Data-Driven Marketing, a key approach for business growth
A data-driven approach, a business intelligence strategy and big-data analysis are crucial for a company that wishes to break through
What effect on a company’s business does a Business Intelligence and Big Data oriented approach have? According to research conducted by Boston Consulting Group and commissioned by Google significantly. More specifically, companies that have chosen a data-driven marketing approach achieved a 1.4 times higher cost-benefit ratio and up to 2.5 times higher revenues.
Despite data being referred to as “The new oil” since 2006, to date only 2% of companies have advanced their corporate and brand culture by applying advanced data-driven marketing models. This is despite the fact that the number of big data companies – meaning providers of specialized IT services – continues to grow, and artificial intelligence, or more accurately machine learning, is an increasingly well-known and widespread concept. It bears saying that, although it is the most important area, a data-driven approach is not limited to marketing but rather involves all company departments.
Data, if properly managed and processed, become decisive in manufacturing, in the supply chain, and in financial management; and have an indisputable influence on the optimization of processes and, finally, on the results of all sectors.
Technology and data culture to enable change
Why do only 2%
of companies worldwide apply advanced data-based marketing models?
BCG’s research helps us by highlighting how a company’s digital maturity is supported by two key pillars that in turn include three enablers:
- Technological solutions and expertise
Technical skills concern the ability to collect and manage data – in compliance with regulations and the GDPR – through the incorporation of proper technological tools and by monitoring the results of each initiative, in particular thanks to:
Connection. In other words, the ability to connect data from a range of different sources (online and offline, inside and outside the company perimeter) in order to identify target audiences (clusters) and build a complete consumer profile.
Automation. The ability to perform real-time matching of (user) data, content, channel and time. This is solved through the use of analytics tools, customer relationship management and integrated technology for advertising purposes for the automation of media buying and customization of the message – and, as mentioned, more besides. In fact, the axiom is equally valid if the word “users” is associated with a broader meaning that includes, for example, company employees themselves.
Measure. The ability to identify the value of each touchpoint to determine KPIs and link engagement to business results: sales, margins, but also production efficiency of resources.
- Data culture and capable partners
Technological tools are no use if their performance is not supported and strengthened by organizational enablers – for example, in the field of marketing with brand activities and campaigns – but, as previously mentioned, the concept is easily extensible, for example applications in Human Resources. BCG identified three critical factors:
Partnership. It is essential to establish a close partnership with IT suppliers and agencies, always maintaining direct control over data and technologies, because a data-driven company is such if its people are.
Skills. Data must be interpreted, and this task goes beyond the boundaries of scientific expertise, as far as the humanities. It is therefore essential to recruit or make use of new skills, such as data scientists and measurement experts, to work alongside the managers of the individual company departments, encouraging the creation of multidisciplinary teams.
Agile (fail-fast). The fail-fast culture favors the application of the test-and-learn methodology so as to immediately identify any flaws and errors and remedy them instantly and not after the project has been completed.
The combination of these critical success factors, according to BCG, should bring the company closer to the ideal of digital maturity, i.e. the ability to convey the right message to the right person at the right time through the right channel.
Technological tools supported by fine-tuning
The digital tools used are typically algorithmic engines which include Artificial Intelligence components and are distributed in the form of cloud services. These are joined by Data Visualization front-ends and API connectors for the integration of existing application services at the company. Correct implementation, and above all correct fine-tuning, permit the goal of increasing the capacity to generate value, and therefore business.
Tests conducted by BCG have also shown that companies able to apply cutting-edge technologies from the point of view of automation, artificial intelligence and machine learning have achieved savings on the order of 30% and 20% increases in revenues. But those who have combined the best technologies with human supervision have achieved an additional 15% in terms of performance. Therefore, the level of service (fine-tuning and monitoring) of this type of solution by a dedicated external or internal team is crucial.
Ultimately, in the words of American marketing expert Philip Kotler, “There are two types of companies: those that change and those that disappear”. And today it is clear that change is enabled around a single pivot point, the data. For a company, embarking on a digital transformation path therefore means achieving an awareness of data previously left in the background.
It is important to note that smart companies approach change through non-invasive methodologies and modular interventions, of which test-and-learn is an example. We should also point out that not only should existing tools and architectures not be sacrificed, but they are actually the foundations to build on.
As a matter of fact, the starting point is to leverage existing databases and current technologies in order to demonstrate the potential of a concrete data-driven approach. Defining, tracking and analyzing KPIs is also crucial in measuring the effectiveness and efficiency of the new method, and to speed up the following steps and implement an overall digital transformation.
Lutech – with more than 2,500 professionals spread over nine different countries – defined precise methodologies some time ago for digital transformation applied to different vertical contexts and departments within the same company, with services of... Link a area big data ecc
AI and human power
By combining AI, machine learning and automation technologies, a team of skilled analysts achieves a 15% performance increase. Choosing a partner with teams of data scientists such as Lutech makes the difference
Improving customers’ purchase experience and rewarding them with a loyalty program