It seems like every conference I go to pundits are debating and comparing the latest features and trends from the Gartner Magic Quadrant, but the truth is, a data-driven and formalized strategy for process improvement can have a greater impact on small and medium-sized organizations than complex analytics software.
The game doesn't end (or begin) by extracting data insight. High performers close the loop by converting insight into action.
"You've got to think about big things while you're doing small things so that all the small things go in the right direction" - Alvin Toffler (writer and futurist)
In data-activist parlance, phrase "operationalizing analytics" implies that insight must inform decisions or influence processes to derive value. To add a finer point, in addition to supporting strategic decision making, analytics should support and permeate through the day-to-day activities of operational workers. Consider the CxO who invests in a mobile profitability and sales dashboarding application that doesn't provide actionable data. The operational workers at best view the tool as superfluous information, or in worst-case scenarios, these metrics intended to 'encourage competition' functionally serve as flogging sticks.
To improve adoption across the organization we must tailor analytics to support operational workers. Wondering where to begin? Data strategists frequently target price, promotion, assortment or retail execution, as these four areas frequently have the highest impact on profitability.
Management consultancy, Catalystis, www.catalystis.com, uses the following framework to manage process change at small and medium-sized companies.
From Reporting to Analytics
Problem: "How can we increase sales?"
Report: "I have a report that shows customers who haven't purchased anything this year and a list of our 10 most profitable products."
Action: "Give it to the salespeople and let's start making phone calls."
Jet Professional, www.jetreports.com, is a software I've used to develop operational reports like this for my clients; however, although it's fast, flexible, and works within Excel, the story cannot end here. In addition to implementing a new endeavour, we must implement processes to measure the effectiveness of the campaign. Additionally, we should examine means of automating this effort, because it cannot scale with customer volume and ideally to improve effectiveness, we should present personalized offers (not just the 10 most profitable items store-wide).
An Automated Implementation
Instead of manual phone calls, let's push the results of our Jet Reports into MailChimp or ConstantContact campaigns. From there we may expand to include newsletters, special offers, or monthly promotions as a way of passively touching our customers.
Yes, these recommendations center around changing business processes, keep in mind that analytics exist to support the business. We'll still need lists of customers to fuel automated and manual marketing endeavors, but now we'll start analyzing the impact of campaigns and changes in customer behavior.
The most common form of marketing analytics may be A/B testing (or split testing), which compares the effectiveness of two promotion variants.
The journey from insight to action requires a structured and systematic way of not only developing solutions but also measuring the effectiveness of solutions. In this phase it's common to hear data-activists say, "experiment and fail often." A/B testing is nothing if not a methodical series of 'failed' experiments with the end goal being: "find the most impactful marketing campaigns for increasing sales."
Evolution and Expansion
Be prepared to act on new insights. Your primary business model may center around servicing customers on year-long contracts, but if those customers only constitute 30% of sales and require additional high-cost manual activity, there may be justification for shifting the business model to service and develop the 70% of web-based sales.
Develop models of outlier behavior and devote resources to tasks which cannot be automated. Monitor the outlier clients who DON'T engage with your automated marketing content. Are they truly one-timers or are these cash-cows who've grown unhappy and are ready to churn? Do they just need a personal touch from a sales rep?
Use questions to drive integration or expansion of new data sources into your analytics.
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Author Jae Wilson, lead data strategist at Onyx Reporting, partners with co-author Joel Conarton, director at executive and management consultancy Catalystis, to provide strategic solutions for data-driven organizations.Are you ready to partner with us?