Über die Autorin bzw. den Autor

MARK JEFFERY is the Director of Technology Initiatives and Senior Lecturer in the Center for Research in Technology and Innovation at the Kellogg School of Management. He has more than thirty publications in management, scientific, and technology journals, and has published twenty-four original case studies with Harvard Business School Publishing. At Kellogg, he directs multiple executive programs including Strategic Data-Driven Marketing and Driving Strategic Value from IT, and teaches in custom executive programs for many organizations including Microsoft and DuPont. He is also the Managing Partner of Agile Insights LLC, a marketing and technology consultancy (www.agileinsights.com).

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Make data-driven marketing work for you

We live in budget-cutting times, and marketing budgets are among the first to get cut. Why? When non-marketing executives take a hard look at the numbers, they often can't see a tangible link between marketing and overall revenue. So if you're a marketer today, you're probably facing the need to do more with less, justify all investments, show results, and still beat the competition. The secret to this balancing act is having and correctly using the numbers.

Data-Driven Marketing uses simple, non-technical language to help you to master the latest analytical techniques while maximizing your Return on Marketing Investment (ROMI). You'll take your marketing performance to the next level as you discover:

• Why more than 80 percent of companies don't make data-driven marketing decisions (and suffer for it)
• The 15 key metrics every marketer should know
• The five obstacles to data-driven marketing and how to overcome them
• In-depth examples of how to apply data-driven principles in small and large organizations
• How to use the 15 metrics to improve the performance of your campaigns by a factor of five or more
• New research insights from the Kellogg School of Management, America's leading marketing business school, surveying 252 Fortune 1000 firms, encompassing $53 billion of annual marketing spending
• Free downloadable ROMI templates for all examples given in the book

Every marketing department is under pressure to deliver, but some will thrive and some won't. Data-Driven Marketing provides top-to-bottom coverage of what works, what doesn't, and what makes the difference in this important but misunderstood area. Pick up this essential guide today and you'll not only come out on top, but know (and measure) the reason why.

Aus dem Klappentext

We live in budget-cutting times, and marketing budgets are among the first to get cut. Why? When non-marketing executives take a hard look at the numbers, they often can't see a tangible link between marketing and overall revenue. So if you're a marketer today, you're probably facing the need to do more with less, justify all investments, show results, and still beat the competition. The secret to this balancing act is having--and correctly using--the numbers.

Data-Driven Marketing uses simple, non-technical language to help you to master the latest analytical techniques while maximizing your Return on Marketing Investment (ROMI). You'll take your marketing performance to the next level as you discover:

• Why more than 80 percent of companies don't make data-driven marketing decisions (and suffer for it)

• The 15 key metrics every marketer should know

• The five obstacles to data-driven marketing and how to overcome them

• In-depth examples of how to apply data-driven principles in small and large organizations

• How to use the 15 metrics to improve the performance of your campaigns by a factor of five or more

• New research insights from the Kellogg School of Management, America's leading marketing business school, surveying 252 Fortune 1000 firms, encompassing $53 billion of annual marketing spending

• Free downloadable ROMI templates for all examples given in the book

Every marketing department is under pressure to deliver, but some will thrive and some won't. Data-Driven Marketing provides top-to-bottom coverage of what works, what doesn't, and what makes the difference in this important but misunderstood area. Pick up this essential guide today and you'll not only come out on top, but know (and measure) the reason why.

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Data-Driven Marketing

John Wiley & Sons

Chapter One

A senior marketing manager in a Fortune 100 company once told me: "Every week I have to go to a gun fight, the senior executive leadership meeting, and I am tired of going to this gunfight carrying only a knife." His frustration was the result of having no concrete data to answer hard questions about the value of marketing activities in his division. We are living in difficult times, and marketing measurement and data-driven marketing are becoming increasingly important. Now more than ever, managers need to justify their marketing spending, show the value that they create for the business, and radically improve their marketing performance.

Why is data-driven marketing so difficult for many organizations? There are many reasons, ranging from "we don't know how" to the challenge that branding and awareness marketing activities are fuzzy and don't directly impact sales revenues in a short time period. The challenge is compounded by the exponential growth of data. International Data Corporation (IDC) estimates that data storage is growing at 60 percent per year, which suggests the volume of stored data is doubling approximately every 20 months. These vast amounts of data are overwhelming and marketers struggle, with limited time and resources, to measure the efficacy of what they do.

