Data Insights Increase the Bottom-line & Improve Customer Equity
In this episode, we're talking about the value of marketing analytics. Joining us on this topic is Jose Murillo, the Chief Analytics Officer at Financial Group Banorte. Established in 1889, Banorte is the fifth-largest bank in Mexico, with Monterrey and Mexico City headquarters. How valuable is gathering and analyzing your company's data insights toward the bottom line? Jose is a believer that analytics payoff not only increases the bottom line but is also able to improve customer equity. Jose built an analytics group within Banorte with a core mandate that resonates with audiences and increases customer equity. In 2017, Jose's analytics group had a 20% return on equity than Citibank, which had a 9.6% return. Since then, the value derived by his analytics team created in partnership with the business and support lines during this time is getting close to a billion dollars. Jose breaks down the six strategies he and his team implemented, which helped them get to where they are today. Currently, they are the second-largest financial group measured by net income generation.
Strategy 1: Set up a profit center with ambitious targets.
The Analytics team was set up as a profit center, making it much easier to gain resources. Profit centers focus on generating revenue streams by identifying and improving activities. The team could get resources by establishing their commitment toward hitting ambitious targets rather than being a cost center where the focus is on keeping costs low and resources tight.
Strategy 2: Gain and receive support from the C-Suite.
Comprised of forward-thinking champions within the organization, the C-Suite wanted to be sage but wanted to be rich. Gaining support from top leadership toward understanding the necessary transitioning from product-centric to customer-centric will help make the overall mission success.
Strategy 3: Have a well-aligned centric plan.
The company was fortunate to foster a partnership between the analytics and business lines, which strategically enabled the customer analytics team to meet its targets. The analytics team was also paid using a variable compensation based on a fully implemented and measured project.
Strategy 4: Establish a yardstick to measure result assessments toward its goal's impact.
Jose discusses the challenges behind measuring revenue-generating projects. For revenue-generating projects to be considered valuable, there must be an estimate of the customer lifetime value (CLV). Establishing a yardstick is setting a standard to compare similarities to measure value or success. The yardstick should receive the CFO's support. In Banorte's case, the COO and CFO supported their proposed yardstick.
Strategy 5: Be an effective communicator and a loyal partner.
Jose describes the three tempos of effective communication.
Establish communication before and during the project's implementation.
Share the results with those who helped you get there.
Keep the C-Suite well informed about the results and how did you get them.
Implementing these three tempos of communication during projects with clients will establish more trust and strong relationship building.
Strategy 6: Have a team of smart and passionate people that have both IQ and EQ.
Jose speaks on the vital need to have team members with entrepreneurial instincts. Your team members must have a passion for what they're doing. Analytics payoff revealed its value during the first two years of the Banorte Analytics team's initial projects, proving that the six strategies above were the golden key toward increasing the bottom line. During the first year, when the goal was to acquire 10 times their cost, they achieved 46 times their cost. During the second year, they were able to do 106 times their cost. Just to put it into better perspective, 106 times their cost was equivalent to $275 million of net income. If you're on the fence about whether marketing analytics can create a real impact within your organization, then this episode is for you. Listen to the Full Episode