Analytics in Functional Areas
- 1. ANALYTICS IN FUNCTIONALAREAS Course Code : COB204B51 Credits :4 Hours : 60
- 2. LEARNING OBJECTIVE Analytics in different domains Analytics in different functional areas. Analytics Applications in business To equip students with basic knowledge of
- 3. Course Outcomes Apply analytical techniques in marketing and sales to maximize customer lifetime value and business value Make use of HR analytics to facilitate better workforce planning and talent acquisition Analyze time- series data and evaluate the risk-reward trade-off using finance analytics Solve supply chain problems by applying optimization and simulation techniques
- 4. COURSE CONTENTS No. TITLE Unit - I Marketing Analytics Unit – II Human Resource Analytics Unit - III Finance Analytics Unit - IV Supply Chain Analytics
- 6. Root Cause Analysis Examples Example #1 Suppose the sales manager at XYZ company needs to figure out the reason for the sales performance gap of a particular team in the recent quarter. She decides to conduct the Root Cause Analysis on the sales team’s performance. She goes through the data of the past six months to understand the trend of the sales and creates the fishbone diagram for the same. The sub-causes include: 1. Inefficient sales team and team-leader 2. High targets 3. Demotivated sales executives 4. High level of competition The purpose was “How to reduce the sales gap?” On examining the information so acquired, she found that the root cause is the team leader’s inefficiency in motivating the sales executives and providing unrealistic targets to them. Moreover, the team leader pressured the team with penalties and offended them in other ways. This resulted in a demoralized, non-performing, and inefficient team. In turn, the demotivated sales team were ineffective in convincing the customers. They took no interest in understanding the customer’s requirements. Thus, the unsatisfied customers moved to the competitors. Therefore, the prominent solution so derived is to counsel or replace the team leader. And also, motivate the team members by training them and fostering a supportive work environment.
- 13. Pedagogical tools PPT Interactive Video Case study Root cause Analysis – Problem solving by using critical thinking ability
- 14. BLUE PRINT Unit Hours Allotte d in the Syllabu s No. of Questions & Marks Distribution Part A (No. of Questions ) Total Marks Part B (No. of Questions ) Total Marks Part C (No. of Questions ) Total Marks I 15 2 04 1 5 1 12 II 12 3 06 2 10 2 24 III 13 2 04 2 10 1 12 IV 20 3 06 2 10 1 12 Total 60 Hours 10 (includin g Choice) 20 (Marks including Choice) 7 (includin g Choice) 35 (Marks including Choice) 5 (includin g Choice) 60 (Marks including Choice)
- 15. BOOKS FOR REFERENCE 1. 1. Sunil, C., & Peter, M. (2013). Supply Chain Management: Strategy, Planning, And Operation, 5/e. Pearson India. 2. 2. Robert S. Kricheff,” Data Analytics for Corporate Debt Markets: Using Data for Investing, Trading, Capital Markets, and Portfolio Management,”FT Press Analytics. 3. 3. Christopher N. Chapman and Elea McDonnell Feit, “R for Marketing Research and Analytics 2015 Applications Paperback, Sage Publications India Private Limited; 1st edition. 4. 4. Tony Miller (2016), HR Analytics and Innovations in Workforce Planning (Human Resource Management and Organizational Behaviour Collection), Business Expert Press.
- 16. MARKETING ANALYTICS Definition Nature and scope The Marketing Process Customer Life Time Value Marketing Metrics Introduction to Segmentation Market Analytics Customer Analytics
- 17. Marketing Analytics Modern marketing is a data-driven process fueled by analytics. Without analyzing relevant key performance indicators (KPI), businesses can't tell whether their marketing efforts are providing the expected return on investment (ROI). Marketing analytics is the key to evaluating past performance and determining how to improve it going forward.
- 18. ROI According to a survey of senior marketing executives published in the Harvard Business review,” more than 80% of respondents were dissatisfied with their ability to measure marketing ROI.”
