According to the Deloitte CMO report, 38% of marketing leaders consider driving growth their top challenge.
It’s no wonder then that marketing analytics play a larger role in business strategy than they have in the past 6 years.
Smart business owners like you are using marketing analytics strategies to grow their revenues. If you want to join them, this guide is for you.
Want to know how you can start saving money and time with data-driven growth marketing? Keep reading for the what, the why, and the how.
What is Marketing Analytics?
Marketing analytics is a cost-effective way to determine how well or how poorly your marketing campaigns are working.
When used correctly, marketing analytics can inform your advertising strategies and ground your choices with objective data. You can key in on the behaviors of your target audience to understand their buying patterns.
Consumer behavior is highly important today since the digital world has changed the buying process. More dynamic than ever, big data can help break down a complex customer into understandable behaviors.
Best of all, you can quantify those behaviors to help you make smarter marketing decisions.
A marketing analytics strategy aids in growth marketing, which is the focus on both company growth and customer retention. But in order to determine whether your strategy is working, you need a way to measure its success.
This is where RCQ comes in– reach, cost, and quality.
Reach refers to how well a particular marketing effort touches your target customer. Cost is the price per reach. Or, in other words, the cost of targetting and converting a customer.
Quality means the quality of engagement. For instance, your company may rank a sale as higher quality engagement than a share and a share as higher quality engagement than a comment or like.
Marketing analytics have nearly endless functions with all the new technology coming out these days. The industry is projected to reach $4.4 billion globally by 2023 for this very reason.
But with so many analytics tools on the market, it can be difficult to decide which functions are vital to your business. Segmentation, funneling, and integration of channels are three functions any marketing analytics strategy should include.
Segmentation is the ability to break down an audience into its component parts. While you have a broader target audience, there will be smaller groups contained within that audience.
Segmentation allows you to focus in on individual buyer behavior you might not see from the bigger picture.
Marketing funnels have been around forever but their role in marketing is changing. Instead of using funnels primarily to generate brand awareness, funnels should be used to target different forms of traffic depending on the consumer’s place in the buying stage.
Funnel customers from cold to warm to hot traffic using different analytics-informed strategies for each group.
Integration is the ability to use multiple channels to target customers. These channels might include:
- Digital ads
- Traditional ads
- Social media feeds
But it’s also important to be able to break down each channel by individual analytics. That way, you can more easily assign credit for conversions and analyze each channel’s performance.
Why You Need Marketing Analytics Strategies
So you know what marketing analytics are. But you may be wondering why you should care. What can analytics do for your business that innovation and creativity aren’t already doing?
Marketing analytics are data-based, which means using them will help your company make decisions backed by reason. And why do you want to make reason-backed judgments?
Because marketers who have an analytics-informed strategy are primed to increase growth, maintain retention, and improve MROI.
When you understand your buyers’ behaviors, you understand how to mold the buyers’ journey.
This is in part possible because of customer-level reports, which offer deep dives into an individual buyer’s behavior. You can then create a visitor profile to which future customers can be compared.
Instead of creating an abstract buyer persona alone to reach out to, you’ll have a real person to tie that persona to. Your business will better understand each individual within your consumer market and how best to target them.
The result? A better growth strategy in the long term.
Your goal as a business isn’t just to convert sales. It’s also to retain customers and clients for the future. Part of this is understanding more than just what converts the most customers.
You should also understand why a marketing effort converts. That way, you’re more set up to serve your audience in the long-term.
Marketing return on investment (MROI) will improve with the use of analytics.
You’re wasting thousands of dollars on channels that just aren’t working. But how can you know when your current strategies aren’t set up to show you what isn’t making its MROI?
- Cut back on wasted efforts
- Show what’s working
- Quantifies how well things are working or aren’t
Keep in mind, though, that both the idea generators and the data analyzers should be in communication. Companies that make analytical approaches the core of their business see MROI decrease two-fold over those who outsource their analytics.
How to Use Analytical Metrics for Growth
Using metrics for growth hinges on your ability to implement them successfully.
You can use data to understand buyer behavior instead of just conversion rates. You can visualize places where you’re losing customers and re-focus on helping buyers in every stage of the purchasing cycle.
You can identify new submarkets to expand into. And you can use analytics to track website visitors, conversion funnels, and even automated emails.
But if you don’t utilize all this data to inform your actions then you won’t see growth.
So how do you transform metrics into growth strategy? Here is our 5 step guide to utilizing marketing analytics in your business.
