Seismic shifts tend to make mountains – not make them disappear. Unless you’re Mountain Equipment Co-op.
After expanding from just six to more the three million members in four decades, the co-operative revised its charter in 2012 to recognize that not every single member is climbing mountains every weekend. Last year, the branding followed suit: Gone was the mountain from its logo, and even from its name, shortened instead to just MEC.
The moves angered the membership’s most hard-core outdoors enthusiasts. But amid the mountain climbers and whitewater kayakers, more casual joggers and yogis were signing up. As a retailer with robust member and sales data, it was a reasonable branding exercise in the face of changing consumer demand.
“The population is very urban, and there’s definitely a shift to doing activities closer to home,” Anne Donohoe, MEC’s chief marketing officer, said in an interview at the co-op’s headquarters in Vancouver’s Mount Pleasant community.
Data-driven decision making is no longer just the job of the IT department. Companies now track information more than ever for customer relationship management. Whether it’s simple demographic and sales information like MEC and other retailers have used for years, or complex “Big Data” such as huge sets of down-to-the-mouse-click digital retail behaviour tracking, data has become a crucial tool for entire organizations to react to customer needs.
Marketing departments are among the first adopters, building quicker and more accurate customer profiles to target people with the right information to get them to buy in.
But the adoption of data mining and analytics, especially in Canada, remains surprisingly slow. Just half of large Canadian companies use data mining, and about a quarter use predictive analytics to anticipate consumer behaviour, according to market research firm IDC Canada. Just 21 per cent of Canadian companies have an explicit strategy for business intelligence and analytics, the firm says.
But with more intuitive user experiences and less capital expenditure needed, demand for data analysis is growing.
For years, Toronto-based InfoTrellis sold master data-management products directly to IT divisions, which could combine databases of information to put into executives’ hands. Today the company offers new products that package numerous social media and Big Data sources together with marketing departments in mind.
“It’s not an IT question any more. It’s a business strategy question,” says Miklos Tomka, InfoTrellis’s vice-president of strategy. “Marketers, heads of operations, strategists – they need to say, ‘Wow, I get it.’”
Marketing executives are “more interested than ever in the valuable new insights revealed by Big Data,” says Michael O’Sullivan, a spokesman for Teradata Corp., a U.S.-based analytics company. “They can be worth millions in economic value, via customer analytics and data discovery. This is profoundly exciting new territory, and companies we work with are proving that the ROI [return on investment] is there.”
Rather than handing the C-suite monthly spreadsheets on customer data, companies can now let any employee have a dashboard to access analytics to measure corporate health and customer behaviour. With that kind of power in everyone’s hands, the work no longer has to fall behind the curtain of the IT departments.
Nigel Wallis, a research director with IDC Canada, calls the trend “the democratization of analytics,” with marketers leading the transformation. “The CMO actually becomes one of the chief data officers for the organization. They aren’t replacing the CIO [chief information officer], but at least they have equal footing.”
Today, MEC can track far more than just customer addresses. It can build highly specific customer profiles, offer targeted products on its website, ship online from the closest retail stores, and add value by showcasing inspirational stories to keep members keen on their outdoor products. “Analytics, and the world of Big Data, is really driving a lot of that,” Ms. Donohoe says.
Ivey Business School professor Niraj Dawar wrote about the importance of harnessing as much data as possible for marketing initiatives in his 2013 book Tilt, published by Harvard Business Review Press.
“I think it’s a huge trend,” he said in an interview. Data analysis companies such as InfoTrellis “have clearly recognized their customers are not just CIOs. They’re people in marketing and the rest of the organization who are trying to recognize and understand their environment, customers, competition and channels.”
With more data in hand, companies can predict what customers will do or buy next based on their behaviour, and market to them with intense precision.
Marketing departments, Dr. Dawar says, “have not always been comfortable with the analytics necessary to use the data appropriately, or at least in depth.” But, he says, companies are building the infrastructure required to fill those gaps.
Renowned Big Data author and professor Thomas Davenport has argued that marketing and Big Data marketing should be considered one and the same. In an interview, he called the gulf between marketing and IT departments “one of the biggest problems companies have in the data analysis space.”
He suggested they work more closely together. “Particularly at the top of marketing organizations, you have a real issue with understanding database decision-making and other things to be successful with marketing analytics,” says Prof. Davenport, who teaches at Babson College in Wellesley, Mass.
Mr. Wallis, of IDC, says companies need to recognize that making this transition isn’t just technological, either.
“When CMOs move toward increasingly using marketing tech, they have to consider management and cultural shifts at the same time and make sure there are no perverse disincentives to do it,” he says.