- 19. MEANING Marketing analytics is a set of technologies and methods used to transform raw data into marketing insights. The goal of marketing analytics is to maximize ROI from an enterprise's marketing initiatives. Marketing analytics encompasses tools for planning, managing, and evaluating these efforts across every channel. Marketers use established business metrics, and sometimes create new KPIs, to measure the success of their organizations' marketing initiatives. These metrics include: •Profitability segmented by demographic •Blend rate •Customer lifetime value •Customer satisfaction •Public perception
- 20. BRIEF NOTE Marketing analytics is the study of data to evaluate the performance of a marketing activity. By applying technology and analytical processes to marketing-related data, businesses can understand what drives consumer actions, refine their marketing campaigns and optimize their return on investment.
- 21. DEFINITION According to Merriam-Webster, market analysis is: “a phase of marketing research conducted to determine the characteristics and extent of a market” On the other hand, Alexa defines market analysis as: “a quantitative and qualitative assessment of a market. It examines the market size, various market segments, customer buying patterns, the competition, and the economic environment” In both cases, it’s clear that market analysis is a tool used to assess or characterize a market.
- 24. THE SCOPE OF MARKETING ANALYTICS Assessing marketing campaigns: Marketing Analytics tools provide precise information about campaign performance along with determining areas of improvement if any and predicting how they would perform in the future.
- 25. Competitor assessment: Tools help to understand if the competitor campaign is doing better and why it is doing better. It helps to understand what competitors are doing right and if they are using certain channels that might garner more campaign success.
- 26. Assessing the company that has initiated the marketing campaign: Finally, it allows you, the campaign originator to reflect as an organization if the marketing resource allocation is appropriate or not. It also helps in understanding next steps that need to be taken allowing to reshuffle priorities. Lastly, it helps to understand if money and time are being immersed in the right marketing mediums.
- 33. MARKETING PROCESS Can you just make a product without any research and start selling it?
- 34. ANSWER Technically, you can, but it is only possible if you are offering something people consume on a regular basis, such as FMCGs, eatables, etc.
- 35. QUESTION – SALES IS GOOD! you had proper research; you identified the needs of a specific group of people and then offered a solution accordingly.
- 36. MEANING The marketing process, in simplest words, involves everything from need identification to customers’ satisfaction. The marketing process is used to analyze the various opportunities that are available in the marketplace to exploit profitable gaps. It aims to select the target markets and then develop a smart marketing strategy and then contribute to the management of the efforts in marketing.
- 41. In marketing, customer lifetime value (CLV or often CLTV), lifetime customer value (LCV), or life- time value (LTV) is a prediction of the net profit contributed to the whole future relationship with a customer. The prediction model can have varying levels of complexity and accuracy, ranging from a crude experiential to the use of complex predictive analytics techniques. Customer lifetime value can also be defined as the monetary value of a customer relationship, based on the present value of the projected future cash flows from the customer relationship. Customer lifetime value is an important concept in that it encourages firms to shift their focus from quarterly profits to the long-term health of their customer relationships. It’s still important to find new customers for the growth of the company, but optimizing the lifetime value of existing customers is also essential for a company to sustain a viable business model.
- 42. Definition Customer Lifetime Value or CLTV is the present value of the future cash flows or the value of business attributed to the customer during his or her entire relationship with the company.
- 45. COFFEE SHOP A coffee shop is a perfect starting example for CLV, as it is easy to understand even if you don’t have an extensive business background. Let’s say a local coffee chain with three locations has an average sale of $4. The typical customer is a local worker who visits two times per week, 50 weeks per year, over an average of five years. CLV = $4 (average sale) x 100 (annual visits) x 5 (years) = $2,000
- 46. It is a prediction of the net profit contributed to the whole future relationship with a customer.
- 47. For example, let’s say you run a Health Club where customers pay Rs 1000 per month and the average time that a person remains a customer in your club is 3 years. Then the lifetime value of each customer is (according to the formula above) Rs 1,000 per month x 12 months x 3 years = Rs 36,000. This means each customer is worth a lifetime value of Rs 36,000. Once we calculate CLTV we know how much the company can spend on paid advertising such as Facebook ads, YouTube ads, Google Adwords etc. in order to acquire a new customer.
