The Importance of Business Intelligence in Marketing Management

In the past decade, the prevalence of data-driven decisions has increased exponentially in the business world. According to a study conducted by Forbes, 90% of organizations believe that data-driven decision making will be the primary basis of competition, differentiation, and profitability by 2019

(The Power of Data-Driven Marketing, n.d.)

. In order to make data-driven decisions, organizations rely on business intelligence (BI). BI can be defined as “a category of applications and technologies for gathering, storing, analyzing, and providing access to data to help enterprise users make better business decisions”

(microsoft, 2018)

. In other words, BI allows organizations to take data that has been collected and convert it into actionable insights.

There are many different BI tools and techniques that can be used in marketing management. Some examples of BI tools that are commonly used in marketing include customer segmentation, customer profile analysis, customer lifetime value analysis, and marketing mix modeling.

(7 Types of Business Intelligence Tools for Marketing and Sales, n.d.)

BI can be used in marketing to make better decisions about where to allocate resources, what type of campaigns to run, and how to price products or services.

One of the primary benefits of using BI in marketing is that it can help organizations to better understand their customers. By analyzing customer data, organizations can gain insights into customer behavior, preferences, and needs. This type of information is extremely valuable for developing targeted marketing campaigns and tailoring products or services to meet customer needs. Additionally, BI can help organizations to identify trends in customer behavior. This information can be used to develop marketing strategies that anticipate and address changes in customer demand.

Another benefit of using BI in marketing is that it can help to improve the efficiency and effectiveness of marketing campaigns. By using BI to track the performance of marketing campaigns, organizations can identify which campaigns are most effective and adjust their budget and resources accordingly. Additionally, BI can be used to automate marketing tasks such as email marketing, social media marketing, and lead generation. This can free up time for marketing professionals so that they can focus on more strategic tasks.

Finally, using BI in marketing can help to improve decision making. BI provides marketing professionals with access to a wealth of data that can be used to inform marketing decisions. By analyzing data, marketing professionals can identify opportunities and optimize their strategies to achieve their desired results.

Overall, BI is a valuable tool that can be used in marketing to improve customer understanding, campaign efficiency, and decision making. To learn more about BI and how it can be used in marketing, check out our blog post on the topic.

Customer Segmentation

One of the most popular applications of business intelligence in marketing is customer segmentation. Customer segmentation is the process of dividing customers into groups based on shared characteristics.

(What is Customer Segmentation? n.d.)

This technique can be used to identify groups of customers that are most likely to purchase a product or service, or that are most valuable to the organization.

There are a few different methods that can be used to segment customers. The most common methods are demographic segmentation, psychographic segmentation, and behavioral segmentation.

Demographic Segmentation

Demographic segmentation is the process of dividing customers into groups based on factors such as age, gender, income, education, and location.

(What is Demographic Segmentation in Marketing? n.d.)

This technique is often used to identify groups of customers that are most likely to purchase a product or service. For example, a company that sells baby products may use demographic segmentation to target mothers of young children.

Psychographic Segmentation

Psychographic segmentation is the process of dividing customers into groups based on factors such as lifestyle, values, and personality.

(What is Psychographic Segmentation? n.d.)

This technique is often used to identify groups of customers that are most likely to be interested in a product or service. For example, a company that sells environmentally-friendly products may use psychographic segmentation to target customers that are concerned about the environment.

Behavioral Segmentation

Behavioral segmentation is the process of dividing customers into groups based on their past behavior.

(What is Behavioral Segmentation? n.d.)

This technique is often used to identify groups of customers that are most likely to purchase a product or service. For example, a company that sells products for people with allergies may use behavioral segmentation to target people who have previously purchased allergy-related products.

Customer Profile Analysis

Customer profile analysis is a technique that can be used to develop a detailed understanding of an organization’s target market.

(What is a Customer Profile? n.d.)

This understanding can be used to develop targeted marketing campaigns and optimize the sales process.

Customer profile analysis typically begins with the development of buyer persona. A buyer persona is a fictitious character that represents a customer segment.

(What is a Buyer Persona? n.d.)

This character is developed by considering the characteristics of the customer segment, as well as the needs, wants, and behaviors of the segment.

Once a buyer persona has been developed, a customer profile can be created. This profile will include information such as the customer’s demographics, psychographics, and behavior. Additionally, the customer profile will include information about the customer’s needs, wants, and pain points. This information can be used to develop targeted marketing campaigns and optimize the sales process.

Customer Lifetime Value Analysis

Customer lifetime value (CLV) is the net revenue that a customer will generate over the course of their relationship with an organization.

(What is Customer Lifetime Value (CLV)? n.d.)

CLV is a valuable metric for organizations because it can be used to determine which customers are most valuable to the organization and to identify opportunities to increase customer lifetime value.

CLV can be calculated using a variety of methods. The most common method is to:

1. Identify the average purchase value
2. Identify the average number of purchases per year
3. Identify the average customer lifespan
4. Multiply the average purchase value by the average number of purchases per year
5. Multiply the result by the average customer lifespan

This calculation will give you the average customer lifetime value. To calculate the CLV for a specific customer, you will need to know the customer’s purchase history.

Once you have calculated the customer’s lifetime value, you can use this information to optimize the marketing campaigns that you run for this customer. For example, if you know that a customer has a high lifetime value, you may want to invest more in marketing to this customer. Additionally, you can use this information to identify opportunities to increase customer lifetime value.

Marketing Mix Modeling

Marketing mix modeling (MMM) is a technique that can be used to optimize marketing spend.

(What is Marketing Mix Modeling (MMM)? n.d.)

MMM uses historical data to identify the marketing mix (i.e., the combination of marketing tactics) that is most effective at achieving desired outcomes.

MMM typically begins with the development of a marketing mix model. This model is used to identify the relationships between marketing inputs and desired outputs. Once the model is developed, historical data is fed into the model. This data is used to identify the marketing tactics that are most effective at driving desired outcomes.

MMM can be used to optimize a variety of marketing activities, including advertising, branding, pricing, and promotions. Additionally, MMM can be used to optimize marketing budgets. By using MMM, organizations can ensure that they are getting the most bang for their buck when it comes to marketing spend.

Business intelligence is a valuable tool that can be used in marketing to improve customer understanding, campaign efficiency, and decision making.

The Power of Data-Driven Marketing

Data-driven marketing is the process of making decisions based on data. This data can come from a variety of sources, including customer surveys, marketing campaigns, website analytics, and social media.

Data-driven marketing has a number of benefits. First, it allows organizations to make more informed decisions. By basing decisions