The interest in Business Intelligence for the business and marketing departments is well-established. BI allows you to take a company’s strategic foresight approach even further thanks to marketing intelligence.
What is marketing intelligence?
Nowadays, companies have a large volume of data that they can use to facilitate their marketing strategy. However, they struggle to extract usable information that would allow them to improve their customer knowledge and support decision-making. This is mainly because there are a wide range of data sources: loyalty programs, consumer behaviour on the web, geolocation, social media, etc.
Business Intelligence (BI) is therefore essential to centralize, sort and process this data. Marketing intelligence is defined as the implementation of BI in the field of marketing.
What is the difference between strategic foresight and marketing intelligence?
Strategic foresight refers to the analysis of an organization’s external environment. This type of intelligence relies on various data sources to better understand customers, the competition, the distribution network and the company’s technological environment. These sources include industry reports, social media and web browsing data.
Therefore, there are various types of more specific monitoring: business intelligence, competitive intelligence, technological intelligence, etc. In all cases, the aim of this analysis is to identify trends and better understand the market, in order to make better strategic decisions.
Market intelligence is a fairly new, and relatively passive, approach towards strategic foresight. Companies no longer simply monitor their environment, but also try to discover new elements related to their market which were not necessarily foreseeable.
How does Business Intelligence improve marketing?
By drawing on BI, marketing intelligence allows you to harness the full potential of your company’s data and pass them on to the marketing department, as illustrated by these examples of improvements.
Data centralized in an analytical dashboard
For marketing teams, creating dashboards and reports to visualize data is often a waste of time. This is because they often have to deal with scattered, and sometimes incompatible, data sources.
This is where marketing intelligence comes in, which is capable of gathering all data in one place, regardless of their origin: web analytics tools, mailing tools, social media, etc. Sales figures can also be viewed instantly: a way to reconcile the sales and marketing departments.
BI solutions can generate an analytical dashboard that can be viewed at any time, on any device: computer, mobile, tablet, etc. This dashboard can also be customized according to the user’s role or position. Everyone has access to the information they need when they want it.
New sales opportunities
Each contact with a customer is an opportunity to collect valuable information about their purchases, preferences, and habits. This is particularly true in the context of a loyalty program, whether online or offline.
This data can be used to make suggestions for complementary products and services, a concept known as cross-selling. Based on the information collected, it is possible to send targeted offers to existing customers according to their profile. A tailored approach that is much more effective than mass promotional campaigns, thereby leading to a higher conversion rate and increased sales figures.
Business Intelligence makes it easier to personalize these promotional offers by facilitating the automation of data management, which, in turn, ensures that the right message is directly addressed to the right person. In fact, it would be very difficult to send this type of ultra-targeted message using purely manual analyses.
But market intelligence can also reveal other sales opportunities, such as product or service renewal reminders. Business Intelligence tools are able to determine the consumption rate of offers with a cyclical purchase process. By using a marketing automation platform, a promotion can be sent to each customer at the right time to encourage them to repeat their purchase.
New trackable KPIs thanks to marketing intelligence
Business Intelligence allows you to track increasingly complex marketing KPIs that were previously absent from most analytical dashboards.
Growth in sales revenue
The return on investment (ROI) of marketing campaigns is a key concern for managers, who wish to evaluate their impact on the company’s turnover. Marketing is a considerable investment, which must be justified by a high profitability in the short or long term.
Growth in sales revenue refers to the change in sales (increase or decrease) over a set period of time. This KPI is therefore much more than a simple turnover figure, since it allows companies to measure the speed of their development, but also to evaluate the growth of their income in the long term by identifying certain trends.
Based on these projections, companies can set more relevant and, more importantly, more attainable objectives, but also launch new offers that will help them achieve these objectives. Moreover, an increase in growth in sales revenue often means an increase in net profit in the near future.
Sales revenue growth is therefore a key indicator for the company, greatly supporting strategic decision-making.
Customer lifetime value
Customer lifetime value refers to the estimated profit generated by a particular customer throughout their lifespan, i.e., the duration of the relationship between the customer and the company.
Although it is difficult to calculate the CLV in absolute terms, i.e., based on a particular customer, it is quite easy to estimate this figure in relative terms, based on an average of the entire customer base, for example.
In practical terms, the relative customer lifetime value is the ratio of three different measures:
- The average sale per customer.
- The average number of purchases made each year by a customer.
- The average retention time of a customer (in months or years).
This KPI allows the organization to determine the maximum acceptable acquisition cost for a new customer, and thus, to optimize its acquisition strategy. In other words, it determines how much a company is willing to spend to acquire a new customer.
For example, if a company’s average customer lifetime value is €2500, and it costs €3000 to acquire a new customer (due to advertising and marketing expenses, among other things), then it risks losing money in the long term.
The company must therefore adjust its strategy in order to reduce its acquisition costs. It can also implement measures to increase its customer retention rate, and, in turn, extend the duration of its customer retention and CLV.
Net Promoter Score
The Net Promoter Score (NPS) is an easy means by which to estimate and interpret the level of satisfaction of a company’s customers.
It is both a reliable measure of customer retention and a way to improve the customer experience. It can therefore be used as a real driver of growth, by proposing an offer increasingly adapted to customer expectations.
The Net Promoter Score is calculated based on the responses to a single survey question: on a scale of 1 to 10, how likely are you to recommend our company/brand/product to others?
Depending on the score awarded, customers will fall into one of three categories:
- Detractors: dissatisfied customers who award a score of 0 to 6.
- Passive: neutral customers who award a score of 7 to 8. Although these customers are satisfied, they are likely to go with the competition.
- Ambassadors: loyal customers who award a score of 9 or 10 and make regular purchases. They are also powerful sales tools, encouraging other consumers to make purchases.
More specifically, the NPS is calculated using the following formula: % of ambassadors – % of detractors.
An NPS above 50 is generally considered a good customer retention rate and synonymous with great loyalty to the brand. The closer the NPS is to 100, the higher the level of customer satisfaction.
Centralizing data within an analytical dashboard, implementing personalized promotional offers, increasing sales, monitoring complex KPIs… There are many benefits to marketing intelligence! It is therefore essential for companies to integrate BI solutions to effectively manage their marketing strategies and sales performance.
