“Big Data” is a buzzword on everybody’s lips at the moment: This term attempts to convey the huge volumes of data generated each second around the world – for example while surfing the net, posting on social media or doing a spot of online shopping. Accessing masses of information has never been easier. The digital torrent of data, when used correctly, can deliver key insights into consumer wishes, their habits and their purchase behavior. However, how should marketing executives approach the potential offered by this new development at their companies? Do they make use of this information to aid decision-making processes at work? The answer is: in part, yes – yet first and foremost marketing experts rely on personal information sources today when it comes to defining the optimum approach for the future.
Sometimes this could be a video call with colleagues, other times an in-depth meeting with the boss – from a marketing executive’s point of view, information obtained from other people is of great importance when striving to take the right decision. However, their own professional experience is of even greater importance. A total of 90% believe professional experiences can act as an important or even very important barometer when making decisions at work. In contrast, external data is regarded as being slightly less relevant overall. These are the findings of the “Marketing Challenges 2017” study in which around 600 sales and marketing executives in Germany were interviewed between September and November on behalf of the GfK Verein. Companies from nine different industries which employ at least 50 staff were included in the study.
Personal professional experience is ranked first, followed by discussions within a group of colleagues or with employees: Overall, 88% of respondents believe this to be of great relevance, closely followed by exchanging ideas with bosses (87%) and customers (84%). In fifth place is another personal source of information, which actually does not entail any input from others when weighing up what decision to take: Intuition is regarded as (very) important in the decision-making process by more than three quarters of respondents. In actual fact, our inner voice often provides us with the right advice, as determined by the Bremen-based neuroscientist Gerhard Roth. He suggests that our unconscious can process several million pieces of information per second, while our conscious can manage only a fraction of this (c.f. Karrierebibel.de). The high level of practical relevance for intuition as a basis for making decisions at work has also been proven by a study conducted by the Friedrich-Alexander University Erlangen-Nürnberg. The study proved that, in hindsight, decisions were very often adjudged to have been correct when they were taken based on the intuition of an experienced employee. It can therefore clearly pay dividends to listen to our inner voice, especially as emotive factors do not influence it. Rather, intuition feeds off an unconscious combination of our own experience and the information at hand.
In assessing pure facts as a basis for decision-making processes, the information generated within a respondent’s own company is seen as by far the most important factor. Figures and findings obtained by Customer Relationship Management or proprietary sales statistics are regarded by 77% of marketing executives as important or even very important. For firms with more than 250 employees, this rises to 86%. Targeted Internet research follows as the second-most important source of data, cited by just under three quarters (72%) of respondents. Classical media also aid decision-making processes and are used by marketing executives accordingly: In this regard, 57% (and therefore a slender majority) of respondents believe material and knowledge obtained from conferences or seminars, for example, are of great importance. In total, 54% of respondents additionally cited information from trade journals, industry-specific newsletters or similar publications. Market research data is another important fundamental tool: Proprietary studies, whether conducted internally or outsourced, are seen as important or very important instruments by 43% of respondents. The proportion of respondents who see these information sources as being very relevant is significantly higher than is the case with classic media. Relevance for large companies even rises to 50%. When you consider that, in comparison with other data sources, proprietary studies entail not insignificant out-of-pocket expenses, it is little wonder that smaller companies are more reserved in this regard. Analyses or panel data already available from market research institutes are seen as (very) relevant by just under one third (31%) of respondents. In contrast, data from other institutes is regarded as essential in finding solutions to all the questions that arise during a marketing executive’s typical day at work by just one in five (22%) respondents.
Although the diverse range of personal data sources can be regarded as especially important, marketing executives in no way rely solely on discussions, intuition or their own professional experience in their working lives. This is shown by a look at the frequency of use for external data in the decision-making process. Nearly nine in ten German companies (87%) make use of studies, industry reports or information obtained online for this purpose. However, they certainly do not follow this model in every case: 22% of users take advantage of external data for around half of the decisions they take, while for 33% it is less than one in every two decisions. In total, 27% of respondents admitted that they only use external data in the form of relevant studies or analyses for less than one in every ten decisions they have to take. Companies whose approach is fundamentally grounded in using external data for decision making are, in contrast, in the minority at the moment: Only just under one in five (18%) marketing executives who make use of external data claim to follow this approach in every case.
