Many firms struggle to utilize technology, software, and human labor for better business outcomes. A study suggests that analytics-driven decisions yield better outcomes.
A recent article from HBR highlighted the “Analytics Paradox”—company investment in marketing analytics increasing despite the impact on firm-wide results being relatively modest. Though most companies and marketers realize the importance of analytics but most struggle to adequately convert technology, software, and human labor into better business decisions and outcomes.
However, recent research suggests that there may be some domains where marketers are progressing. Forrester, ANA and Neustar conducted research with over 150 marketing decision makers from U.S. companies. Nearly all of the marketers who participated in the study agreed that data- and insights-driven decisions yield considerably better outcomes. Some of the highlights include:
1. The factors that make up better analytics performance are the strategy, technology, expertise, organizational adoption and the ability to put insights into action.
2. Gaining employee buy-in is difficult but the companies that employ a “top-down” approach are more effective as it drives alignment faster.
3. Forty-three percent of the firms with better analytics cultures reported significantly better performance against key metrics (i.e., conversions, engagement and growth). These firms reported being able to link analytics to metrics—a key barrier for many firms.
4. More than one in three (35 percent) companies with good analytics cultures indicate that their analytics center of excellence is highly influential, as opposed to just 6 percent of those with less mature analytics cultures.
5. The arguably most crucial difference is that the more sophisticated analytics firms are in a better position to succeed because they prioritize measuring the metrics that impact the bottom line such as ROI on marketing spend, incremental revenue, brand equity metrics, and customer lifetime value. Interestingly, better analytics firms were nearly two times as likely to be measuring some of these metrics compared to starting companies.
6. The more mature analytics firms are achieving superior outcomes on a number of different factors, including ROI, speed, revenue, etc.