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Keeping Up with the Tech-Savvy Consumer
Technology choices can fuel a company's success—or cement its failure.
Posted Oct 5, 2012
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In today's era of tech-savvy shoppers, the businesses that are able to harness consumer sentiment and act on those insights are the ones that will be the most successful. Roughly 90 percent of the data generated today is unstructured—emails, comments on social media sites, call center notes, survey results. For organizations struggling to stay on top of just their structured data, the influx of massive amounts of unstructured data can seem overwhelming.

Companies are looking for ways to manage the volume of big data coming in, the velocity at which it's generated, and the variety of sources these contributions are coming from. In order to be successful in the 21st century, companies need to make the best use of big data by keeping a constant pulse on consumer sentiment, on a granular level, to improve their products and services. Much of the push to analyze and act on this information is coming from the chief marketing officer, or CMO.

That trend is creating a newfound common agenda for the CMO and CIO (chief information officer). Data-driven marketing, which is still in its infancy, is a complicated IT challenge by itself, making the CMO and CIO partnership an urgent necessity. That's exacerbated by the fact that spending power is shifting: Gartner predicts that by 2017, the head of marketing, not the head of IT, will have the biggest influence on technology purchases at a typical organization.

As big data places new demands on CMOs, many understand the renewed emphasis on time to value. New applications will enable them to understand the business impact of their actions in hours or days. Technology choices are a key factor that will fuel their success, or cement their failure. IBM's recent State of Marketing survey found that 51 percent of high-performing companies indicated they have good relationships between marketing and IT—10 percent higher than other companies. Turning actionable insights into business results faster will be a key measure of success.

CMOs are looking in-house to CIOs to get a better handle on their situation and to streamline their technology needs. Conversely, more CIOs are looking for ways to assist CMOs as marketing continues to transform as mobile, social, and location data grows. Together they can approach marketing as an essential enterprise system that delivers innovation, business results, and better customer experiences.

Marketers are quick to say that the customer is king, and that part of their job is to help bring value to consumers. Personalization is key to adding that value and making customers feel that their thoughts on improving products and services are being recognized. When a company knows a customer's likes and dislikes and is able to act on them, that level of personalization makes marketing feel more like a welcomed service—that's because service is relevant and valuable to a consumer, while promotion and selling are not. To provide that service, CMOs need to collaborate with CIOs to make the best use of all available customer data.

Understanding a customer's evolving purchasing preferences can also help drive more effective marketing initiatives. For example, educational publisher Mentoring Minds was able to use predictive analytics to develop a targeted marketing campaign that better met the needs of its customers by identifying their purchase preferences. Using advanced analytics, they developed an effective campaign that had an average response rate of 11 percent and an astonishing average ROI of 1,320 percent.

Mentoring Minds found that consumers who were approached with personalized packages based on their past purchasing patterns generated two and a half times more sales than the control group. Additionally, by looking at a customer's previous purchases and comparing them to consumers who had made similar purchases, Mentoring Minds could determine which products that customer was likely to purchase next. Not only was it able to demonstrate a boost in sales with personalization, but by tapping into its survey data through advanced analytics, Mentoring Minds was able to learn more about timing, trends, and customer preferences to enhance the effectiveness of its marketing plans.

Predictive analytics and big data provide a window onto customer behavior, offering not just insights, but also a roadmap to improve results quickly and effectively. By intervening at the right time, and in the right way, businesses can focus on retaining their most valuable customers and recruiting new ones.


Rod Smith is an IBM Fellow and vice president of the IBM Emerging Internet Technologies organization. As an IBM Fellow, he is helping lead IBM's strategic planning around big data and big data analytics, with a focus on how these technologies can bring real business value to IBM's customers.


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