EVANSTON, Ill., June 27, 2016 /PRNewswire/ -- Companies across industries admit to the growing importance of data analytics to improve sales and marketing effectiveness and decision-making. However, many struggle to piece together siloed data, properly define the problem or design the solution. As a result, they often fail to realize widespread business impact from their efforts, according to a study conducted by The Economist Intelligence Unit (EIU) and sponsored by global sales and marketing firm ZS.
The study, "Broken links: Why analytics investments have yet to pay off," found that 70 percent of respondents described sales and marketing analytics as "very" or "extremely" important to their organization's competitive advantage, and 52 percent said their organizations invest heavily in analytics. But only 2 percent believe that transformations in their sales and marketing analytics capabilities thus far have had a "broad, positive impact" on their company.
"While nearly all companies invest in analytics, few organizations are getting it right and generating meaningful business impact," said Dan Wetherill, an associate principal on ZS's Analytics Process Optimization (APO™) team and leader of this study. "Our study indicates that strong collaboration between executives and analytics professionals and a willingness to embed analytics processes more closely into the fabric of the business can help companies increase customer engagement and profits."
The EIU surveyed nearly 450 U.S.-based senior executives across industries to assess the current state of sales and marketing analytics, as well as the obstacles that companies face as they seek leading-edge analytics capabilities and better customer insights. The study also included desk research and interviews with senior corporate executives from Starwood Hotels, JPMorgan Chase, GlaxoSmithKline, Johnson & Johnson Consumer Group of Companies, MetLife and Astellas Pharma.
"As our research illustrates, there's been substantial progress on the technology side of sales and marketing analytics," said Gilda Stahl, the EIU's managing editor of content solutions. "On the business side, however—i.e., making sure the organization actually uses and benefits from this capability—companies are still struggling. Those who get it right in the near future will have an important competitive advantage."
Limited integration of big data infrastructure and analytics capability
The primary reason companies use analytics is to optimize customer engagement, according to the study. More than 70 percent of executives surveyed described customer engagement as a "very" or "extremely" important objective for sales and marketing analytics.
"Customer engagement is made possible through personalization, which is possible with effective analytics," Wetherill said. "To get it right, though, and to make personalization meaningful, companies must break down data silos and leverage analytics capabilities effectively."
Beyond breaking down data silos, companies also must start putting their big data stores to use. According to the study, more than 90 percent of respondents have invested in cloud-based big data infrastructure or are planning to do so, yet only 8 percent have fully integrated it into their analytics capability.
Domain expertise key to successful analytics
As companies seek to develop advanced analytics capabilities, they recognize that analytics producers' domain expertise is crucial. Seventy-three percent of respondents said that domain expertise—understanding the environment in which the business operates and what it needs to succeed—is "very" or "extremely" important to sales and marketing analytics' ability to meet the needs of the business's analytics consumers.
"Companies need domain expertise to achieve strong analytics outcomes from the areas where technology and business need to interact most: at the front and back ends of the value chain," Wetherill said. "Analytics professionals need to understand the business in order to accurately define the problem or business need, effectively design the solution, and then deliver the resulting insights in a way that more systematically drives impact and change."
Moreover, while companies understand the need for advanced analytics, two-thirds of executives surveyed do not have sufficiently trained employees to maintain this capability. The survey found that almost all executives outsource at least part of their analytics program, and this trend is expected to continue over the next two years.
For more information about the study conducted by the EIU and sponsored by ZS, access the report, infographic and full survey findings. View industry-specific insights here: pharmaceuticals, medical devices, high-tech and telecommunications, financial services, and travel and transportation.
About The Economist Intelligence Unit
The Economist Intelligence Unit is the world leader in global business intelligence. It is the business-to-business arm of The Economist Group, which publishes The Economist newspaper. The Economist Intelligence Unit helps executives make better decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies. More information can be found at www.eiu.com or www.twitter.com/theeiu.
ZS is the world's largest firm focused exclusively on helping companies improve overall performance and grow revenue and market share, through end-to-end sales and marketing solutions—from customer insights and strategy to analytics, operations and technology. More than 4,500 ZS professionals in 22 offices worldwide draw on deep industry and domain expertise to deliver impact for clients across multiple industries. To learn more, visit www.zsassociates.com or follow us on Twitter and LinkedIn.
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