Reduce the marketing 'fact gap' to improve performance
YOU have seen the visionary examples of forward-thinking organisations that operate efficiently to uncover business opportunities and to identify gaps in market strategy. In many of these companies, marketing executives and managers collaborate successfully because they have access to the information they need, when they need it, to monitor performance across products, channels, regions and customer segments. It is by doing this that they make informed decisions to improve performance.
Yet there you sit, frustrated because you may have just wasted the morning hunting down a piece of information as basic as your top 10 customers, your worst-performing channels, or last year's revenue by region. And when you do find the data, guess what? It is already out of date and contradicts the information in another colleague's report - and it was not exactly accurate in the first place. Sound familiar? Well don't lose heart; you are not alone.
A recent survey of 675 senior executives found that 77% of senior managers were aware of bad decisions that had been made because they did not have access to accurate information when they needed it. 1 Forward-moving businesses and winning marketing teams do not fall into this trap. They are among the most informed in the business and make sure they have the detailed facts, simply and quickly when they need it, to make the right decisions.
Information handicap Difficulty in accessing and analysing key business information on an as-needed basis is more than an annoyance; it has a direct impact on productivity, decision quality and the overall success of the business. Despite the many information systems available, an alarmingly large percentage of marketers are still handicapped by:
• Not having one consolidated view of performance, often sifting through multiple reports or waiting on reports that contain a lot of irrelevant information.
• A misalignment between time invested in tactical, day-to-day decisions and higher-value strategic decisions and direction setting.
• Difficulty in locating necessary information. Employees can spend a vast amount of their time each day searching for information that could be better used executing strategy.
• Difficulty in quickly and simply analysing data to understand why changes are occurring. Marketers do not need to be analysts; you should be able to just point, click and interpret results.
• No daily tracking of actual versus targets and trending across multiple attributes such as products, channels, customer segments, inventory and departmental expenses.
• A time delay in assessing impact and performance of new products or changes to existing products.
The result: a lot of marketers are making decisions and plans based on gut feel and experience only, rather than combining these with sound and verifiable information - this is the marketing 'fact gap'. At the same time, new challenges are emerging where we have less time to make decisions and the complexity and volume of decisions are increasing.
How to close the 'fact gap'
So take a stand if you want things to change! Here are four solutions that may work for you.
1. Increase visibility into performance. As a leader, know what is important to measure. Ensure focus and urgency on delivery of results by having a view of your areas of responsibility, knowing exactly how you are tracking to achieve your KPIs at any point in time.
When the boss asks what else can be done to move the business forward, be armed with verifiable information on how you are performing and where you are not over time - and come prepared to discuss options.
2. Take back control, be cost conscious and let marketing lead. Be proactive and take responsibility for the resources your team needs to be successful. Most marketers rely on IT, finance or other business analysts to supply required data.
Ensure you drive the business requirement if you need the information, not the other way around. This way you free up your team's resources from chasing information to wisely using the expertise of other areas better to service your needs.
Ensure you have the tools to quickly and easily get the facts you need when you need them all in the one place. Reduce opportunity costs by knowing what you don't know and stop making decisions without the facts to back them up. Easy-to-use, easy-to-understand insight is easily turned into action that gets results.
3. Increase speed to market. Make sure you have the tools to respond quickly to external or internal market changes and competitive threats as they occur. I am talking within weeks here, not months. Know in detail:
• Customer performance: best, worst, value and profit contribution, campaign and channel effectiveness, understand the profile of lost, increasing, decreasing and new business.
• Product performance: identify volume, revenue and margin performance across products, know product take-up, product profitability, acquisition and retention measures, know inventory holding costs, slow-moving goods and average turns.
• Sales, channel and region performance: know average sales cycles, identify why regions or channels are performing as they are, identify customer make-up by product and channel, and know high-value customers and dollar exposures.
• Competitor performance: build internal and external market research into your information systems so you have a total view of your internal customers versus the market.
4. Empower your team to be creative and share ideas. Think outside the square by looking at different ways to achieve results. This may include performing 'what if' scenarios and having quick access to the resources you need to be successful.
Move from looking at what is happened and what is known to easily uncovering patterns of behavior that are not so obvious. Improved information sharing and collaboration among employees, partners, departments and geographic areas will also improve your chances of success.
Stop feeling frustrated with your information and decision-making environment. Rather than simply accepting this as a reality of business, you will do well to self-critique your information, performance measurement and decision-making systems.
Start to drive customer-centric business strategy and marketing activities by knowing what is going on in your business; effectively and proactively manage performance by taking charge of your requirements. The result will be evident in the value you deliver to the business through a more focused and fact-based marketing approach.
Reference
1. Hammond M. The Fact Gap: The Disconnect Between Data and Decisions. Business Week Research Services; 2003.
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