Open your mailbox at home and you’ll likely find a barrage of credit card offers, mortgage pitches and other marketing promotions—evidence of just how much financial services firms are applying data-based marketing these days. That’s primarily on the B-to-C side, however. Financial firms have had far less success using analytics on the B-to-B space, and they’re not alone.
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. 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 financial services firms, data availability is part of the problem. When you have multiple steps in your distribution, you lose a little bit of transparency, and it’s a little harder to understand how decisions get made.
Staff is an issue, as well. There are a lot of people who are really good at math and statistics, and a lot of people who are good at business and who really understand complex distribution systems. But the intersection of those two is a pretty small group, and that’s really what you need to be effective in delivering and acting upon analytic insights.
Culture is a persistent challenge, too. Many firms are risk-averse and hesitant to run tests against a control group so that they can start measuring impact. They think, Even if the test works, it means that I haven’t treated the control group of customers or intermediaries “fairly” because I haven’t allowed them to participate. Companies are more willing to do the basic diagnostic and reporting because they’re safe. You’re just studying the data, so nothing’s at risk.
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How can companies start generating traction? A safe and easy way is to apply analytics to your own sales and service people. It’s a little easier and more data-rich than the end customer—especially if you have a two-step or three-step distribution process—so you can be more willing to experiment. In many ways, these applications can be easier than running programs on customers, where there’s a big regulatory burden regarding the language of consumer-facing marketing and promotional messages, and you can’t make small, quick changes to see what’s working better.
For example, we worked with one firm on a pilot test to get its insurance agents to earn an internal qualification faster. The firm sent targeted emails to a subset of associates and measured what happened next. The emails had a 60% open rate—higher than our benchmark—and associates who received the emails had a 20-percentage-point bump in qualification rates. That translated to hundreds of dollars in additional sales for each associate over a four-week period. Extrapolated to the whole population of agents, it added up to millions in added sales for the year, from a very easy, inexpensive application.
These kinds of sales force and distribution organization applications may not seem as sexy as customer-facing analytics, but they’re a good way to build up expertise without putting customer relationships at risk. And at many firms, they’re leading to real value. What’s more exciting than that?
For more findings, insights and analysis from ZS’s study, read “Broken links: Why analytics investments have yet to pay off.”