2 case studies: Cutting operational costs with marketing intelligence automation

Budget allocation to marketing intelligence operationsHere are two case studies that illustrate the dramatic impact marketing intelligence automation can have on cutting operational costs. The key takeaway is that money lost on operating costs is not available for building marketing promotions or exploring new channels. The chart to the right illustrates the yawning gap between the charges between legacy operations and cloud based automation. When budgets are tight, it’s almost unconscionable to continue the legacy practices from the last century. As Dad would say, “Money saved is Money earned“. Indeed.

Fortune 500 company reduces operational costs from $2.25MM to $325k p.a.

  • About the company: Fortune 500 consumer packaged goods company with global operations.
  • Goal: Provide marketing insights to regional teams world-wide. Reports per brand per region delivered on periodic basis. Regional sales data merged with consumer panel to deliver insights at global and local level.
  • Legacy implementation: 40 person offshore team with average billing rate from $25/hr to $75/hr.
    • Annual charges: $2.25MM p.a.
  • Cloud based (automation) solution: Self-serve portal solution with different authorization and login access provided for each region. Data uploaded on weekly basis with reports generated by next day. Long-tail report requests handled by analysts on demand.
    • Annual charges: $325K p.a. [Solution priced on data volume, number of users and charges for ad-hoc consulting]
  • Closing thoughts: Process outsourcing without process intelligence is rife with waste. Typical offshored teams are “single-purpose”. Any change requests require teams to be complemented with new staff. Bloat is endemic. The purchasing manager may negotiate the team rates from $40/hour to $35/hour but the point remains that over half the billed team is underqualified and underutilized.

Regional e-tailer reduces operational costs from $220K to $80k p.a.

  • About the company: e-tailer with annual revenues of $120MM
  • Goal: Provide target marketing support to email marketing team for ongoing monthly campaigns.
  • Legacy implementation: Home grown solution cobbled together with internal technology resources supported by analytical team on contract.
    • Annual costs: ~$220K p.a.
  • Cloud based (automation) solution: Cloud based marketing intelligence with single-user access. Get performance tracking, planning, campaign design and list builder capability.
    • Annual charges: $80K p.a. Solution priced on data volume, number of users, and some ad-hoc queries on-demand.
  • Closing thoughts: Homegrown systems without automation or process intelligence can be inefficient. The same costs roll over month over month with little incremental benefits. The operations are hard to scale. IT and resource management becomes a distraction to the core business.

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