iKnowtion Predicts Another Challenging Year in 2006 for Marketers Increasing Emphasis on Business Growth and Marketing Effectiveness Will Prompt Greater Focus on Optimization Solutions
Tuesday, 14 February 2006
iKnowtion, a marketing and analytic consultancy that works with Fortune 500 companies, predicts that companies will increasingly look to analytically-based optimization solutions to achieve higher levels of business growth and marketing effectiveness in the coming year.
"Marketers right now are under extraordinary pressure to help grow company revenues and profitability, while in many cases holding the line on their spending," says Bill Duffy, iKnowtion founder and managing partner. "This reality will force marketers to accelerate their investment in analytic tools that can pinpoint where the opportunities for growth are and how to achieve them in the most cost effective way possible. Based on feedback from companies that we interact with, there are three areas that we see emerging in the coming year, and all three can be filed under the category of optimization."
One trend iKnowtion sees for 2006 is that companies will need to look for ways to make their customer prospecting and acquisition efforts more effective and efficient. iKnowtion believes that, except for a handful of well-known national brands, the days of using mass marketing techniques to acquire customers are rapidly facing extinction, as are large volume prospect mailings. iKnowtion sees more companies using mix modeling tools and techniques to assess the value of their mass advertising efforts and to assist them in allocating their spending better. Likewise, on the direct marketing front, these companies will use new, more sophisticated targeting tools to find high long-term value customers within lists, focusing less on new account volume and more on the profit potential of consumers.
Secondly, iKnowtion predicts there will be a stronger emphasis on customer retention efforts this year as growing competition puts the squeeze on companies that have given token attention to repeat buyers, once perceived as an unshakable base. Since the emerging consumer is not as loyal to brands as his predecessor, iKnowtion believes companies will lose profitability if they cannot retain their valued customers who are a source of low cost repeat purchases. As a result, optimizing existing customers through refined segmentation strategies will be a key topic in many marketing planning meetings this year.
The third area that iKnowtion sees developing in 2006 is an expanded focus on tools that optimize the allocation of marketing incentives and offers, particularly in industries that rely heavily on them, such as automotive, telecom, pharmaceutical and financial services. This application requires compiling rich data histories, especially marketing contact information, in order to model the demand for particular products by different types of customers.
Duffy adds, "As all of these tools and applications become best practice, we anticipate that many companies will want to integrate their data, their technology and their measurement systems in order to optimize their marketing activities. It sounds highly analytical, but marketers are discovering that this is the brave new world."