- 48. For the last example, let’s assume an online video streaming service has multiple price plans, but the average customer spends $17 per month. Customers typically subscribe for three and a half years and use automatic monthly payments. CLV = $17 (average sale) x 12 (annual purchases) x 3.5 (years) = $714
- 49. CONCLUDE CLV is the Key Performance Indicator that determines the value of a customer. With this, you will be able to determine how much you can spend to attract customers for the long run while taking into account repeat purchases of the customer.
- 50. Customer Lifetime Value is an important metric as businesses would want to think about the overall market spending. CLV helps businesses make important decisions about different departments like- sales, marketing, product development and customer service and support. Marketing: What amount of money will be spent on acquiring a new customer? Product: What changes in the product will best suit the need of the customers? Customer support: How much money needs to be spent to acquire talented customer support staff, so they provide perfect customer service? Sales: What types of a customer should sales workers spend the most time on trying to acquire?
- 51. Importance of Customer Lifetime Value (CLV) It predicts real- time ROI Helps enhance marketing retention strategy Create an effective message for the target audience Helps in understanding customer behavior A better output from customer support
- 52. What is meant by customer lifetime value? Customer lifetime value refers to the entire amount a business earns from the average customer over the course of their relationship with the business. What is customer lifetime value, and why is it important? Customer lifetime value represents the total earnings from a customer over the duration of their relationship with the business. This helps a company forecast profitability, set customer acquisition budgets and determine goals for growth and improvement.
- 53. MARKETING METRICS “If you can’t measure it, you can’t improve it.”
- 54. MEANING Marketing metrics are values marketers can monitor to measure the performance of their campaigns. These values can tell how effectively your marketing efforts are leading audiences to take actions that generate value. But blindly measuring any metric can present a partial or skewed picture of how things really are. Marketing metrics tell marketers what data to collect and analyse. The marketing metrics measure should differ based on the channels, goals, and formats of your campaigns.
- 55. Marketing metrics should consider tracking General metrics Retention metrics SEO metrics Paid ad metrics Email metrics Social media metrics
- 56. a. General metrics -1. Revenue growth Revenue growth is the difference between two revenue numbers. For example: before and after a marketing campaign. How to calculate it Revenue Growth (%) = ((Revenue at end - Revenue at start) / Revenue at start) × 100
- 57. 2. Customer Acquisition Cost (CAC) CAC is the amount it takes your business to acquire a customer. The lower the number, the better. It’s primarily used in relation to other metrics like lifetime value (more on that later) to work out how much you can afford to acquire additional customers in the future. How to calculate it CAC = Total amount spent on marketing / Number of new customers acquired
- 58. 3. Conversions A conversion happens when a visitor to your website completes an action that you are tracking. Examples include sign-ups, demo bookings, and purchases. Tracking conversions allows you to see where customers are completing key actions in their customer journey. How to calculate it In Google Analytics, you can set up Goals and then track conversion rate (the percentage of people completing an action) across your site. In the image below, we can see which pages visitors land on before purchasing a product. We can also see the conversion rate and the revenue attributed to the conversions:
- 60. 4. Share of Voice (SOV) Share of voice tells you how visible you are compared to competitors. Market share and share of voice are closely tied to one another. If you’ve got a 20% share of voice, you’re likely to have a similar market share. That means SOV can be an indicator of future growth. How to calculate it Share of voice = Brand visibility / Total potential visibility
- 61. It’s not practical to measure SOV for multiple channels simultaneously, so you’ll need to calculate it on a channel-by-channel basis. Here’s how to do it for organic search: Create a list of important keywords Add them to Rank Tracker Go to the Competitors report Check the Visibility column
- 62. 5. Return on Investment (ROI) ROI is a measure of the impact a campaign or channel had on the revenue of the business. How to calculate it ROI = (Revenue attributed to marketing spend - Marketing spend) / Marketing spend The higher the number, the better the ROI. ROI is easiest to calculate through channels like paid advertising, where advertising pixels can effectively track the journey from lead to customer.
