Five Ways to Increase Profits Using Marketing Analytics

If you have customer and transaction databases, you are likely sitting on top of a wealth of potential profits.  Marketing analytics provides companies the means to increase profits by leveraging customer data.

The challenge is making sense of all this information so that it is actionable.  Marketing analytics translates the mountains of customer data into insights that can drive marketing strategies and tactics designed to increase return on investment and profits.

It’s time to leverage your customer data through marketing analytics and positively impact profits in five key ways:

• Increase Customer Retention/Reduce Churn/Attrition – Create customer behavior, spending pattern, and demographic profiles for those that have stopped purchasing form you.  Use this profile to establish an “early warning system” for your current customers to trigger retention initiatives.
• Clone Your Best Customers – Use analytics to create a profile of your “best” customers based on spend levels, repeat buying, products purchased, demographics, psychographics, and geography.  Leverage this profile to target new prospects that “look like” they have best customer potential
• Cross-Sell/Up-Sell – Apply the above best customer profile to your entire customer base.  This will uncover current customers that can be migrated into best customer status through cross-sell and up-sell marketing initiatives.
• Increase Response/Conversion – A key to marketing success is increasing the response and conversion of marketing programs.  Marketing analytics can impact this success by identifying the most effective customer targets, initiative timing, offer, and media.
• Allocate Marketing Dollars Most Effectively – Oftentimes during the planning process or allocation of marketing dollars, companies will start with the current year as a baseline and layer on planned initiatives.  Critical questions that marketing analytics can answer include how are current initiatives performing and which customers are most valuable?  The answers to these questions can help companies effectively prioritize initiatives and allocate marketing resources.

Everyone is served by applying marketing analytics in the above ways.  Qualified prospects are exposed to products/services that they can use, current customers stay engaged and buy more from you, Marketing departments can deliver more effective programs, and companies experience increased profits.

Tags: Analytics, Marketing, return on investment