You’d think that high-tech companies would be further along in their use of sales and marketing analytics than companies in other industries. After all, high-tech companies live and breathe technology and have an institutional understanding of data, but while they might be a bit further ahead than some industries, it’s not by much.
ZS and the Economist Intelligence Unit recently looked at the impact of analytics investments across industries, and found that companies’ results thus far have been underwhelming. (And this is an understatement, particularly in an industry that is used to hype with phrases like “super excited” and “hyper growth.”) Nearly three-fourths of survey respondents said that sales and marketing analytics are either “very” or “extremely” important to their companies’ competitive advantage, yet just 2% have managed to generate a “broad, positive impact.”
For tech companies, the sheer availability of data is one of the problems. Whether it’s marketing interactions, sales interactions or customer behavior, there’s no shortage of information. And because it’s easy to capture data and storage is cheap, everyone captures it, but in many companies, no one has taken on the responsibility of holding all of it together and stewarding it, using the same data structure and definitions, and with consistent metrics to measure.
A bigger problem, however, is that analytics success isn’t something you can buy—there isn’t an app for that. Tech companies—and tech executives, in particular—are always keen to find some new application that’s going to solve their problems. There are thousands of companies out there that offer analytics platforms and tools, and companies have spent billions of dollars, yet we’re really not that much better off.
What will help technology companies capture the potential from analytics? I’m sorry to be the party-pooper, but there isn’t a silver bullet. Success requires time, talent and treasure.
Regarding time, companies face a lot of pressure to meet short-term requirements. If someone’s boss is screaming for something in the next quarter or two, even in the current fiscal year, that’s a pretty short window to build a very robust analytics capability, particularly if the company has issues with its data. They might not have clean data, they might not have integrated their data, or they may not even have identified the right data streams. That data effort, itself, could take a year before they can even start applying some of the analytics.
Success also takes talent. Most analytics teams have been built as (or devolved to) a reporting function. Few analytics teams have the ability to engage the marketing and sales teams to understand the context of the business issue and, based on that, identify the data that they’d need in order to address the question with analytics. Overcoming this requires finding those people who are really good at the analytics, people who really understand the business, and that rare intersection of people who understand both (the analytics unicorn).
Of these three precious resources, most companies are constrained in at least one, meaning that they need correspondingly more of the other two, so it’s a question of mapping out the most important questions that you’re trying to answer and then building a road map of how to get there.
Last, executives need to manage expectations. Pick some proof-of-concept project in one area and work on it until you achieve success. That way, you can start to build momentum based on wins, rather than starting a bunch of initiatives in every different part of the company.
For more findings, insights and analysis from ZS’s study, read “Broken links: Why analytics investments have yet to pay off.”