1. Define Your Goals
The first question you should ask is what are the business needs? After all, how will you know your marketing efforts are working if you don’t have goals to measure them against?
You can start by defining your key performance indicators (KPIs). KPIs are metrics that help you measure your progress toward or away from your goals.
For instance, your KPIs might be to improve conversion by 20% before the end of the year. Another indicator might be to retain 40% of your customers through a re-targeting email campaign.
Whatever your goals may be, make sure they each have two things in common. Your goals should be measurable and they should be specific.
An immeasurable goal might be to make customers happier. How would you quantify their happiness? And what purpose does customer happiness serve your overall marketing goals?
Specific goals are those with numbers, statistics, or percentages. That means setting a goal to increase brand awareness is not specific enough.
You want to say how many more people you want to reach this quarter than last or define a new demographic you want to reach plus how many individual people constitutes successfully reaching that new audience.
Analytics come in when defining your baseline. They also matter for creating reasonable objectives that you can actually achieve.
2. Do the Research
When it comes to marketing, the success of your efforts often hinges on your ability to understand your audience’s behaviors. That’s where market research comes in.
Market research is a combination of analyzing your own efforts, your competitor’s efforts, and the buyer’s behavior to make smarter decisions.
You can do this a number of ways.
First, you might consider polling your audience. Polls and quizzes are popularly used on social media and can be an extremely direct way of researching your target customers.
You may also want to use keyword research. Google Trends is helpful for this. But so are hundreds of other companies that offer free and cheap keyword research tools.
When performing keyword research, ask yourself:
- What keywords is your audience using?
- What keywords are your competitors using?
- What keywords are not being used currently that you could use going forward?
Keywords can help improve your brand visibility. They also help with search engine optimization (SEO).
Finally, identify the kinds of sales your competitors are doing. Then, do similar promotions but better. This also includes researching industry prices and identifying what products or services may not be converting because of cost.
3. Run A/B Tests
Now that you have your goals and you’ve gathered your intel, you can start running A/B tests. These experiments throw two different but related strategies into a ring and see which one comes out on top.
For example, you may want to test two different types of copy on your social media ads to see which better converts cold traffic. The first ad campaign (A) tests out short and sweet copy that explains your brand promise. The second (B) tests out copy that tells a brand story.
You can run A/B tests for content formats, copywriting styles, different CTAs, images, platforms, and more. Also, the longer you run your A/B tests, the more data you’ll have at the end. And, as with all scientific experiments, the more data you have the better.
You can also use A/B tests to measure different advertising channels against each other. Marketing-mix modeling breaks down spending by channel. That way, you know which channel is making the most MROI and which channels you should shave back efforts on.
4. Measure the Analytics
Once you’ve run your A/B tests, it’s time to gather the data and find out what’s working.
Tools like Google Analytics can help you out. For free, you can see:
- The number of website visitors per day, month, and year
- Which regions in the world contribute the most traffic to your business
- What devices your audience uses to interact with your brand
However, this data means absolutely nothing if you don’t translate the numbers into action. Analytics software can help you out with this. There are tools to help convert data into actionable insights to drive growth, retain customers, and improve your MROI.
You can easily convert some results into directly related insights. Less direct traffic, for instance, usually equates to low brand awareness. Meanwhile, engagement is a direct correlate to campaign ROI.
The data informs you about your efforts. In this case, you would want to re-focus your marketing strategy on improving brand awareness through more paid ads and increasing engagement with a stronger CTA. The next step would be to take action and perform a new A/B test.
5. Shave off Excess
The purpose of all this is to grow your business, your customer base, and your revenues. Using your newly acquired data, your final step would be to feed funds to the marketing efforts that are working and cut back on channels that aren’t.
But when one of these streams begins to underperform, it may be time to shave back your efforts there to refocus your energy on higher performing channels.
Attribution modeling can help with this because it’s the ability to attribute a conversion to the specific marketing effort that should receive credit for it. These tools also help assign dollar amounts to individual activities, campaigns, and results.
The attribution model also serves as an aid for the team and management to more easily visualize successes.
If your business can accurately identify which efforts are earning their MROI, all your marketing efforts will get easier.
Marketing Analytics Companies for Hire
Transitioning to and maintaining a data-driven strategy for your marketing efforts can be difficult. But it doesn’t have to be.
As long as you follow this guide and find the right marketing analytics company for your business, you’re bound to have a fruitful year.
Looking to hire an agency devoted to growing your MROI? The Growth Agency was made for companies like yours. Find out more about our services and get a Growth Proposal to find out what we can do for your business.