Bring Analytics out of the Basement

Analytically-driven marketing is not just about the data and the math. Successful firms of the future will be those that create an analytics culture for marketing that allows the human element to shine through. It’s as much a question of creating the right culture as it is the right data and algorithms.

I recently caught up with Dr. R. Sukumar, CEO of Optimal Strategix to discuss the future of analytics. Despite the overuse of terms such as “Big Data” being thrown around with looser and looser context and the onslaught of analytical solutions guaranteeing a solution to every marketing challenge, Dr. Sukumar sees the human element as ever-present: “There will always be a need for human interaction, particularly with new sources of data. And there will always be a need for human interpretation and application.”

The future isn’t about removing marketers from the decision. It’s about improving their ability to leverage data in order to explore, test and act on their own expertise. The most important element of analytically powered marketing is the human aspect of analytics. All too often, people stereotype marketing analytics as bunch of mathematical equations and software applications. While this is a critical aspect, if you fail to acknowledge the role of marketing and seasoned executives in this effort, your marketing analytics efforts will fall flat every time. In Sukumar’s opinion, “The tools you use should be able to display the information so that a manager can look at the information effectively.”

I witnessed this first-hand early in my career. We started every initiative with a base plan meeting. The purpose was simply to review the raw data with experienced executives in order to make sure that we collected clean, accurate and complete data. But this routine meeting –prior to any modeling – quickly became the most important meeting of the engagement. By charting organized cuts of expansive data sets, the cross-functional team would immediately spot patterns and begin generating dozens of hypotheses. Back then we used pivot tables and eventually some crude, proprietary software. But today with tools such as Tableau, you can quickly dig through data in a visually compelling format to foster rich discussions with seasoned management. “There will always be a need for human interaction, particularly with new sources of data. And there will always be a need for human interpretation and application.”

This conversation naturally lends itself to the need for the right talent in analytics. A firm’s analytics team can’t be reactive, waiting for marketers and executives to tell them what to do. We’re seeing an evolution in marketing analytic professionals and less of a divide between the marketing department and marketing research. The best analytic talent today are behaving more like marketers, and in-turn the best marketers today are more analytics-driven. Sukumar sees this as well noticing, “An analyst working in a vacuum is counterproductive if they do not understand the business problem. Analysts still need to be trained with the end in mind to understand how the insights will impact the business.”

And these skills need to reside high in the organization. If your analytics team doesn’t double as marketers, or if the smartest analytic question your c-suite has is “What’s the r-square?” your organization has an analytics capabilities gap.

Having the right mix of skills working together is critical to getting the best analytics and closing these gaps. But take that mix a step further, and leverage analytics as a creative force. To do this you must rely on two key enablers: live, cross-functional dialogue, and interactive tools. Traditionally, analytics has been conducted in the basement, put into charts, presented to management, received feedback, and repeated until a decision is made. Sukumar foresees that process evolving. “You’re going to see the use of more tools that enable interactive work with leadership versus presenting, going away to run models, and coming back to present again.”

You need to bring the experienced executives and the analytic experts into each other’s environments and enable a fluid dialogue in order to test hypotheses. In some instances this can be done virtually, but I’ve seen it most effective in live work sessions. Additionally, it needs to be supported by tools that do a good job graphically depicting output and quickly rerunning models. Creativity stems from inspiration, and conducting modeling workshops in real-time is remarkably stimulating and leads to disruptive, market-changing ideas.

Successful firms will begin to separate themselves from the pack by bringing analytics out from the backrooms and creating an analytics culture, as Target, MasterCard and H&R Block have proven. There isn’t an analytics “silver bullet.” If you’re waiting for the math to tell you what to do, then you’re not only missing out – you’re likely also getting lost. We’re beginning to hit a point of diminishing returns when it comes to the pure mathematical aspects of analytics. Sukumar agrees saying, “There continues to be improvements in statistical models, but they are marginal and the debate is whether they are even warranted.”

Success in the future resides at the intersection of analytics and strategic skills, and you need it to span all levels. You need to dispel the myth that there are quantitative people and qualitative people, or analytic people and strategy people. Use analytics and software not as a black and white solution, but to facilitate a meaningful, strategic dialogue among management.