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Mining the Science Out of Marketing

1 May 2011 2 Comments
This column is written for statisticians with master’s degrees and highlights areas of employment that will benefit statisticians at the master’s level. Comments and suggestions should be sent to Keith Crank, the ASA’s research and graduate education manager, at keith@amstat.org.

Contributing Editor
Jim Fong is the newly appointed founding director of research and consulting at the University Professional and Continuing Education Association (UPCEA). He has held many leadership and analytical roles within the research, marketing, and higher education communities. Fong can be reached at jfong@upcea.edu or jimfong@comcast.net. He also writes a blog.

My initial foray into statistics and analytics began when I was a senior in high school. I was attending a Boston Celtics and Phoenix Suns game at the Boston Garden in 1983. My best friend somehow got his hands on VIP tickets and we sat in the second row of the upper level, immediately behind where the journalists and statisticians sat with their paper charts (not laptops). One statistician was recording tick marks of where legendary Larry Bird was successful and where he wasn’t. He did the same for other stars on the parquet floor that afternoon and shared with me how the game was being managed through data.

I was sold on being a sports statistician, although it took me 15 years and a number of market research and advertising research jobs before I got as close as I would get to a sports career— Penn State University. I didn’t get to touch any sports data in that job, but I could feel the sports flavor in the air. I was primarily in charge of a team of researchers measuring market possibilities for the Penn State World Campus, its online degree-offering entity.

In jobs before and after Penn State, I was immersed in how analytics influenced the marketing process. I soon learned there were diverse marketing team members and data were often the unifying factor.

Delivering concise marketing summaries, models, and implications made marketing teams more unified, efficient, and strategic. Debates within marketing teams were less about instinct about what should be done next based on who had the most relevant experience and more about the interpretation of market research findings as to segmenting the market, identifying the strongest attribute to leverage in a marketing campaign, forecasting demand and market share, and assessing the competition.

Marketing managers, vice presidents, database marketers, creative teams, and web designers rallied around marketing strategies and tactics derived from market research. Statistical analyses and market research gave the educational institutions a competitive edge in knowing what degree to launch in an online environment or what message to develop for a specific market segment. Market research became the voice of the customer in complex organizations otherwise paralyzed by data.

What made marketers respect and adopt market research was how an analyst transformed the data into information, and information into meaning, and meaning into action. Many marketing departments within higher education are, themselves, transforming from an “advertising” orientation, which tended to be more of a creative process. True strategic marketing is a pure science—leveraging data, information, and statistics—but adopts a creative process as one of many potential outcomes.

In the late 80s, when I earned my BS in mathematics and MS in statistics from the University of Vermont, statisticians were groomed for biostatistics, census, or the sciences—not marketing. Few knew the world would explode digitally and demand more statistics to “define the target market,” “mine data for patterns,” or “model what’s causing churn (customer loss).”

I evolved from being a data collection director, statistician/analyst, and director of research at a survey research firm to ultimately a marketing consultant in the higher education industry. My job has me spending less time directly mining data and more time working with analysts to interpret data. I still consider myself a marketing researcher and statistician, but with different skill sets, some of which have evolved while others have atrophied. To compensate, I’ve incorporated new tools into the decisionmaking process such as word clouds, in-depth interviews and focus groups, analyzing geographical information systems (GIS), and observational or experiential research.

The problems asked of me as an educational marketing and research consultant are often “Can I launch this master’s degree online?” or “Why are we losing students?” or “We need a new marketing strategy. Can you help determine what the positioning should be?” Just as a cabinet maker would design a plan, I’ve had to design a research plan that addresses many factors, including budget, reliability needed, time constraints, meeting customer needs, and creating the final product.

A cabinet maker has a tool box and so does the market researcher. Rather than hammers, saws, and screwdrivers, the market researcher has statistical tools such as surveys, sampling, statistical models, and secondary research. The market researcher also has GIS software, demographic and trend data, web analytics, focus groups and qualitative research, advertising tracking studies, observational research, pricing models, and conjoint analysis.

To know whether to launch a particular master’s degree online, I would conduct an environmental scan on industries and competitors. To build a good survey, I might conduct an opinion leader survey of eight to 12 experts in the specific field. I would then draw my sample and design my survey. Implementing the survey and data collection follows, and any good analyst knows that “garbage in equals garbage out,” so monitoring and pre-testing is critical. Last, but not least, the analyses take place where hypotheses are accepted or not accepted, models are built, and insights and actions are developed.

While one may not see the market research career as socially rewarding like the Peace Corps or engineering sound bridges, it is amazingly rewarding. I am emotionally rewarded when I see the success and implementation of a new and successful marketing campaign or a reversal of declining university enrollments due in part to data-driven actions.

Demand for analysts and market research will only increase in the future. Analysts and market researchers are also more likely to have a place at the strategic planning table. There are many strong signs showing increased future demand and hiring for skilled analysts. For example, digital and data storage companies, corporations, and statistical software companies are placing greater emphasis and investing significant resources on developing stronger data mining tools, software, and processes. Industries are relying more on strong analysts to monitor and improve customer satisfaction, increase revenues from primary target markets, enter new markets with new products, acquire greater market share through stronger messaging, guard against fraud through pattern recognition, and create optimal pricing models for different markets or segments. Northwestern and DePaul recently announced graduate degrees in predictive analytics, which also may signal the demand for greater analytical powers.

For me, market research has been that slam dunk I was looking for as a youth. It was the evolution of tick marks on the page to reaching into the market research tool box for the answer.

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  • Analytics at NC State said:

    “Northwestern and DePaul recently announced graduate degrees in predictive analytics, which also may signal the demand for greater analytical powers.”

    NC State University’s Institute for Advanced Analytics offers a 10-month, intensive Master of Science in Analytics (MSA) degree, now in its 5th year. The MSA program currently enrolls 40 students and has recorded a job placement rate over 90-percent at graduation each year since its inception, despite the recession.

  • Linda Burtch said:

    I agree wholeheartedly with Jim’s comments. Marketing applications for statisticians are certainly on the rise, as is evidenced by our over-the-top client demands. Analytical, data-driven decision making is crucial to the profitability of a business.

    In marketing,one of the industries that seems to be growing the most quickly is customer-centric loyalty analytics. Customer retention is most readily accomplished when the decisions made are based on something concrete—the data attained, analyzed, and applied by statisticians. They are responsible for translating the data from meaningful patterns to actionable insights.

    Statistics (and therefore, statisticians) are a key to growth. Companies across the industry spectrum are investing in analytics, creating a noticeable boost in the number of positions available for analytical professionals. Good news for sports statistician hopefuls, good news for business.