If A Customer Behaves In The Forest And No One Is Around To Analyze It…

According to the Annual Marketing Survey by Alterian, companies will continue to invest heavily into online marketing in 2009, but less than half of marketers plan to use analytics to measure their campaigns.

Online direct marketing will also increase this year, with 62% of organizations planning an increase in that budget. Additionally, companies will look towards social networks, email, SEO and pay-per-click advertising. Yet, only 47% of those surveyed will use analytics to measure the success of this activity.

The data gathered around these types of consumer behaviors can be extremely valuable. It is this kind of information that can help you recognize your best customers and how they respond to your brand’s communications. Analysis of customer behavior can help refine your marketing campaign, increase customer loyalty and ultimately drive profits in today’s challenging economic situation.

So why aren’t more of you doing it?


Categories: Analytics, brand strategy, crm, database, economic downturn, marketing, measurable

Tags: , , , , , , , , ,

6 replies

  1. Zain, a couple of observations:
    * I found in the past few years that if I present my CEO or the Board with a financial analysis / methodology that had the blessing of the CFO, I had a much greater chance of getting my request approved.
    * The analysis not only had measures of brand awareness, image, equity, but also potential sales, gross margin, and EPS impact. That’s the language they understand.In my opinion, marketing has been late in joining the rest of the business functions in establishing clear profit related measurements of success.
    * It costs money to develop these measures, because you have to test and do research. Many do not allocate funds for that.
    * I believe the budget should be 95/5: 95% for proven programs and 5% research. Actually, today ,you could make it 90/5/5: 90% for proven programs, 5% for research, and 5% for testing new programs -alternative media, social media, etc.

  2. It comes down to “return on marketing investment,” or “ROMI”. Analytics is just one of the tools in the marketer’s toolkit. It is about addressing a problem or situation, and pulling out the tight tool at the right time.

    When situations and the marketplace become more challenging, we as humans tend to revert to what we are comfortable with. In the world of marketing, that translates to:

    * Migrating on the continuum from riskier to safe
    * Shifting budget to online as a means to continue the same amount of customer touches, but on lower budget
    * Viewing short-term rather than long-term
    * Being more tactical, a little less strategic

    Analytics is very strategic, and at times can be a longer term proposition. But not all the time, and on the cover in can appear to be risky, but in actuality it is less so. In times like these, it is difficult to see that we should be continuing analytics, especially now that consumer behavior is at an inflection point. The first to identify these changes in consumer behavior, and to act on them in a proprietary manner, will succeed.

    So especially now, it is the right thing to do, but most marketers won’t do it. Unfortunately, this can introduce future problems. Organizations that come out of tough times strong are those who continued to be strategic during those tough times. However, most marketers generally concentrate on the short term, cut back on budgets, and dial back on strategic initiatives – analytics being one of them.
    The organizations who practice this behavior in a challenging economic climate will find that they can create distance between themselves and their competition. The weapon of analysis is incredibly effective because their competitors are less likely to take advantage of the opportunity. Marketers who use analysis will have more leverage than during very prosperous times, when budgets are bigger and everyone is doing analytics.

    With consumers decreasing the number of times they buy, and their spend with each buy, the standard short term marketing tactics focused on shifting dollars may see a lower ROMI than usual. Smart marketers will see a higher return on their marketing investments now with analytics. From the marketing standpoint, it is the right thing to do now. The biggest question organizations should be asking themselves right now is “what are my competitors up to?”

  3. What about “emotional” factors? Yes, you can measure rational behavior through this process, but how are the emotional factors brought into the mix? There is good thinking here, but has it gone far enough?

  4. Mac,

    Emotional factors are definitely important, however have been the only factors considered by traditional marketing practitioners. In my view of behavior-led marketing, I believe we get more traction by beginning with behavior and adding only the most relevant attitudes and emotional factors. Thoughts?

  5. Hi Kent,

    Thanks for your post. Completely agree with you that marketers should put aside money for research and testing. As an article in Ad Age advised, “CMOs, start thinking like investment managers.” We do need to bring rigor and disciplined metrics to the table. However, I believe these should be behavioral metrics first as they lead to transactions.


    This is definitely not a time to stick to what you’ve always been doing. Brands should look at this as an opportunity to pay attention to how their customers’ behaviors are changing and respond appropriately. Analytics can be a key driver for providing a fact-based approach to decision-making, resulting in openness to change.


  1. If A Customer Behaves In The Forest And No One Is Around To Analyze It…

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