Most of the world will make decisions by either guessing or using their gut. They will be either lucky or wrong.– Suhail Doshi, CEO, Mixpanel
Strategic marketing and analytics go hand-in-hand. Analyzing data on customers, markets, company financials, and campaign performance can unlock insights to meaningfully steer marketing strategies—enabling you to acquire and retain more customers and drive profit growth.
Marketing analytics has evolved significantly over the last decade. Today, the emphasis is on enhancing digital campaigns using robust analytics platforms—and a recognition that employing analytics is critical to staying competitive. According to Gartner, “76% of marketing leaders say they use data and analytics to drive key decisions.” It’s no wonder that another study shows the marketing analytics market is valued at over $2 billion and expected to reach almost $5 billion by 2025.
Investing in analytics is vital to success. But for small and mid-sized businesses, it may seem like an intimidating undertaking. No matter your company size or the stage of the marketing journey you’re in, it’s possible to develop a foundation of data measurement, then scale it over time. These tips will get you started.
Define Your Goals
Whether you build an analytics program internally or outsource the process, the first steps remain the same: define your corporate goals and key performance indicators (KPIs), then identify the business questions you need to answer to achieve those goals.
Let’s say you’ve set a goal of increasing revenue by 20% year over year. The right business questions might include:
- How many customers do we need to acquire and retain this year to achieve our revenue targets?
- How many leads do we need in order to acquire our target number of customers?
- Which marketing channels drive the most leads?
- Which marketing channels have the lowest cost per lead?
These questions provide a framework to begin building an analytics strategy.
Select Your Tools
With your list of business goals and questions as your guide, you’re ready to identify the marketing analytics tools, platforms, and resources that will enable you to obtain and analyze the data you need to formulate the answers.
You’ll find a vast assortment of analytics tools and platforms on the market, all varying significantly when it comes to cost, robustness, ease of use, and integration. The best options integrate data from multiple sources for a complete 360-degree view of the customer, offer sophisticated reporting, visualization and data extraction capabilities, and make it easy to glean insights and take action.
With many analytics tools and platforms to consider, it’s best to prioritize investing in tools that do two things: answer the questions that are most critical to driving ROI and profit growth, and provide the data your company is equipped to act on.
Marketing analytics systems can be grouped into four high-level buckets, each with a specific purpose.
- Database/Tracking Tools track, store, and maintain data. These are the most common:
- Customer Relationship Management (CRM) & Customer Analytics: CRM platforms store customer and contact information, setting the stage to do segmentation, lead scoring, monitoring, and targeted outreach. They provide insights into the customer journey and differences between customer types, which marketers can leverage to create personalized communication and conduct look-alike prospecting. The more information you can collect and analyze customer profiles, behaviors, preferences, and sales activities, the better you can manage your customer relationships and optimize your customer acquisition and retention strategies. Key metrics to track with a CRM system include cost per acquisition, customer lifetime value, and retention rate.
- Tools like Google Analytics and Adobe Analytics track website performance and user behavior—providing insights into how visitors navigate a site, what content is most engaging and impactful for conversion, and what external sources are driving traffic. Marketers can put this information to work to improve the website’s content, design/layout, and functionality to optimize the user experience. They can also track website traffic, bounce rates, time on site, and goal conversion by source. Perhaps most importantly, strategic marketers can link this data back to campaign performance metrics to assess the cost per lead for each marketing channel. Other platforms in this category include heatmapping tools to visually track engagement on a page, session recording tools to watch user pathing, and A/B testing tools to test different copy, creative and features.
- Campaign Analytics: Marketing campaign platforms—such as Google Ads, LinkedIn Advertising, and email service provider systems—report on campaign measurements like the number of impressions, click-through rates, and cost-per-click metrics. These platforms can be integrated or merged with data on leads and sales from a website or CRM tracking tool. The value in using a campaign analytics tool lies in what it allows you to do: monitor how your campaigns are performing and use those insights to improve them—in real-time—by optimizing your advertising creative, keywords, and audience targeting.
- Analysis/Modeling Platforms can perform robust analysis, media mix modeling, and predictive statistical modeling. These platforms may or may not track or store data, but data can be imported into them and merged from multiple sources.
- Data Visualization & Insights Tools, like Tableau and Domo, allow you to create dashboards and showcase data in a clear, digestible format that keeps the focus on driving insights. Most of these tools allow you to import data from multiple sources.
- Customer Data Platforms (CDPs) combine data from your CRM, website analytics tools, and marketing analytics systems into one centralized system. And that solves a common pain point for many companies—the fact that data typically lives in disparate systems, and merging it tends to be a manual, time-consuming process. A CDP eliminates that manual effort and gives you a comprehensive view of customer behavior and business performance, which can speed up the time from analysis to action.
Make Your Data Actionable
Data is only useful if it is accurate, properly interpreted, and transformed into insights and action. Several steps can help ensure your marketing analytics data meet those criteria.
- Audit and validate that your tracking systems are functioning properly and capturing the data needed to calculate your KPIs and answer the business questions you defined upfront.
- Evaluate and expand your analytics implementations continually—especially when you undertake a significant website update or embark on a new campaign.
- Make sure you’re getting your money’s worth by capitalizing on all the powerful features available in your marketing analytics tools. Don’t fall into the common trap of investing in a system but failing to implement it properly or take advantage of its capabilities.
- Learn how to convert analyses and metrics into stories that guide strategic recommendations. For example, when you analyze a campaign, compare performance metrics to goals, benchmarks, and past campaigns to determine whether it was successful. Evaluate the full funnel of the campaign to understand which elements performed well and which could be improved. Did the campaign have strong click-through rates but low conversion? That might mean the ad creative is compelling, but the landing page isn’t optimized. Apply your learnings to future campaigns and test hypotheses to improve performance over time.
Transform Your Culture
Marketing is most successful when leaders create and nurture a data-driven culture—one that embraces data in everyday decision making. Encourage employees to ask “why” before executing on assigned tasks. Challenge your team to justify strategic plans with underlying data. Promote an agile, adaptive environment that tests, iterates, and optimizes throughout a campaign to continuously improve performance. Evangelize this type of test-and-learn approach, but make sure you’re open to pivoting when the data reveal insights that suggest a change of course.
Incorporating data and marketing analytics into your decision-making processes is a significant shift that takes time and effort. But the work will pay off through stronger marketing results, improved efficiencies, and a better bottom line. Learn more about analytics and data-driven marketing by downloading Marketri’s Guide to Marketing Terminology.