How to Realize the ROI of Marketing Spend with Analytics
Written by: Vanessa Begley
Over the last couple of years, the retail industry has changed drastically. With the increased availability of options and substitutes and the strong presence of e-commerce and direct-to-consumer companies in the industry, retailers are forced to strategize on ways to differentiate themselves from these new threats. The most prevalent means of differentiation for retailers over the years has been through marketing and branding initiatives, and that is expected to remain the case for the duration of 2020.
In this blog, we will review two of the ways that marketing and Branding can provide organizations with a competitive advantage in the retail landscape:
Within organizations, there is a trend for marketing to allocate spend to the “Traditional Marketing” bucket, rather than the “Branding” bucket. This could include line items like direct mailers and advertisement spend. However, with consideration of the trend of needing to become data-driven and utilize data for insights, we’re starting to see a change in that. In the last year specifically, retailers have discovered the importance of funnel optimization. Without investing inbranding which is traditionally considered a “Top of Funnel” sales activity, bottom of the funnel initiatives are not as effective.
We’re seeing large retailers like Adidas get on board with this marketing realization. In October of 2019, Adidas “shifted their journey from marketing efficiency to marketing effectiveness,” and released their findings that they had incorrectly projected customer acquisition for 2019, causing a misalignment in the budget. Similar to many retailers, Adidas falsely assumed that loyal customers were driving sales when, in reality, 60% of their revenue was coming from first-time customers. Their original assumption caused them to invest more budget into performance-based marketing when they really should’ve been investing in branding to drive more net-new customers in. This realization resulted in a push for a 60:40 split between the two buckets, whereas, they previously had been investing 23% into brand and 77% in more traditional marketing spend.
“We had an understanding it was digital advertising driving e-commerce sales, and as a consequence, we were over-investing.” – Simon Peel, Global Media Director, Adidas
Customer loyalty should be considered an essential facet of your marketing and branding strategy. Whether your organization is in the same environment as Adidas where new customers drive most of the revenue, or your loyal customers own most of that revenue, the consideration of how to keep your existing customers should play a huge part in your marketing and branding. This can play out a plethora of different ways depending on your organizations' landscape, but a great example of how organizations are doing this is through a brands social consciousness or brand purpose.
Consumers now more than ever, are looking to align with brands who are making an impact on the world in some regard. In fact, according to Fundera, “89% of customers are loyal to brands that share their values.” Microsoft and Patagonia are great examples of organizations moving towards strong brand purpose strategies. Ultimately, your organization needs to identify how to keep and nurture customers after their first purchase with you.
“89% of customers are loyal to brands that share their values.” - Fundera
See it in Action
When marketing and branding are backed by analytics, your organization can become unstoppable. One Med Spa partnered with CCG to modernize their reporting platform and get a better understanding of their data. The company was unable to access business intelligence without involving someone from IT and had little data governance in place.
CCG was enlisted to look at the Med Spa’s unique challenges and provide a RapidRoadmap solution addressing cross-functional data access and reporting, communication across teams, and the ideal future state of the data program. Within the RapidRoadmap engagement, they uncovered five core use cases across sales and marketing, customer analytics, and center management. With analytics use cases in hand, CCG’s next task was to integrate the Med Spa’s data from a home-grown ERP system and Salesforce into a Microsoft Azure Database. CCG leveraged a Bi-Modal approach, developing innovative prototype dashboards and statistical models to prove value, then operationalizing the most useful prototypes on the Azure platform. The team also built executives a self-service data mart with easy drag and drop functionality to help answer questions immediately as they come up.
The holistic data strategy identified in the RapidRoadmap enabled the CCG team to adapt their analytic output according to the new set of company-wide executive objectives. CCG aligned specific data projects around those objectives, including:
Funnel Optimization - to improve focus and effectiveness across the sales funnel
Center Optimization – to “plug the holes” by reducing shrinkage and maximizing operational efficiency
Marketing Spend Optimization - to achieve more precision around marketing spending and efficiency
Financing & Loyalty - to gain insights on behaviors that can drive lift and loyalty
Performance Management - to understand the story behind the story across the entire business
Overall, CCG was able to answer executive-level questions through the power of data. This solution empowered self-service through the organization, enabled users to dig deeper in their analytics, illuminated their customers behaviors and needs as never before, saved money and time on marketing and center management costs, and optimized governance processes for years to come.
Wrapping it Up
We’ve seen many of our retail customers have success when they align their marketing and branding initiatives with insights backed by data and analytics. If you’re ready to gain a competitive advantage in the retail landscape, check out our step-by-step guide to setting strategy, providing results. and scaling customer analytics insights by clicking here. You can also learn more about CCG's Customer Intelligence for Retail solution by clicking here or emailing firstname.lastname@example.org.