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Years Later, the Tangle of Data Still Presents Challenges

Oh, what a tangled dilemma marketers face today.

After years of financial stress, demand for marketing accountability has not let up in the least, putting loyalty marketers under immediate pressure to produce results, or face the consequences.

I first wrote about this dilemma two years ago and I realize that not much has changed. In fact, my old article still holds up.

Generally, companies still find themselves with loads of data but not enough action. Now, as then, a partnership is needed between the marketing and finance departments to link customer performance measures with revenue, sales and cost measures.

This should be good news for loyalty marketers. With our ability to isolate incremental behavior to quantify customer value, we’ve helped transform marketing into a science. But our strength can also be our Achilles’ heel, because the highly measurable quality of loyalty marketing means it is held to a higher standard. Scrutiny falls on every dollar we spend, and any perceived misstep is deemed a failure.

Yet we push on, amassing data, oftentimes missing the opportunity to extract value from this asset.

This data commoditization has forced CMOs and CFOs into active debate, struggling to link customer activity to marketing efforts, and in turn, with financial performance. How can we create the perception of value in loyalty marketing beyond its currency-related benefits?

One simple solution is to apply value to the actual data. Take customer segmentation. If one particular segment can capture basic metrics, such as cost and margin, and is also predictive of future customer activity, then there is a solid basis for linking financial performance to customer measurement.

I know; prediction is never valued as much as explanation, but it is where the CMO and CFO can work together to make that connection. Customer activity measures can reveal the results of individual campaigns, and they can link such activity to future corporate performance.

Segmentation is an old standard, but how many organizations view it as an asset to be shared by the entire enterprise, and not merely the marketing department? No one silver bullet defines marketing accountability, but customer behavior can be more telling, actionable and accountable than other metrics.

If a downturn is when innovation matters most, then a recovery is when it proves its mettle. As long as we’re rich in data, integrated in our strategy, and imaginative in our approach, we’ll continue to combine the science of marketing analysis with the art of marketing creativity, and improve the bottom line.

Photo courtesy of aginity.com.

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