Performance implications of deploying marketing analytics

a r t i c l e i n f o A few well-documented cases describe how the deployment of marketing analytics produces positive organizational outcomes. However, the deployment of marketing analytics varies widely across firms, and many C-level executives remain skeptical regarding the benefits that they could gain from their marketing analytics efforts. We draw on upper echelons theory and the resource-based view of the firm to develop a conceptual framework that relates the organizational deployment of marketing analytics to firm performance and that also identifies the key antecedents of that deployment. The analysis of a survey of 212 senior executives of Fortune 1000 firms demonstrates that firms attain favorable and apparently sustainable performance outcomes through greater use of marketing analytics. The analysis also reveals important moderators: more intense industry competition and more rapidly changing customer preferences increase the positive impact of the deployment of marketing analytics on firm performance. The results are robust to the choice of performance measures, and, on average, a one-unit increase in the degree of deployment (moving a firm at the median or the 50th percentile of deployment to the 65th per-centile) on a 1–7 scale is associated with an 8% increase in return on assets. The analysis also demonstrates that support from the top management team, a supportive analytics culture, appropriate data, information technology support, and analytics skills are all necessary for the effective deployment of marketing analytics. A recent Google search for " marketing analytics " returned more than 500,000 hits. Marketing analytics, a " technology-enabled and model-supported approach to harness customer and market data to enhance marketing decision making " (Lilien, 2011, p. 5) consists of two types of applications: those that involve their users in a decision support framework and those that do not (i.e., automated marketing analytics). During the past half century, the marketing literature has documented numerous benefits of the use of marketing analytics, including improved decision consistency (e. Rapid technological and environmental changes have transformed the structure and content of marketing managers' jobs. These changes include (1) pervasive, networked, high-powered information technology (IT) infrastructures, (2) exploding volumes of data, (3) more sophisticated customers, (4) an increase in management's demands for the demonstration of positive returns on marketing investments, and (5) a global, hypercompetitive business environment. In this changing environment, opportunities for the deployment of marketing analytics to increase profitability seemingly should abound. Indeed , an entire stream …