By Elise Anderson
Dominique Hanssens might well consider UCLA Anderson home, as this is where he has spent his entire academic career, serving in a variety of roles and capacities that include faculty chair, associate dean and marketing area chair. Along the way he has collected numerous honors and awards, authored and co-authored a host of published papers, books and book chapters, consulted with large corporations, served on numerous committees and editorial boards, been interviewed by top broadcast and print media, and expanded his academic horizons as the 2005–07 executive director of the Marketing Science Institute (MSI) in Cambridge. He is a pioneer in the use of what is now known as “big data” in marketing, focusing his research on strategic marketing problems, in particular marketing productivity, in which he applies his expertise in data-analytic methods. Several industries, including hospitality, airline and banking, adopted his research to develop and advance their ongoing marketing strategies.
In November 2015, Hanssens officially retired from his teaching responsibilities, but he is far from relinquishing his ties to the school. Indeed, he remains director of the Morrison Family Center for Marketing Studies and Data Analytics and continues working with and mentoring Ph.D. students. He also continues his research endeavors as Distinguished Research Professor of Marketing at UCLA.
Hanssens took time from his still busy schedule to ponder the years he has spent here on the myriad activities with which he has been involved and the roles he has played as teacher, researcher, corporate partner and groundbreaking analyst in the area of marketing.
Q: What prompted your interest in marketing analytics?
I first became interested in an academic career during my undergraduate program in Antwerp, Belgium. My interest in marketing analytics was prompted by a former MIT professor who got me thinking of pursuing a Ph.D. in the U.S. But it was while I was at Purdue that a guest lecturer piqued my interest in time-series models in marketing, an area I found fascinating. You need a lot of passion for a topic to make it through a Ph.D., tenure, etc., and I found that I had a passion for this type of work.
Q: You are often asked about your work in the area of big data, but your research and efforts predate that more modernly recognized industry. Where did your work begin?
My research has been focused on answering the question, “How well does marketing work?” It really began with an early project I did with just one sheet of data and a little model to find out how marketing, in this case price changes versus advertising spending could affect brand sales. Consider the fact that just two elements of marketing — sales calls and advertising — represent about 10 percent of the economy. Ours is an $18 trillion economy, so about $1.8 trillion is spent on sales calls and advertising. It’s a huge portion of economic activity.
Q: Since that early study, there have been advances made in data collection and analysis. Can you give a quick overview of the developments and some of the ways that your research has influenced the current industry?
The milestones have been mainly in the vast increase of data quality. The first breakthrough was scanner data, or bar code data, which details what is selling under certain point-of-purchase conditions such as displays and price promotions. I, along with others, dug deep to explain the variation in sales attributed to retail availability, coupons, special displays, etc.
Next came CRM, customer relationship management, the tool used in relationship-intensive industries such as airlines, to develop individualized customer profiles that lead, of course, to loyalty programs. It led to the development of new, long-term marketing performance metrics, such as customer lifetime value, that I and others in marketing science have studied. These metrics are used, for example, to define new customer classifications and levels of status, such as silver, gold and platinum, and to determine what needs to be done to motivate customers to rise to the next level.
The next is internet data, which is digital by definition, starting with consumer search data from Google and its competitors. Among other things, search data reveal with some precision what customers are looking for and can be used to improve the accuracy of sales prediction models and to determine when and to whom marketing actions need to be initiated in order to strengthen consumer interest in certain products and services. Digital search data have since been augmented with social media data, product and price comparison information and consumer sentiment data that, taken together, are causing a true “digital revolution” in marketing intelligence and marketing decision making.
Q: And now?
The biggest new thing is mobile marketing data, which allows “point of purchase marketing” through mobile devices such as smart phones. Since the device moves with the customer, the location often reveals information that is relevant for the consumer at that particular point in time. As such, mobile marketing offers a promise of greater impact because of this “just in time” characteristic. At the same time, new marketing challenges arise because the mobile channel can also be more intrusive to consumers.
These are all various ways in which big data are generated, revealing patterns that can help companies make better marketing decisions.
Q: Has all of this technology had an effect on your work and teaching?
Well, empirical marketing research made the switch from the main frame to the desktop to the laptop and in some cases the tablet, so basically the work product has become more mobile, which vastly increases speed. In addition, the software has improved greatly, which allows me to bring more of that work into the classroom. For example, an instructor can now conduct and demonstrate live marketing analyses in front of students and show where the various data come from and how the models generate impactful results.
Q: Coming full circle, you have spent your entire academic career at Anderson. What prompted you to choose Anderson and what has kept you here?
I was drawn by the intellectual diversity. UCLA’s marketing group has always been known for embracing multiple points of view, as long as they are good quality. Ours is not a “paradigm” school where there is one paradigm that everyone believes in and practices. This is a much more diverse group of faculty with diverse interests, which I have always appreciated. Second, I was drawn by UCLA’s location in the major city of the West Coast, a place that always banks on the future rather than dwells on its past.
I have also had the good fortune to be surrounded by wonderful colleagues here. In marketing science that includes Don Morrison, Randy Bucklin and Anand Bodapati and, more recently, Peter Rossi and Robert Zeithammer, just to name the senior ones. Though I may not have co-authored with them, I have always benefited from their presence, as well as that of colleagues around the school. Altogether, my experience here has broadened my own perspective over the years in ways that I really appreciate.
Q: Would that include the formation of your own company?
Being a co-founder of MarketShare was quite an interesting development. I provided the initial modeling framework for advising large brands on their marketing resource allocation. It was very rewarding to see the ideas in my books and articles to be put in practice. We have since sold the company, but my former partners deserve the credit for running and growing the enterprise; my role was mainly to be the academic voice there. It has also been rewarding to offer good positions at the company to our MBAs and other UCLA graduates. On top of that, I was exposed to aspects of running a business that are outside my academic expertise, such as the venture capital world, or the worlds of accounting standards and human resource management, not to mention the computer-technical world for managing these huge databases.
Q: Any future plans to become an entrepreneur down the road?
I have no plans to become a serial entrepreneur. I did talk to my wife about running a B&B someday, but that may require more labor than either of us want to pursue. Besides, I am blessed to have several children and grandchildren who keep me busy.
Professor Hanssens has edited the second edition of his book, Empirical Generalizations about Marketing Impact, which answers the question: What do we know about the impact of marketing activities? His most recent paper, “Demonstrating the Value of Marketing,” will be published in a special issue of the Journal of Marketing in November 2016.