed and misplaced channel investments are luxuries that companies can ill afford. Understanding channel effectiveness and defining the optimum customer-centric channel mix is becoming an imperative.
Given the confusion created by proliferating channels, many marketing and sales professionals are trying to understand which sales channels and models are most efficient in terms of delivering the desired outcomes. That is a tremendously complex question that will take time to answer.
But as they search for this answer, they can already increase returns immediately and dramatically by reallocating channel spends in a new and optimal way. This approach is founded on an aggressive differentiation of investment levels by channels and customers. Companies that have rigorously applied this approach have freed up a significant part of their investments, which in turn, has allowed them to put their money where it is likely to have a much greater impact.
Discovering the winning channel mix
By mining multiple data sources already at their disposal, companies can derive rich insights that can then be used to define and monitor an optimal channel mix, bringing visibility on opportunities for growth and areas where investments disproportionately exceed customer value. Excelling in the following three areas can lead to increased sales with the same promotional budget or a reduction in promotional investments with the same performance outcomes. Moreover, companies can reallocate resources to their most strategic customers, focus on the most effective activities, and tangibly increase the productivity of sales and marketing investments.
- Historical channel analysis: Customer centricity is key to successfully articulating and implementing a multichannel strategy. Customer segmentation is a pillar of this analysis but is not enough. A data-driven analysis of historical interaction channels, targeted at customer segments, provides the necessary insights for an efficient decision-making process.
- Future channel definition: The next challenge is to turn insights into action and align decision makers in a common direction. Multichannel effectiveness analysis provides sales and marketing teams the insights required to optimize future resource allocation.
- Execution and measurement: Monitoring execution and measuring outcomes help to tangibly identify the degree of success of the multichannel experience. It also provides an opportunity to make quick adjustments to the channel mix, if required. For effective execution and measurement, metrics to track execution against objectives need to be defined.
Read more about how your company can achieve the winning channel mix
