Performance implications of deploying marketing analytics

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 percentile) 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.

► Firms may realize favorable outcomes from greater use of marketing analytics. ► The favorable outcomes may be stronger when industry competition is high. ► The favorable outcomes may be stronger when customer preferences change rapidly. ► Top management team support of marketing analytics is critical.