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Creating a marketing plan used to be more art than science. We'd scrabble for a bit of information here and there, crunch some numbers, wet our finger to determine wind direction, and then go with our gut.
No more.
The avalanche of data - tumbling in from point-of-sale scanners, credit cards, loyalty cards, websites and social media platforms like - has transformed marketing. Sure, there's still an element of art - intuition comes into play in the end - but science girds it better now, giving us new and often surprising consumer insights.
Yet, all this information is useful only if you can connect it to strategy. That's why future marketing mavens will have to be smart consumers of analytics. Here are five insights that illustrate the brave new world of marketing science-and how all this data can sharpen business plans.
Consumer preferences are important Most marketing managers rely on data that captures past behavior. They overlook valuable information that can be mined from social media sources to provide a wealth of insight into consumer preferences. If I find out what someone's preference is today, I can predict his or her actions tomorrow-and try to influence the future behavior I anticipate. At a pharmaceutical company where we conducted research, we found that by knowing physician drug preferences we could tell early on if a doctor could be retained as a customer-and how valuable that relationship would be over time. That information also allowed the sales force to focus on high potential doctors based on preferences.
A different view of coupons If you go into retail, you'll likely have to deal with coupons. Most managers and retailers measure the effectiveness of their coupons by tallying up the redemption rate. Though it seems counter-intuitive, coupons work even when they're not redeemed because they function as form of marketing. In the past, retailers were not able to track who received a coupon, but online retailing, mobile commerce, and loyalty programs leave a rich digital trail. In research with a grocery retailer, we identified consumers who received customized coupons, and found that spending increased after the coupon campaign for both the coupon redeemers and non-redeemers.
What the data says about loyalty lures Some retailers give reward points for each $1 a customer spends. In theory, that gives customers an incentive to come back - a loyalty lure. Retailers use loyalty programs to attract consumers away from the competing stores located nearby. One might think that the loyalty rewards a store needs to offer increases with the density of stores in a neighborhood. However, analyzing the data we find that the opposite is true. Stores can in fact provide fewer rewards if there are several other competing stores nearby. As any dedicated shopper knows, it's more convenient to shop in areas with lots of stores nearby. It's the basic idea behind malls. That means retailers can rely on the casual foot traffic and reduce the emphasis on loyalty rewards.
Not dead yet TV lives. Print lives. Radio lives. Though many consider these vehicles marketing dinosaurs, they actually help digital marketing work better. True, more people are buying online but the consumer still has to type information into a search engine to find what they want. Firms want consumers to search for branded keywords because they are more cost effective. But you search for a brand only if you aware of the brand. How do you know about brands? Through advertising on TV, newspapers and radio.
Variable Cost Marketing Old world marketing meant ad campaigns in television and newspapers were a fixed cost because it was impossible to change direction and cost on the fly. Even if the campaign wasn't going well, you couldn't stop and tinker. With the advent of digital ad campaigns, that's all changed. You can tell, in real time - click-by-click - if the digital ads are working and quickly adapt, making marketing a variable cost.
Big data provides firms with opportunities as well as challenges. The opportunity lies in understanding consumer behavior better. The challenge rests with connecting all this real time information on consumers to strategy.
Entities 0 Name: Companies & Industries Photograph Count: 1 Related 0 Url: http://ift.tt/1pZPcAS Title: Measurement in a multichannel world - Digiday Description: In a busy multichannel environment, brands are fighting to gain the attention of consumers who move seamlessly from device to device, and from digital channels to bricks-and-mortar outlets. This complex behaviour means that marketers need to engage consumers across these channels in ways that are convenient and natural for them.
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