Marketers are mired in data. They’re up to their necks in it. No doubt you’ve heard the term data-driven marketing if you’re in the space. But, with so much data available to us now, it can be easy to get distracted by meaningless or vanity metrics, or even overwhelmed to the point of analysis paralysis. So how do we actually derive actionable business insights from all these numbers to drive marketing?
It’s actually simple. All you have to do is ask yourself one question: why are you here?
It might sound a bit existential, but this question helps get to the heart of why you and your organisation are doing what you’re doing, and what indicators determine your success or failure. Once you can answer this question, honestly and specifically, you can then start to drill down into what measures will actually get you to those goals. In the end, everything should be able to be traced back to your main business objectives. If it can’t, then stop wasting your time measuring it. That’s what it means to be a data-driven marketer.
While relevant metrics are going to differ for every business, here’s some questions to ask yourself to help you figure out which data you should be using to drive your marketing decisions.
1. Where are our customers coming from?
When it comes to measuring awareness, it make sense to look at metrics like page visits as a whole or number of Twitter followers. But these in itself may not actually be contributing much value when it comes to achieving business objectives.
What you really want to know is, where are your customers coming from? This goes beyond just measuring lead generation; rather, what you want to know is where your highest-quality leads are coming from. What traffic sources are producing the leads most likely to convert?
This can help you understand your customers better and ensure you’re not directing your efforts at channels that aren’t going to get the best returns, as one agency found one of their clients doing: “We recently worked with a government client who had spent considerable effort and resources over 18 months building a following on Twitter. Our analysis showed that although the follower numbers kept growing, this client was failing to reach the real key influencers of its community. We found that these influencers prefer the long-form discourse of blogging and paid very little attention to Twitter.”
2. Do our (potential) customers like what we’re doing?
In other words, are people engaged? It’s pretty simple, really: people who like what you’re doing are going to be more likely to want to give you their business.
Again, how you measure engagement will depend a lot on the business, but can include metrics like time spent on the website, number of pages per session, email open rates and click-through rates (CTR). Content engagement rates are also important – for example, are they engaging more with a certain type of blog post, or a certain subject matter? Do YouTube videos work better for your audience?
These metrics then feed into the all-important conversion rate, which tells you exactly how many people were engaged enough to want to hand over their money (and, by extension, how much return you have helped to generate for the business).
Tracking these metrics and linking them to tactics and strategies will give you a clear picture of how effectively you’re targeting your audience, so you can replicate your successes.
3. What is turning them off?
Just as important as knowing what’s working is knowing what’s not. While engagement rates will help pinpoint weaker strategies, it’s also important to consider metrics like bounce rate and cart abandonment rate.
High bounce rates – how quickly people from certain sources or campaigns are leaving your website – can be a sign that you’re targeting the wrong people, or sending relevant targets to irrelevant pages, so by tracking this metric, you can optimise quickly, thereby minimising your losses.
Focusing on cart abandonment rates can also deliver particularly high returns – after all, those leads have already taken significant steps towards conversion, so all they need is a little nudge to get them the rest of the way. Zero in on the steps in the checkout process with the highest abandonment rates and perform A/B testing until you’ve got it just right.
4. How much do they cost to acquire?
Your customer acquisition cost (or CAC; also known as cost per acquisition, cost per action, pay per acquisition or cost per conversion) is a pretty crucial metric, particularly if you’re an SME with a tight budget. After all, it doesn’t make much sense to throw a lot of money at a tactic when a cheaper one might achieve the same results.
Don’t forget that it’s not just PPC or SEO campaigns that have a CAC – it’s all channels, including email and social media.
5. Are our customers happy?
According to a report by Econsultancy, 70% of companies say it’s cheaper to retain a customer than acquire one, so it’s in your interest to ensure your customers are satisfied well beyond conversion – and this goes doubly if you have a subscriber model.
First-party data is the most helpful – in a survey by Digital Strategy Consulting, 74% of marketers said it gives the greatest insight, while 64% said it offers the highest increase to customer lifetime value. A net promoter score is an excellent place to start collecting this data as it only involves asking customers one question: “On a scale of zero to 10, with 10 being highest, what’s the likelihood that you would recommend us (our company) to a friend or colleague?” This question has been proved to be a highly accurate measure of customer satisfaction.
6. Are we making the business money?
Ultimately, everything should be tied to revenue growth. As well as your conversion rate, you’ll also want to know exactly how many marketing-qualified leads (MQLs) were passed to Sales and how many of those MQLs became customers. If there’s a significant drop-off between those two numbers, this is indicative of a problem: perhaps your definition of MQLs needs to be refined or revised, or more touches are required in the lead nurturing process.
Where do I find this data to drive my marketing decisions?
While some of this data can be collected from free tools like Google Analytics, marketing automation tools offer the most comprehensive solution when it comes to data collection and analytics.
Here are some of the marketing automation tools with the best reporting features in the market today:
- bpm’online: A b2b-focused tool that compares marketing channels to identify those that generate the best leads, and analyses prospect behaviour to allow for easy and fast targeting of sales-ready leads
- LeadSquared: Tracks user activity and behaviour for accurate lead scoring, and identifies areas for improvement, with a particular focus on bounce rates
- HubSpot: Provides marketing impact reports, so you can see precisely how strategies have impacted sales
- Oracle Eloqua: Compares engagement efforts to conversions, analyses website performance, and maps cross-channel engagement to real revenue so you can easily see the ROI of campaigns
- IBM Marketing Cloud: Uses cognitive analytics to understanding customer behaviour and make data-driven decisions
By having a relentless focus on data-driven marketing, you can ensure you make smart decisions that have a measurable impact on your business’s bottom line.
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