Author: Dr. Subhajit Bose
Business leaders across the globe agree that data is the new oil and business analytics has been gaining importance and playing a pivotal role in organizational strategy & decision making. It is apparent that data and analytics will become the essential function for any organization not only to grow, but to survive. Marketing functions in specific can unlock immense value from analytics, if they can leverage the power of data and analytics.
Given the advancements in technology and its usage in business, organizations today are endowed with massive data sets consisting of varied data points across different areas and functions of businesses. Similarly, the eco system also holds phenomenal amount of data, which if stitched in a meaningful manner, would reveal answers to questions which marketers have been seeking for decades.
The benefits of analytics are all pervasive across the marketing function and is nudging CxOs and Marketing Heads to make significant investment in this space to ensure marketing and eventually organizations succeed.
Business Analytics is used today across the entire spectrum of marketing. Starting from understanding of customer tastes and preferences, buying behavior patterns, probable price points, market segments and other key traits of customers and markets. Business analytics are used to understand competitive dynamics and prepare the organization to proactively position its products or services at the right time and price points.
Business Analytics provide deep insights about the market, customers, competitive products as well as the performance of marketing teams which helps an organization to improve its effectiveness and efficiency.
In this hyper competitive environment, analytics provides proactive insights to marketers and helps them to stay ahead of competition.
Some key areas where marketers can reap immense benefit from business analytics are highlighted below:
Demand forecasting: Understanding of customer demand is perhaps the most important aspect for any marketer and historically companies have employed the best minds and invested significant money to decode customer expectations and preferences. Whilst various tools and techniques have been used over decades, business analytics has now become one of the most critical functions which marketers rely on for understanding demand. Business analytics offers various techniques and tools to estimate demand based on simple time series-based and cross-sectional data analytics to more complex and sophisticated predictive analytics leveraging the power of econometric modelling, statistical methods like regression analysis etc. The advantage of using business analytics in predicting demand is that the marketer gets an indication of demand in advance along-with sensitivities of independent variables impacting sales, which are required to craft strategies around marketing a product or service.
Sophisticated models today have the power to predict/forecast demand with a high accuracy level. Having said that, it must also be understood that analytics is not a panacea and is based on certain logical and rational behavioral patterns of the customer, competitive dynamics and environmental factors. Any deviation from this assumption may lead to a decline of the accuracy level. Thus, the best solution is to blend the forecast derived from business analytics with the rich and deep experience of the marketer and often, such a blend becomes extremely powerful to craft marketing strategies.
Market segmentation: Market segmentation is an extremely important aspect which every marketer needs to identify for purposes of positioning their product and pricing the same. Business analytics plays a critical role in terms of helping the marketer to identify key customer segments and behavior patterns. Analysts use both internal and external data to identify customer market segments and can also identify emergence of new customer segments. These are extremely critical for any marketer to position or reposition their products promptly.
Marketers is in the retail space can leverage the power of machine learning and artificial intelligence based on historic data and smart algorithms to predict customer behavior patterns, seasonality, footfall and various other demand parameters which help them to position their products and sell at optimum price points.
Significant amount of research is being undertaken in the area of decision sciences and the analytical models will become more sophisticated in times to come. Business analytics will play an even more crucial role in supporting the marketing function of an organization and marketing decisions will be based on data driven decision-making as opposed to only experience-based decisions.
Supermarkets, online apps and similar other establishments rely heavily on analytics to navigate their marketing activities, design campaigns, promotions etc. As an example, supermarkets use analytics to decide on product positioning on shelves, flash sale decisions etc. Demand aggregating platforms use analytics to decide on price points, cross and upselling opportunities and customer relationship management to optimize customer acquisition costs.
Therefore, business analytics has a lot to offer for marketeers and it is up to the marketing community to use and leverage the power of data analytics and unlock the value which will help them to market their products with even higher precision and optimize their resources.
With customers migrating to digital platforms for their purchases, thereby generating massive data footprint, data analytics has become a necessity for any marketer to effectively market their products or services.