- 63. b. Retention metrics Marketing isn’t only about attracting new customers but also retaining existing customers. The longer you keep a customer, the more profit you’ll make from them. 6. Churn rate Churn is the rate at which customers stop paying you. How to calculate it Churn rate = (Revenue lost during period / Revenue at start of period) x 100
- 64. 7. Lifetime Value (LTV) LTV shows how much on average a customer pays you across their whole relationship with your business. How to calculate it For an ecommerce business: LTV = Avg. Order Value x Avg. Annual Purchase Frequency x Avg. Customer Lifespan
- 65. 8. Net Promoter Score (NPS) NPS is a widely used metric to measure customer satisfaction levels. Dissatisfied customers will often give low scores indicating that they’re likely to churn in the future. How to calculate it NPS = Percentage of Promoters - Percentage of Detractors Using a single strictly-defined survey question, NPS asks: ‘How likely are you to recommend {Company Name} to a colleague?’
- 68. 9. Repeat Purchase Rate Repeat Purchase Rate is the percentage of customers who buy from you more than once. It’s widely used in ecommerce to predict how effective a business is at retaining customers. How to calculate it Repeat Purchase Rate = Number of customers who more than once / total number of customers
- 69. 10. BRAND MENTIONS Brand mentions show you how frequently you’re part of the conversation in your industry. When a web page mentions your company or closely related terms like prominent employees (in relation to their work), you have received a brand mention.
- 70. SEGMENTATION
- 71. DEMOGRAPHIC SEGMENTATION: Definition: Demographic segmentation groups customers and potential customers together by focusing on certain traits such as age, gender, income, occupation & family status.
- 72. Examples Mercedes or Ferrari has income based segmentation Toothpaste brands life-cycle based segmentation Gillette has gender based segmentation
- 76. GEOGRAPHIC SEGMENTATION It divides the market into graphical units such as nations, state, regions, countries, cities, neighborhoods. The main purpose is to operate in single or multiple areas considering the local variations of the selected areas.
- 78. PSYCHOGRAPHIC SEGMENTATION Psychographics is the science of using psychology and demographics to better understand consumers. In this segmentation, buyers are divided into segments on the basis of personality traits, lifestyle, or values. Demographic data explains “who” your potential consumer is, psychographic data explains “why” they purchase. VALS Framework is one of the popular psychographic measurement tool. VALS Framework groups eight segments; Thinkers, Achievers, Experiencers, Believers, Strivers and Makers.
- 80. EXAMPLES Specialization focused Luxury Mobile Manufacturing Brand Car companies focuses on psychographic segmentation.
- 81. A common example of psychographic segmentation is a luxury mobile- manufacturing brand that specializes in customization. These mobiles are not available for people from every class. A certain standard of living and family income is essential to be able to purchase an expensive mobile that is customized for each customer. By using psychographic market segmentation, the marketing team of this mobile-manufacturing brand can divide the target market according to their social status first and then on the basis of lifestyles, attitudes, or personality. They can also evaluate the same variables for their competitor’s target market as well for the better selection of a market for their branding activities.
- 83. WHAT IS BEHAVIORAL SEGMENTATION? These segments could include grouping customers by: Their attitude toward your product, brand or service; Their use of your product or service, Their overall knowledge of your brand and your brand’s products, Their purchasing tendencies, such as buying on special occasions like birthdays or holidays only, etc. Behavioral segmentation refers to a process in marketing which divides customers into segments depending on their behavior patterns when interacting with a particular business or website.
- 85. Apple customers are brand conscious and loyal and Apple has behavioral segmentation.
