Marketing: art or science, gut or data?
Marketers who make data their cornerstone make smarter, more profitable decisions. For example, CMOs who track return on marketing investment report 50% more profit growth than those who don’t, according to a CMO survey.
These statistics prove that marketing performance improves significantly when data is at the core. These marketers can also quantifiably prove their contribution to the businesses financial bottom line, rather than just pointing to hits or clicks.
Data-driven is the norm in business today. When asked about their approach to making major decisions, the number one approach is data-driven at 42%, compared with intuitive at 10%, according to a survey of global executives (PDF).
But many marketers still rely mostly on gut, instinct, and creative whims. One result of this is the frequent disconnect between CFOs and CMOs, which is why marketers rarely feel respected at the boardroom table, and often receive less budget then they request.
Business leaders increasingly base their decisions on data because those data-based conclusions are almost always more effective. Decisions based on computer analytics will outperform those based on gut instincts 13 to 1, according to report (PDF).
The reality is that the phrase data-driven marketing is redundant. Marketing should always be data-driven. After all, we don’t say data-driven science. We just say science.
At the same time, gut feelings still play a valuable role in marketing. The most successful marketers today rely on a combination of both instinctual hypothesis and analytical validation. Instinct provides the idea, the numbers prove or disprove it.
For example, we had a hypothesis that our client STIHL was significantly underestimating the number of women customers in its demographics. This hunch was based on the national 50% divorce rate, the number of women who retain ownership of the home after divorce, and other factors.
Our clients thought we were crazy that we believed women were buying their chainsaws. Gut instinct wasn’t sufficient, because if we were wrong we would’ve lost considerable credibility – and possibly our client. So we decided to put our data where our mouth was, and analyze 15 years of customer data.
The result? Our hypothesis was correct. Back to gut instinct: STIHL decided to feature add women to its national advertising, and the change was a great success.
In conclusion, the fact is the future is impossible to predict. That is why the ideal decision-making process blends gut instinct and data-driven analytics. The data drives, then gut decides.