Can CMOs jump-start their businesses’ growth prospects by studying the practices of high-growth companies?
That question motivated an extensive cross-industry research study by the Institute for Real Growth (IRG), a collective consisting of marketing leaders from large global businesses and agencies. The IRG aims to help CMOs and other business leaders drive growth strategies. Toward that goal, the IRG research team conducted more than 500 in-depth interviews with business leaders and collected 1500 online responses to understand what separates growth leaders from laggards.
The results, presented in New York in early summer 2019, reveal a set of behaviors seen in companies that overperform on growth in their markets compared to underperformers.
Three of the findings related to how companies overperform are particularly relevant for companies investing in data, technology and AI to drive growth and improve customer experience:
Overperformers use data to inform business decisions
The IRG study validates the long-held view that data is key to growth with its finding that 65% of growth overperformers place data and analytics at the core of their strategic decision making, compared with just 35% of underperformers.
65% of growth overperformers place data and analytics at the core of their strategic decision making, compared with just 35% of underperformers.
The challenges faced by underperformers are less a reflection of how much data they likely have and more a reflection of the difficulty many organizations have analyzing data in a way that reveals insights about customers and their needs.
Netflix outperformed the networks with data
To illustrate, consider the product format for traditional television shows compared to content on a platform like Netflix. The typical 50-minute format for television dramas has not changed in generations, despite decades of data on viewing practices captured from ratings services and cable set-top boxes.
Yet Netflix analyzed its data and saw that young viewers prefer shorter programs that are 12- or 18-minutes long. This differentiated understanding of how adults and kids consume content influenced Netflix’s acquisitions and in-house content development. The result is far more product format flexibility than channel-based programs offer. Adapting business practices and approaches in response to data-driven insights is a behavior of overperformers.
Overperformers use data to inform creativity
The Netflix example highlights not only the importance of data for gleaning insights about customer wants and needs, but also how a growth overperformer can marry data expertise with creative ideation — in other words, to cultivate a relationship between the technological and human elements of the business.
Growth overperformers can gather and analyze data for insights, and then use those insights as a catalyst for human creativity. Creative ideas could come in the form of new products, campaigns or services, or as new business and pricing models.
Growth overperformers can gather and analyze data for insights, and then use those insights as a catalyst for human creativity.
How Pepsi Co uses data to inform creative decisions
The IRG researchers used the example of PepsiCo’s recent acquisition of Soda Stream. Buying a home drink appliance maker might seem out of character for a company whose flagship product typically comes in 6-packs bought from retail stores. Like many overperformers, however, Pepsi was able to look at consumer trend data pertaining to several issues — attitudes about soda, concerns about sustainability, growing pressure on local water supplies, etc. — and leverage those insights to drive investment in a new beverage model that grew the business. Why wouldn’t marketing — a function that typically owns the voice of customer data — leverage customer insights to drive these types of strategic growth initiatives?
Overperformers make marketing more human
All organizations need to attract customers and sell products to grow. Behind every sale, however, is a person with a problem or need that needs to be addressed. People and the organization’s impact on them are top of mind more consistently for growth overperformers than for underperformers. Specifically, 35% of overperformers talk about the impact their business has on people and communities compared with just 20% of underperformers.
Though “humanized” growth today accounts for just 6% of the total growth potential of a company, the IRG analysis indicates that humanized growth is the connective tissue that enables coherence between other growth enablers. There is also vast room for improvement, given that even overperformers have only begun to tap more fully into the human element.
The researchers conclude that despite the world’s drive toward increased automation and technological mediation, the companies that most effectively leverage data in the service of humanized growth will earn the ongoing loyalty of customers.
These themes echo many of Persado’s core principles of using AI, data and creativity together to radically improve how marketing messages are created and ultimately grow the business.