A few marketers and organizations, however, have mastered data-driven marketing principles and marketing metrics. Invariably, these individuals are heroes within their firms, are promoted faster, and rise to more senior positions. As we will see, organizations that embrace marketing metrics and create a data-driven marketing culture have a competitive advantage that results in significantly better financial performance than that of their competitors.

A few years ago, I asked Barry Judge, now senior vice president and chief marketing officer (CMO) of Best Buy, who Best Buy's primary competitor was. He said Wal-Mart. Not so surprising since Wal-Mart is the world's largest retail channel; and with its amazingly efficient supply chain and economy of scale, driving price and margins to the bare minimum, the company has radically changed the global retail landscape. However, I thought he was going to say Circuit City, so I asked why he did not.

"They just don't get it," he told me.

Circuit City's marketing strategy was to constantly run sales. This drew customers into stores and drove sales revenues. But since the advent of Wal-Mart, margins in retail are thin, so running sales actually loses money for the business; that is, it has a negative profitability. The result, as Judge put it, is a "death spiral," where continual sales are needed to drive revenues that continuously lose money.

Of course, the Circuit City story is now history; the firm went bankrupt and liquidated in January 2009. A similar story has played out across mid-tier retail in the United States over the last two decades: Marshall Field's in Chicago and John Wanamaker, the venerable Philadelphia retailer, for example, are now consolidated, along with hundreds of other well-known regional retailers that were unable to compete profitably. These stores now fly the Macy's flag.

But Best Buy is different. Sure, a significant amount of the marketing budget is spent on demand generation marketing-this is marketing designed to get customers into the stores. However, Best Buy spends more money on branding, customer relationship management, and infrastructure to support data-driven marketing compared with competitors. Best Buy also keeps score: measuring the results of marketing initiatives in a feedback loop of adaptive learning to optimize its marketing.

Best Buy marketers analyze customer purchasing characteristics and demographics on a store-by-store basis. For example, they identified one segment in certain geographies, which they called "Jills." This segment is a "soccer mom" who may well be working but is also running the family. She also makes the primary electronics purchasing decisions for the household. Based on these data, Best Buy customized the marketing for specific stores where there are a significant number of Jills in the surrounding population. The marketing included large in-store banner advertising of moms with kids using electronics, direct-mail advertising, and changing up the product mix to appeal to Jills. The resulting sales lift (percentage change) in these stores was then measured before and after the marketing activities.

This example illustrates the marketing divide: a few firms "get" marketing, and many do not. The result is that firms that get marketing have a competitive advantage, and those that do not often struggle, gradually losing market share and/or profitability, to end up eaten by competitors or to go out of business.

In collaboration with Saurabh Mishrah and Alex Krasnikov, I have surveyed 252 firms capturing $53 billion of annual marketing spending on marketing performance management and return on marketing investment (ROMI) best practices. The research demonstrates the existence of a divide between market leaders and laggards. A few statistics from the research highlight the gaps in stark contrast:

Fifty-three percent of organizations do not use forecasts of campaign ROMI, net present value (NPV), customer lifetime value (CLTV), and/or other performance metrics. (See Chapter 5 for the essential financial metrics and Chapter 6 for CLTV. Free downloadable templates accompany all financial metric examples.)

Fifty-seven percent do not use business cases to evaluate marketing campaigns for funding. (For best practices, examples, and templates, see Chapters 5 and 9.)

Sixty-one percent do not have a defined and documented process to screen, evaluate, and prioritize marketing campaigns. (For best practices and examples, see Chapters 3 and 11.)

Sixty-nine percent do not use experiments contrasting the impact of pilot marketing campaigns with a control group. (For best practices and examples, see Chapters 2 and 3.)

Seventy-three percent do not use scorecards rating each campaign relative to key business objectives prior to a funding decision. (For best practices and examples, see Chapter 3.)

I was shocked by these findings, since they suggest that the majority of marketing organizations do not have professional processes in place to manage marketing and that most do not use marketing metrics in their day-to-day marketing activities. After all, if there is no business case or ROMI defined prior to campaign funding, how can you measure success after the fact? The divide is even more pronounced when we look at marketing organizations' use of data:

Fifty-seven percent do not use a centralized database to track and analyze their marketing campaigns (see Chapters 2, 6, 9, and 10).

Seventy percent do not use an enterprise data warehouse (EDW) to track customer interactions with the firm and with marketing campaigns (see Chapters 8 through 10).

Seventy-one percent do not use an EDW and analytics to guide marketing campaign selection (see Chapters 2, 6, 8 through 10).

Eighty percent do not...