Blue Chipper and Marketing Analytics
November 9, 2016
I think this write up “Reporter’s Notebook: McKinsey’s Heller Talks Analytics” is a summary plus odds and ends based on a McKinsey blue chip consultant’s lecture. McKinsey prides itself on hiring smart people, and it does some crafty buzzwording when it makes the obvious so darned obvious.
I noted this passage:
CMOS are asking: Do we have enough data scientists? Are we accelerating customer acquisition? Are we increasing customer value? What they care about is taking the intense amount of data that happens every day from call centers, Web sites and stores, then stitching it together and identifying new customer segmentation and new opportunities to create growth. The CMO is thinking about data science — how it can drive growth about the organization.
The idea is that federating disparate information is important from McKinsey’s point of view.
How does a marketer deal with data in a way that makes revenue? I highlighted this MBA formula: Get organized, plan, and hire McKinsey to help. The 4Ds will help too:
- “Data. Aggregate as much information as possible and everything you do downstream creates more value.
- Decisioning. Run advanced models — propensity models, churn models — against that data. You don’t become a data scientist overnight. The organization needs to do customer scoring and advanced analytics. Identify where the data fiefdoms are in your organization (people holding on to their data to protect their jobs) and get the right people together.
- Design. Managing the content, offers and experience the customer receives and being curious and experimenting. Testing. A/B testing. Once you have the models, what are the experiences these customers want to see?
- Distribution. Push both the decision data and test design into marketing. Close the loop and measure everything. If I’m in a room of marketers and I ask them what their roles are, they’re distributing marketing communications, just not in a truly data-driven way.”
But the marketing officer must embrace the five core beliefs behind “mobilization.” I bet you are eager to learn these five insights. Here you go:
- “Mobilize cross-functional leaders around the opportunity. The CMO needs CIO, store operations, different people to help break down the silos.
- Get creative about navigating the legacy … be relentless about solutions.
- Walk before you run. Identify a roadmap, pick some high priority areas and execute.
- Prioritize “lighthouse” projects to kick-start execution.
- Let data activation drive your new marketing operations model.”
What’s the payoff? Well, for McKinsey it is billable hours. For the client:
We see real aggressive growth with clients doing nothing wrong in the range of a 6X revenue capture. If I can increase the speed by which you test, you’re increasing revenue . Typically conversion rate increases from the low end of the 20s to high end of 150 percent plus range … on the digital sales side yield exponential gains of 2, 3, 5X. Just 1 percent, 2 percent or 3 percent of enterprise value creation for a multi-billion company — driven by digital — is huge.
Huge? That seems to be a trendy word. Where have I heard it before? Hmmm. Will McKinsey guarantee the measurable benefit of its consultants’ work? My hunch is that McKinsey sends invoices; it does not write checks when its work wanders a bit from the data in a presentation.
Stephen E Arnold, November 9, 2016
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