INFORMS News: People

Send People items to Peter Horner via e-mail at: peter.horner@mail.informs.org
Gary L. Lilien, Arvind Rangaswamy and Frank Germann, following a survey of more than 200 senior executives, concluded that Fortune 1000 companies that increase their use of marketing analytics improve their return on assets an average 8 percent and as much as 21 percent, with returns ranging from $70 million to $180 million in net income. Their research appears in the paper, “Performance Implications of Deploying Marketing Analytics,” scheduled for publication in the International Journal of Research in Marketing.

Lilien and Rangaswamy are professors at the Smeal College of Business at Penn State and prominent members of INFORMS. Germann is a professor at the University of Notre Dame.

“Our study provides a strong rebuttal to executives who believe that information gathering and analysis result in excessive delays and ‘analysis paralysis,’ ” says Lilien, co-founder and research director of the Institute for the Study of Business Markets at Penn State’s Smeal College. “On the contrary: when analytics is deployed with strong support from key executives, organizations thrive in competitive industries and react well to today’s customers, who frequently change their product preferences.”

The study emphasizes the key role of management in the success of marketing analytics projects. A company’s top management team must ensure that the firm, (1) employs people with requisite analytics skills, (2) deploys a sophisticated IT infrastructure and data, and (3) develops a culture that supports marketing analytics, so that the insights gained from marketing analytics can be deployed effectively within the firm.

The analysis also shows that support from the top management team, a supportive analytics culture, appropriate data, information technology support, and analytics skills are all needed for the effective deployment of marketing analytics.