- 90. Which tools do I need for behavioral segmentation? Behavioral segmentation starts with creating user profiles. Your website analytics Browsing history Cookies Search history Purchase history Social data Login details App data IP addresses
- 93. Demographic segmentation – age, gender, life cycle stage (teenage years, adolescence, parenthood, retirement, etc.), income, social class Geographic segmentation – depending on your product and offer it can be region, country, state, province, city, or even local neighborhood Psychographic segmentation – lifestyle, personality, values Behavioral segmentation – occasions, benefits, user status, usage rate, brand loyalty, buyer-readiness stage, and attitude
- 95. WHAT IS CUSTOMER ANALYSIS? Customer analysis is the practice of using qualitative and quantitative data to gain insight into your customers. The goal is to understand their wants, needs, pain points, and objectives. At the same time, customer analysis helps us understand what drives people to make a purchase, how and when these purchases happen, the frequency of these purchases, and other relevant information.
- 96. 1. Segment the Customers You Already Have 2. Talk to Customers to Find Out what Makes Them Tick 3. Use Existing Customer Feedback 4. Communicate with Your Team 5. Leverage Analytics 6. Create Buyer Personas 7. Use the Customer Analysis Results and Your Personas Across the Entire Company 8. Based on the Research, Decide which Segments and Personas Should Be Your Focus 9. Remember that This Is an Evolving Environment
- 100. Customer Analysis “If you are not taking care of your customer, your competitor will.”
- 102. #1. MIXPANEL Mixpanel is trusted by over 26,000 companies worldwide, making it one of the best analytics tools out there. Mixpanel allows you to understand how your customers are interacting with your product, which features do they use most often, who are your power users, and other crucial data.
- 103. #2. GOOGLE ANALYTICS One of the most famous customer analytics tools on our list is Google Analytics. Google Analytics is used by over half of the website owners (55.6% of all the websites) and is a great way to find key customer data points for your website and app.
- 104. #3. KISSMETRICS An easy to use the platform, Kissmetrics is designed with marketing and sales teams in mind. Kissmetrics provides in-depth analysis of customer journey by tying data to a real person. Track customer journey Track new subscriptions- Revenue . Identify power users and the features they most use.
- 105. #4. WOOPRA Trusted by over 5000 companies worldwide, Woopra is an end-to-end customer journey analytics that allows brands to track, analyze, and optimize the customer journey. Analyzing various touchpoints of customer interaction, Woopra tracks how visitors are browsing your website or app and provides amazing reports regarding the same.
- 106. #5. HOTJAR With a whopping 500,000 users in 184 countries, Hotjar is a popular customer analytics tool and conversion rate optimization tool. Providing more than just numbers, Hotjar makes it easy to see for website owners to see how customers are actually interacting with your website via heatmaps and screen recordings.
- 107. #6. ZOHO PAGESENSE Track, analyze, and optimize your website and apps based on crucial behavioral data from Zoho Pagesense. Quickly see how visitors are interacting with your website and why visitors behave in a certain way to make better business decisions.
- 108. #7. CRAZYEGG Crazyegg is another great customer analytics tool, thanks to its amazing heatmapping feature. Businesses use Crazyegg to see where their website visitors often click, what pages and posts they visit, how far they scroll on a particular page, and at what point do they leave their website.
- 109. #8. BRAND24 an online reputation management tool that lets you monitor your business online in real-time. Track your brand across social media, blogs, news, podcasts, forums, videos, and more, and keep an eye out on everything that’s happening around your brand. Brand24 helps users understand their customers better by giving them insights into what they are talking about.
- 110. #9. BRANDWATCH Brands can benchmark their performance against their competitors and see their strategy, uncover opportunities, and analyze risk before a crisis happens. Automatically segment and analyzing consumer conversations online and make data-based strategies to improve customer experience.
- 111. #10. SPROUT SOCIAL If you want to understand your social media audience, Sprout Social is the tool for you. From listening and publishing to engagement and analytics, Sprout Social provides you with everything your brand needs to succeed on social media. Keep all your customer interactions, replies, campaigns, and events under check with this amazing tool.
- 112. TODAY 02/09/2022 @ 4.00PM
- 113. Pain points are specific problems faced by current or prospective customers in the marketplace. Heat maps - a representation of data in the form of a map or diagram in which data values are represented as colours. Conversion rate optimization (CRO) is the practice of increasing the percentage of users who perform a desired action on a website.