There is a shift happening in departmental dynamics at companies. Marketing is either being given a seat at the table or they are still seen as the print shop for sales.
A Marketing Scientist, Statistician, and the Assistant Professor of Marketing at Emory University, Daniel McCarthy, encourages marketers everywhere that they have the power of metrics to get a seat at the table.
The Marketing Scientist discusses customer retention, revenue forecasting, and cautions about what data points to not place too much faith in. Check it out!
- A marketer can take customer retention, order rates, basket size, and customer acquisition to provide a revenue forecast for the company.
- To help build a forecast, one of the most important sources of data is previous transactional behavior, determining what sales are going to look like next year and the year after.
- “You can’t manage what you can’t measure.” - Daniel McCarthy
- A base for a customer retention model is to consider that when each customer signs with your company, they each have a different propensity, or level of loyalty, that will determine their retention behavior with your business.
- When determining whether or not a customer will purchase from your business again, look at their previous transactional behavior. If the customer is still too new, then use the previous transactional behavior from another customer that is of a similar makeup to help forecast.
- If a marketer only looks at current sales today, they could be ignoring the sales for the future. Consider a long term impact, how do the investments you are making in marketing today affect revenue a year from now?
- Career advice from Daniel McCarthy - When considering a career path, think in simple terms and evaluate the most efficient path. Be sure to take care of yourself along the way, because it can be difficult to get your health back.
- LinkedIn: https://www.linkedin.com/in/danielmcc/
- Twitter: https://twitter.com/d_mccar
- Personal website: http://www-stat.wharton.upenn.edu/~danielmc/
- Google scholar: https://scholar.google.com/citations?user=989OSrYAAAAJ&hl=en
- Theta Equity Partners: https://www.thetaequity.com/
- Finance should have more weight than marketing in a company. - Marketing should have an equal seat at the table. Marketing now has the ability to provide metrics and customer behavioral insights to help provide revenue forecasting that warrants them an equal seat at the table.
- Customer lifetime value should only be used tactically for measurement. - Customer lifetime value can be leveraged strategically at a high level to govern whether a company should acquire a customer and also influence what the pricing should be.