How an Analytics Culture Drives Exceptional Business Results

November 7, 2018

By Mark A. Galliher

Gregory Huczynski/Getty Images

Nearly all businesses see value in data, but only a few have fully harnessed its potential to contribute directly and substantially to business results. Companies that are achieving extraordinary results have discovered that the secret to making data and analytics truly transformative lies in a single word: culture.

Brands that have advanced analytics cultures experience greater business success. This insight is from a groundbreaking Forrester study commissioned by the ANA and its data analytics partner, Neustar. Drawing on feedback from more than 150 marketing decision makers from ANA member companies, the study examined the importance of developing an analytics culture and the associated challenges marketers face in building those cultures.

The report reveals clear financial and organizational advantages for companies that are mastering measurement and analytics compared to those that are just starting or developing such programs.

Mastering companies, for instance, report significantly better performance on a range of outcomes, such as ROI, revenue, and marketing efficiency. Most notably, they see nearly a three-times improvement in business decision-making speed and time-to-market with new products, higher marketing ROA, greater marketing efficiency, and new customer insights compared to companies with less sophisticated analytics cultures.

Mastering companies are also more adept at constructing compelling data and analytics "stories" that communicate analytical findings in clean and succinct ways that can then be easily translated into action. Another common characteristic of mature analytics cultures is reflected by the degree to which the analytics insights teams have a seat at the table for decision-making.

The Forrester research report goes on to highlight that analytics-based decision-making supercharges results for companies that get it right. Forty-three percent of companies with mature (or mastering) analytics cultures reported that they performed significantly better against key metrics, such as conversions, engagement, growth. The study also reveals that brands with advanced analytics cultures experience greater success, averaging a 9.1 percent increase in marketing ROI over the past two years.

Nearly every one of the companies in the study agree that data and insights-driven decisions yield substantially better outcomes. However, even the best-in-class measurement tools and technology will produce little benefit unless the cultural mindset exists to deploy the insights consistently and within a common framework.

The most effective analytics cultures are influenced by five core factors:

  1. Strategy
  2. Technology
  3. Data-science expertise
  4. Organizational adoption
  5. The ability to turn insights into action

Julie Fleischer, VP of marketing solutions at Neustar, says companies need to develop a culture of analytics, championed from the top, with everyone coming together around a shared framework, currency, language, and narrative in order to win. To me, this is spot on and truth well told. I agree with Julie and believe this is something every marketer should strive for within their organizations.

Because an ingrained analytical culture is such a significant contributor to improving business performance, companies seeking to build a transformative analytics culture should consider the following:

  • Use analytics to stay hungry and agile. Avoid preconceptions about where, when, and how analytics can be applied in your organization.
  • Expand the depth and breadth of an organization's analytical focus. Many companies concentrate their analytics initiatives in an area with high visibility — the good old media budget. Mastering companies really move beyond this and optimize decisions around marketing's four Ps: product, place, promotion, and price.
  • Thoughtfully invest in analytics. Companies should recognize that building a true analytics culture never ends. Companies will know their analytics culture has taken root when new ideas and applications for analytics come from the ground up, rather than being pushed top-down.
  • Never stop investing. Companies should continuously invest in expanding analytics capabilities. Thirty-four percent of mature companies spend 10 percent or more of marketing budgets on measurement and analytics.

It's no surprise that brands are under tremendous pressure today to keep up with the incredible array of available media along with the daily flood of data barraging them from all angles. What the Forrester report reveals is that having an analytics culture really does matter, and those brands that fully embrace analytics and make it a key part of their marketing mix will surely reap wide benefits.

The "How An Analytics Culture Drives Exceptional Business Results" report includes key recommendations on how to develop a transformative analytics culture for starting companies, developing companies, and mastering companies. Find the full report here.

 

Mark A. Galliher is a VP of marketing and communications at the ANA.


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