ROLE OF BUSINESS INTELLIGENCE IN MARKETING Knowledge is profit. As a general rule, the most successful man in life is the man who has the best information. It is the same in case of business organizations; the business which has the best available information always has a sustainable competitive advantage. But there is so much information available and very little time. Business Intelligence helps organizations to make better, faster decisions about their customers, partners, and operations by turning mountains of data into valuable business information.
It helps to bring together information, people, and technology to create successful business strategies and helps to execute those strategies with confidence. Business Intelligence is a broad category of application programs and technologies for gathering, storing, analyzing, and providing access to data to help enterprise users make better business decisions. Its application includes decision support, query and reporting, online analytical processing (OLAP), statistical analysis, forecasting, and data mining. Business Intelligence is the process of enhancing available data into information and then into knowledge.
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It uses knowledge management, data mining and business analysis to identify, track and improve the key processes and data. Business Intelligence is carried out to gain sustainable advantage and also provides valuable core competency in some instances. Companies use Business Intelligence to improve decision making, cut costs and identify new business opportunities. Business Intelligence is more than just corporate reporting, it’s a set of tools to extract data out of enterprise systems Business Intelligence is used to identify inefficient business processes that are appropriate for re-engineering.
Although Business Intelligence holds great promise, implementation of it is very challenging. Executives have to ensure that the data feeding Business Intelligence applications is clean and consistent so that users would trust it. There has been a gradual change in the business orientation of firms over the last 150 years. In 1850’s, companies mostly had production orientation; while the 1900’s formed the era of sales orientation, and the 1950’s saw the arrival of marketing orientation and the 2000’s is the era where the orientation has become vastly customer centric.
This change in orientation has made it very important to capture and utilize information in order to serve the customer in a better way. Technology has changed the way marketing is done, and since the orientation is customer centric it is crucial to capture relevant information and use it to assist in decision making. Now the consumers are well aware of their needs and requisites, they are provided with “choices”. When the competition gets intense, it’s the duty of the marketers to identify and provide what the customer desires.
The role of Business Intelligence becomes vital at this point; it provides the organization a sustainable competitive advantage. Some of the gains, when Business intelligence is applied to Marketing are as follows: ???Understanding customer buying behavior and patterns ???Knowing what motivates customers to purchase the products ???Measuring marketing campaign return on investment (ROI) ???Segmentation of the customer base ???Calculating customer lifetime value ???Identification of most valuable customers ???Measuring cost per lead / customer acquisition costs
Customer Segmentation Customer segmentation involves identification of groups of customers with similar characteristics. Segmenting customers into groups with similar characteristics facilitates detailed analysis of each segment. Customer segmentation can be done using clustering or Chi-squared Automatic Interaction Detector (CHAID) Analysis. Both techniques have specific applications. Customer segmentation provides intelligence regarding customer demographics, customer spending and value by segment, and buying or attrition characteristics per segment.
Customer Buying Behavior Buying Behavior is the decision processes and acts of people involved in buying and using products. If the marketer can analyze what, when, where, and how the customer buys; he can predict how the buyer would react to their marketing strategies. This information enables the organization to market its product prudently. Identification of Valuable Customers A detailed analysis of customer data is needed to understand the value of the customers, their buying behavior, motivators and patterns.
Business intelligence can be gained by analyzing the relationships between various data sets and by performing a regression analysis on certain data sets to view changes over time. It is said that the 80% of profit to any organization is generated by 20% of their loyal customers. So its really important to indentify an organizations loyal customers and serving to their needs. Measuring marketing efficiency An important application of business intelligence with marketing is the measurement of marketing efficiency. It evaluates the success of a marketing campaign.
It is extremely useful for planning future marketing expenses, and allocating budgets. Business intelligence techniques are used to measure marketing program effectiveness, which includes calculations of the cost per lead, cost per sale, cost per online customer acquisition, lead conversion percentage and time, lead value, customer value and site visitor retention. This provides comparisons with industry averages and helps the organization to improve their overall marketing efficiency and return on investments. The competition has increased by times and each marketer is virtually running after the customers.
This change in the orientation was due to the changes in the technology and purchasing power of the customers. Business intelligence helps the organization to foresee the future needs and requirements of both the customer and the market. The information well utilized can act as a tool to win over the competitors and also can act as the source of competitive advantage. In today’s world, its more of “selling an experience”. So the more you are informed about your customers, the better you could be in providing them with an experience.