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(originally published by Booz & Company)


New Support for Marketing Analytics

From previous studies, the authors cited two companies that had benefited from analytics. One was the German mail-order company Rhenania, whose president credited the approach with saving the firm, increasing its customer base by more than 55 percent, and quadrupling its profitability in the first few years after the system was implemented.

The second example was the Marriott Corporation, which found itself in the 1980s without enough downtown locations to build new hotels in numbers sufficient to maintain growth. Using an analytics approach—and factoring in the changing location needs of both leisure and business travelers—the company developed the Courtyard by Marriott spin-off, which became a multibillion-dollar chain in its own right.

Although doubts about marketing analytics persist in many industries, the authors urge skeptical managers to give the approach another look. For one thing, because it is still not widespread, companies that embrace it would reap significant competitive advantage, they say. But if a decision to go ahead is made, it is not enough to retain outside experts for guidance, the authors warn, without also instilling a supportive culture inside the company.

“Our study provides a strong rebuttal to executives who believe that information gathering and analysis result in excessive delays and ‘analysis paralysis,’” said one of the authors, Gary L. Lilien, in a press release. “On the contrary: When analytics is deployed with strong support from key executives, organizations thrive in competitive industries and react well to today’s customers, who frequently change their product preferences.”

Bottom Line:
A company’s performance increases the more it uses marketing analytics to align its advertising and other sales campaigns with consumer and industry trends. Firms that promote a culture conducive to data-driven marketing methods can see significant improvement to their bottom line, especially if they operate in highly competitive industries.

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