In large firms with 250 employees or more, this information is in greater demand than is the case at smaller companies. For 27% of external data users employed in these large firms, accessing certain external data sources at work on a daily basis is a matter of course . Only just under one in five larger firms make use of external data less frequently than one in every ten occasions, while the remaining respondents factor this information into their decision-making processes on an occasional basis. The type of decision to be made also has a bearing on the frequency of use: For major strategic issues, 42% of external data users take advantage of this source of information for every decision or for at least one in every two decisions. For decisions of lesser importance, the value falls to 34%. Anyone who is therefore considering introducing a new product line, appealing to a new customer group or initiating other similarly important processes evidently relies even more frequently on external information than is the case for small tactical decisions on a day-to-day basis at work.
What connects my customers to the company? What do consumers want in a new product? And what does the purchase behavior of tomorrow look like in the face of ever more innovative technological possibilities? These are just a few of the questions with which marketing executives are confronted every day – near enough regardless of whether they work in the construction industry, services sector, retail or any other industry. In order to position their company well in comparison with the competition, a wide range of data is required. If questions remain unanswered despite the availability of sales statistics or the best efforts of Customer Relationship Management, external data must be used – but from which provider or consultancy firm? Respondents most often turn to Big Data providers such as Google Analytics or Facebook as well as media and advertising agencies: In total, 63% and 62% of marketing executives respectively cited these companies as their preferred partner for the provision of external data, which covers collecting, recording and pooling processes.
Corporate consultancy firms, commissioned by 37% of data users, follow thereafter at some distance, with traditional market research firms further behind at 30%. Social media analysis service providers represent a preferred partner for 26% of marketing executives who make use of external data; self-service providers through which proprietary surveys can be implemented are cited by 23% of respondents. The fact that the users do not want to be left to handle the collection and evaluation of data on their own is evidently an important factor when deciding upon a service provider: Companies known as field and tab institutes, that is market research companies which do not offer a consultancy service, are only taken into consideration by 19% of respondents. Data mining agencies, which evaluate the huge data pools available, rank at the lower end of the scale of partners used (15%). Professional associations bring up the rear in this regard: Only 1% of external data users in marketing circles turn to industry experts for these figures. A difference also emerges between smaller and larger companies in selecting suitable cooperation partners: The latter rely much more frequently on suppliers such as Big Data providers, corporate consultancy firms and traditional market research institutes. However, self-service providers, field and tab institutes and data mining agencies are more regularly commissioned when the focus is on establishing a solid database for corporate decisions. In terms of the decision-making processes at large companies, the data material supplied by professional associations plays next to no part.
Perhaps this could be because these professional associations often do not have the means and resources at their disposal to collect data and then evaluate it promptly. This reveals that the decisive criteria for the future will be speed: after all, every marketing executive featured in this FocusTopic expects that the speed at which company-relevant questions must be answered will increasingly rise. This is little surprise given that companies are already in much closer contact with their customers – often almost right around the clock – than ever before thanks to the possibilities opened up by digital media. However, being available outside of traditional opening times serves to increase the time pressure on employees: In this way, eight in ten experts offered their view that decisions will have to be taken ever more rapidly. Just 13% would tend to disagree with this view, while only 4% of respondents were of the opinion that this speed will not rise at all. In order to provide optimal support to all those who have identified the need for companies to act with greater speed, data must be provided even more quickly in future: 89% of marketing executives affected by this increased pressure on decision-making processes are demanding this for the future, with 41% strongly agreeing on this necessity. In contrast, just 8% of respondents opined that a more rapid provision of information will be of rather subordinate importance. And only 3% totally reject the view that the “delivery time” of data must change in any way at all.
It is highly probable that the wishes of the majority of marketing executives for information to be provided even more quickly will be fulfilled. However, this increased speed will at the same time lead to even more substantial data masses which companies will then have to process. Against this backdrop, new job roles are already being created today, with “data scientist” a particularly key term here. Will this mass of information and the speed at which it is generated alone suffice to guarantee corporate success? John Naisbitt, an American trend researcher, would surely be skeptical of this. After all, he once claimed: “We are drowning in information but starved for knowledge.”
Data source: GfK Verein; series of studies: Marketing Challenges; Data Driven Decision Making, December 2017
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