Companies spend approximately 10% of their revenues on marketing, according to the 2019 Gartner Spend Survey. Businesses expect results from the money they're spending — more customers, bigger profits, and a competitive edge over peers.
Business intelligence (BI) software can provide that edge. BI tools allow employees to produce data reports and visualizations that can show what's working and what isn't, and suggest what to try next.
BI provides the data-driven insights businesses need to guide the marketing process. BI tools can help companies understand their audience, find trends in customer behavior, measure the effectiveness of marketing efforts across all channels, and reveal insights on competitors. Let's examine how companies can use BI to accomplish these goals in more detail.
If a business doesn't know who its customers are, its marketing efforts are doomed. Organizations gather customer data through many channels, including their own websites, messages and comments on social media posts, and third-party data sources. Understanding information regarding customer demographics can mean the difference between success and failure for a marketing campaign.
Enterprises can use BI tools to develop a picture of their customers across all marketing channels to reveal who they should target. For instance, a company could use BI to view data on engagements across various social media platforms to show who responds well to its social media marketing efforts, then adjust its marketing to better target that audience. A BI tool could also regularly track customer lifetime value so the enterprise can ensure it's focusing its marketing efforts on the most profitable customers and identify new groups that are worth engaging with.
Marketing campaigns need to address buyers with personalized offerings. According to an Accenture report, almost a third of customers “expect the companies with which they engage to know more about them." BI tools help organizations see how to tailor marketing to meet customers' needs.
At the point of purchase, for example, some customers might look for product details on the company's website, while others seek out on peer reviews on social media or rely on email campaigns. A pie chart on the distribution of customers' preferred channels or a heat map of review sources helps enterprises understand how customers interact with products and what factors entice them to make a purchase. By gaining such insights, marketers can run relevant, timely, and personalized campaigns that reduce customer acquisition costs (CAC) and lead to better customer engagement.
Companies spend billions in marketing — in 2017, Alphabet spent $2.4 billion on advertising, while Procter and Gamble spent $4.3 billion. But how can they know whether these expenditures provide a positive return on investment (ROI)?
BI reports, supported by dashboards and visualization tools, can help monitor marketing efforts and measure their effectiveness. Continuous tracking and reporting allows companies to quickly withdraw or realign their marketing strategies as indicated.
Enterprises can use BI tools to track and compare KPIs that give insight into whether marketing efforts are generating higher returns, such as:
Take Netflix — in the fourth quarter of 2018, the company's marketing spend jumped by 57% year-over-year, while its revenues rose by 27%. An analysis attributes the discrepancy to escalating CAC. Winning a new customer in the U.S. costs Netflix four times more than it used to, as the company finds itself running out of new households to sell to. Netflix could use BI tools to surface this information, then retool their marketing efforts by, for example, exploring underutilized channels or focusing on less saturated markets to reduce CAC.
Enterprises can also use BI reporting to gain insights regarding competitors and their industry at large. With third-party data, companies may be able to measure their competitors' performance and benchmark that against their own. They can then adjust their efforts to beat the competition by, for instance, changing pricing, increasing marketing spend in a neglected channel, or targeting different demographics.
Companies can use BI to gain a competitive advantage in many ways. They can compare specific metrics, such as website traffic or social media engagement for newly launched products, or assess competitors' marketing practices for specific channels, such as email, to see if their own marketing could be improved.
To surface insights, companies need to invest in BI tools that suit their needs and ensure that their data is integrated and accessible. Enterprises can use a data warehouse to centralize data across all their marketing channels into a common repository. To get all your data into a centralized warehouse, you need a streamlined data pipeline that moves data from multiple sources to the data warehouse. Stitch can help fast-track your BI journey by getting data from more than 100 sources to one place. Try Stitch for free today.