Data Analytics: ‘Connecting the Dots’ to Spur Outsized Revenue Performance
It has become an article of faith that information is power. It’s also pretty well accepted that having the ability to effectively and rapidly analyze information can turbo-charge a company’s performance and fundamentally improve corporate value. These days, who doesn’t want even more analytic horsepower driving their business decisions and activities?
It’s relatively easy to analyze many aspects of business operations: financial data, manufacturing data, supply chain data, etc. The volumes of real time data feeds may be high, and the analytic math may be complex, but in the end this sort of data is highly structured and mostly based in objective facts. But marketing and sales data? Not so much…
If twenty different marketing programs touch a prospect across the six months before they buy, which ones of those actually made a difference? If two sales reps sitting side-by-side are having different success achieving their quotas, is this because one rep is more skilled than the other, or because their territories and lead flows are different? Answers to these kinds of questions rely on subjective judgments, inference and intuition.
So, what if it were possible to literally “connect the dots” between all of that random and typically unstructured data to create information that a corporation can act upon to drive sales and marketing results? While that goal may sound like the business equivalent of the Holy Grail, it’s actually possible today. And you don’t have to embark on a hundred-year quest to find it.
For sales and marketing departments looking to drive increased revenue performance and profitable growth, having that kind of actionable data represents more than just a competitive advantage. It can mean the difference between making your quarter, and your entire year’s revenue targets, and falling further behind in a fiercely competitive marketplace. I am sure you would agree that the latter scenario is not an option!
Given the Internet, Google, social media, and the entire digital information revolution, the data universe has exploded like a super nova in recent years. What was not so long ago considered a massive amount of information is today viewed as laughably small. The good news is that the ability to use analytics to examine the mountains of customer/market data and glean important behavioral and attitudinal insights from it, is also radically advanced today. It better be, when you consider the exponential growth in new information that businesses must manage every day. And while it may not be possible to answer the question of “which marketing programs made the difference” for any one buyer, given this new wealth of data it is possible to answer this question in aggregate across your entire business.
So how do you take advantage of this ability to “connect the dots” in the sales and marketing process (what we like to call the “revenue cycle”). Sophisticated software now enables revenue executives to have much greater visibility into what is truly happening with buyers, what may happen in the future, and what levers need to be pulled to affect the sales outcome. Needless to say, when you can guide customer behavior based on facts, you are operating at an entirely different and much more productive business level.
When you make decisions using real-world data and quantitative methods – and not just intuition and one’s “gut” – you will also demonstrates to management that you are speaking their language. It probably goes without saying that tangible revenue results and business growth are the “Lingua Franca” of the C-suite. To effectively engage with your company’s senior executives (no less the board of directors), it makes sense to communicate in the language that truly matters to them.
MIT Study Finds “Data-Driven” Companies Have Higher Output, Productivity
I am not alone in examining the tangible, measureable business improvements that can result from using data and advanced analytics. The New York Times recently ran an article about a major new study from MIT’s Sloan School of Management that found a real “payoff” for companies that used data to make decisions.
Based on a survey of 179 large corporations, the MIT study found that those that adopted “data driven decision making” achieved productivity that was 5 to 6 percent higher than could be explained by other factors, including how much the companies invested in technology. According to the researchers, the central distinction is between decisions based mainly on “data and analysis,” and those based on the traditional management arts of “experience and intuition.”
The Times quoted the lead researcher as saying that a 5 percent increase in output and productivity is significant enough to separate winners from losers in most industries. (Just think of how your CEO or CFO would react if you could promise them a 5 percent increase in revenue performance this quarter.)
It’s abundantly clear to me that using data analytics to create actionable insights has a powerful effect on the number one goal of most companies: driving more revenue, more profitably. For marketers still looking for that proverbial “seat at the management table,” being able to generate increased revenue performance, more predictably, is a sure way to own that seat for the long term.