Article

Should marketers trust their gut or their data?

According to a recent study, 80 percent of marketers are making decisions based on their gut instincts.

September 3, 2013

The following is an excerpt from a recent conversation on RetailWire, reproduced here with kind permission.

Is marketing art or science?

Former Apple CEO and Pepsi president John Sculley famously said, "No great marketing decisions have ever been made on quantitative data."

On the other hand, there is a growing chorus in marketing circles these days which asserts that the explosion of personal information on consumers makes data driven decisions the only way to go.

So, what are marketers actually doing? According to a recent study published by IBM, Marketing Science: From Descriptive to Predictive, 80 percent of marketers are making decisions based on their gut instincts. This, according to John Kennedy, vice president, marketing at IBM, is a mistake.

In a column on Forbes.com, Mr. Kennedy asserts that the rise of mobile technology, social networks and other digital channels has resulted in consumers "interacting and communicating" in new ways, which has lead to the expectation that brands will respond in more personal and meaningful ways.

To connect with consumers, Mr. Kennedy says marketers:

• Must use data to appeal to consumers on an individual basis
• Need to develop a scientific approach to their work
• Must make use of cognitive computing.

Taking the scientific approach, Mr. Kennedy asserts, means analyzing and acting on data from different sources, such as purchasing history and call center records. Marketing needs to share this data with other parts of the business to create a better overall experience for each shopper.

Consumers are willingly sharing data with companies, but frustration builds when marketers fail to do anything meaningful with that information. While it might be comforting to fall back on gut instinct as a response, it isn't an adequate substitute for properly analyzing the data shared and acting.

RetailWire BrainTrust comments:

Gut-driven decisions are no longer the same as the old days. There are two types of gut marketing approaches.

Gut-Binary: Binary-based gut considers the data and metrics to influence the marketing decision, but adds a layer of "feel" to the decision that is human and relates to real experiences in the select marketplace. This is most used in established markets, where brands are expanding.

Gut-Visionary: The Pure Gut or Gut-Vision approach says, "Who cares about the metrics? I am going with my gut feel on this." The Gut-Vision approach can be successful, but also can be of higher risk. Best used for totally new concepts. Angry Birds is a Gut-Vision example. iPhone is also one.

The gut is still the best way to make a decision, but it needs to leverage more proof samples than in the past. Why? The market is moving so fast that many times its direction cannot be understood by normal, stable marketing people (like me). — Tom Redd, Vice President, Strategic Communications, SAP Global Retail Business Unit

The true answer is classic consulting-speak: it depends and a little of both. The minute you rely too much on data is the minute someone like Apple blows by you, and the second you go gut (think orange juice packaging) is the second you get slaughtered by irate consumers.

You have to be smart enough to understand when to use which, and it's never easy. Fortunately, there is no formula. — Lee Peterson, EVP Creative Services, WD Partners

An informed, educated gut is the only way to go. Massive data is valuable in having a better understanding of the crowd, and that crowd understanding is nearly invariably at the foundation of good marketing efforts. We could multiply witnesses here, but Sculley is as good as any. — Herb Sorensen, Ph.D., Scientific Advisor TNS Global Retail & Shopper, Adjunct Senior Fellow, Ehrenberg-Bass Institute

The greatest marketing people in the world have always relied on their gut instincts for the great ideas and products we buy today. However, they also used historical data on previous successes and failures in order to build their new mousetrap.

R&D people kept the innovator somewhat grounded in the reality of bringing their new ideas to market, by testing the product, in order for it to exceed anyone's expectations, and create demand as well.

It is a team effort of innovation, gut instinct, practical know how from R&D, and historical data to bring something great to the marketplace, and even all that doesn't guarantee success. Working together to create great new products is exciting—and exhausting—but the rewards can be great! — Tony Orlando, Owner, Tony O's Supermarket & Catering