Thursday, May 24, 2012

Risk, Complexity, and Marketing

Why is analysis so misunderstood?

Marketing's goal remains the same: align solutions and needs to everyone's benefit.  A recent McKinsey article described that reality as one of the most complex and riskiest business functions.   Complex because we have to succeed as the tools used to communicate evolve and fragment while at the same time messaging shifts from paid placement to self-expression.  Risky because we're dealing with human emotions and behavior while at the same time we're trying to expand or create new markets as needs shift. 

Analysis, in its simplest form, answers the question: Why are things the way they are?   For businesses, it often starts with the understanding of why we might be deviating from expectations.  Our forecasts are always wrong, what is interesting is why.  Analysis turns the interesting into the useful.

We deal with risk and complexity by one of three means:  ignoring it and forging ahead with a vision and thus change the world, sticking our heads in the sand and let the world pass us by, or by trying to minimize the associated uncertainty and adapt accordingly.  In fact one can think of analytics as a means of quantifying uncertainty in order to reduce risk to the business. 

Analysis. like marketing, comes in many flavors.   A recent post in Forbes outlined three different uses of analysis:
  • Evaluative:  the review of marketing execution and includes ROI, attribution and a host of other 'devil in the details' functions.  By far the most common use of analysis.
  • Instrumental: the development of insights that guide strategy development and implementation.  These analyses focus on understanding why we might be successful, not how we will get there.
  • Conceptual: the challenging (and changing) of pre-conceived notions and assumptions about a market.   Since the mind is the most difficult thing to change and the impact is likely longer term this class has the potential to affect total business performance.

We need to do more of all of the above. 

Just like a brand is not a logo, analysis is not a computation.

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