Know your customer!
It’s not often we talk much about marketing here at Reed Business School, as it is commonly seen as a distinctly different business area from accounting and finance. However, consumer […]
It’s not often we talk much about marketing here at Reed Business School, as it is commonly seen as a distinctly different business area from accounting and finance. However, consumer spending does make a nice overlap between the two areas, and we always encourage our students to have a good understanding of business as a whole.
A beginner’s lesson in buyer behaviour theory will tell you that the way individual consumers make purchasing decisions is often very different to how those buying on behalf of a businesses do. But latest thinking draws more parallels between the two, and we can all look to learn from it – whether we’re buying or selling.
Understanding shopping habits
Individual consumers are a growing enigma. A typical purchasing decision may include a trip to a bricks and mortar store, a call with a customer service advisor, conversations with acquaintances, plus hours of online research. Shoppers may use a combination of methods on some days, while on other days, they may decide very quickly and only use one channel.
But with more data available online for shoppers to make direct comparisons – many say that consumers are starting to act more like businesses in wanting to get the best value they can from any purchase, and are prepared to shop around to do so.
Businesses as consumers?
Just like consumers who may spend hours researching the best products and sellers to get the best deal, it’s now becoming easier for sellers to research and influence their customers – whether individual consumers of businesses purchasers. Many of us have online profiles in one way or another, and tracking usage of these can help companies target us with relevant advertising. It’s becoming easier to identify key decision-makers (buyers) within businesses via social media, so savvy companies are now treating them in a similar way to normal consumers with targeted advertising – blurring the lines between B2B and B2C marketing.
With so much data now available for customers and businesses, there is a huge opportunity for brands and retailers to delve deep into the complexities of their shopper profiles to deliver insight back to their teams. BUT, having the right information and knowing what to do with it is vital. One way Finance professionals and Marketers can work more closely together to ensure greater profitability (from a seller perspective) is using hard data to measure return and success.
The marketing challenge
New research reveals that up to a quarter of campaigns are still being executed without any shopper marketing strategy, and such campaigns are likely to be ineffective when influencing sales. 82% of marketers believe they are failing to measure marketing ROI in an effective way, most notably due to lack of access to good data, time pressure and the complexity of campaigns.
When asked which areas of campaign spend they currently measure, a staggeringly high percentage of marketers answered “don’t know”, indicating the difficulty in capturing, cleansing, aggregating and publishing procurement data.
Marketing technology
In response to this need for data and insight, the marketing technology sector has exploded onto the scene. There are now close to 4000 software providers and this is increasing by around 80% year on year – a potential headache for both marketers and finance professionals looking to get the best value, and ultimately best profitability for their business!
For some businesses, marketing technology budgets are surpassing advertising budgets as they attempt to harness and use all their data to inform their marketing strategies.
The need to justify campaign spend is a massive priority in the current climate and as Marketers come under boardroom pressure to drive top line growth, more investment in data science and technology must be made to confront this challenge head on. So, accountants with a commercial focus should start making friends in their relevant marketing departments if they really want to make a difference in their business!
