Maximizing Marketing Analytics to make Cost-efficient Decisions
What is Marketing Analytics?
Marketing Analytics is the practice of measuring, managing, and analyzing marketing performance to maximize its effectiveness and optimize return on investment (ROI).
Why is it important? Understanding marketing analytics will allow marketers to be more efficient at their jobs and minimize wasted digital marketing budget. Monitoring your digital campaigns and their respective outcomes will enable you to spend each dollar as effectively as possible. Obviously, if something costs more than it returns, it’s not a good long-term business strategy.
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In a 2008 study, the Lenskold Group found that “companies making improvements in their measurement and ROI capabilities were more likely to report outgrowing competitors and a higher level of effectiveness and efficiency in their marketing.” In simpler terms: Knowledge is power.
With marketing analytics, you can answer questions such as:
- How are our marketing initiatives performing today? How about in the long run? What can we do to improve them?
- How do our marketing activities compared to our competitors’? Where are they spending their time and money? Are they using channels that we aren’t using?
- What should we do next? Are our marketing resources properly allocated? Are we devoting time and money to the right channels?
The more knowledgeable you are about how your campaigns are performing and the more data you have to see the big picture, the better off you are.
How to gain Marketing Analytics success
Today, data is floating all around us. It’s one thing to gather all the data and see how your digital campaigns are performing and it’s another thing to be able to analyse how you can use that data correctly and see what you can work on and how you can improve to make your campaigns even more successful.
Here are some tips we put together to help you reap the greatest rewards from marketing analytics:
1. Focus on ROI
It is important to measure ROI to receive the full benefits of your marketing dollars. Asking yourself the question of, “How will I reach the anticipated ROI?” is the first step. Value exists in quantifying the expected outcomes from marketing investments. Learn what to measure, when to measure and how to measure.
In order to achieve your goals, establish specific steps to move the process along and search for ways to measure effectiveness by aligning your marketing analytics with financial goals.
2. Avoid vanity metrics
Make sure you keep away from metrics that distract you from the business goal. Marketing metrics like Facebook fans or website visits may impress people but often don’t correlate to revenue. Instead, turn your focus to engagement metrics that do equate to ROI.
When you collect the right data, you save time and make better decisions.
3. Connect marketing data with sales efforts
Thanks to the information age, people now make purchases based on blogs, reviews, and social networks. The good news you have access to the same information. The bad news is your team doesn’t know how to translate that data into revenue.
Although marketers and organizations have plenty of data, they struggle to mine it, reveal their most important customer segments, and respond to their customers’ needs in real time. Once you have unearthed these kinds of insights, you can start shedding light on what marketing programs are profitable and if your marketing investments are affecting sales productivity. Your team can get a holistic view of the true ROI when everyone focuses on how marketing impacts sales.
Understanding the consumer’s decision journey and discussing the ROI with the entire organization – not just marketing and sales – can prove to be effective as well.
4. Experiment a lot
Exploring new possibilities should be something that teams do to try and improve returns on marketing campaigns. Experimentation and testing do not only offer insight, but also possible alternatives. Moreover, it doesn’t have to be a cumbersome process; simple business experiments work well.
One way to do it would be using the test-and-learn approach. Take one action with one targeted group, take a different action (or no action) with a control group, and then compare the results. With this, the outcomes become apparent without all the hassle.
5. Make informed decisions without regrets
Reporting your marketing analytics is necessary for your business’s success. More importantly, your team should focus on making an informed decision from those reports. But what’s stopping management from taking action? They may have a case of analysis paralysis.
A study conducted by Princeton and Stanford University psychologists found that we are sometimes so obsessed with filling information gaps that we may choose the wrong path. Your business may want to create one more report or consult with one more business analyst. Our challenge is to make a good decision without accumulating more data.
Analysis paralysis is common in all types of businesses. You can quench your organization’s thirst for more data by introducing definitive boundaries on data collection and ensuring all analytics reports include action items.
Applied holistically, marketing analytics allows for better, more successful marketing by enabling you to close the loop as it relates to your marketing efforts and investments. It’s your job to use the digital marketing tools you have and the data that they’re gathering to your organization’s benefit. Tools like Google Adwords, Hotjar, and Amplitude are there to help gather data but it’ll be up to you to take that data and use it to your business’ advantage.
All in all, marketing analytics should be strongly utilised to make sure you’re getting the most out of all your digital marketing efforts. Make sure you do your homework to achieve success through analysis and make cost-efficient and ROI-driven decisions with marketing analytics today.
Related article: Michael Barnard’s Step-by-Step Guide to Creating Customers for Life