Use of the term “marketing analytics” has been on an upward trajectory for the past 10 years, but it’s much more than a buzzword. The practice of marketing analytics is a vast topic that encompasses data, technology and skills to inform marketing decision-makers. Business leaders around the world are demanding more from their chief marketing officers (CMOs). The mass marketing Mad Men days of the 1960s, when all decisions were based on inclination, are over.
Today’s CMOs are directly responsible for their return on investment (ROI). Every touchpoint along the customer journey becomes subjected to scrutiny. CMOs are left with two options to maximize revenue and reduce costs:
Marketing analytics help decision-makers quantify costs and benefits, weigh outcomes and determine the risk associated with specific tactics. We are very fortunate to have an abundance of data at our fingertips. Mining the data and pulling out insights that are otherwise invisible to the naked eye is the job of the data analyst.
I often get asked: As marketers, what do we need to measure? To answer this question, I’d like to reference the visionary author and speaker Simon Sinek. In this TED talk, Sinek discusses his theory of The Golden Circle, the idea of starting with why, not what.
When I get the question, what do we need to do? I ask, why are we doing it?
Why do analytics matter to CMOs?
Clicks and impressions and bounce rates, oh, my!
Every day, marketers report on key performance indicators (KPIs) that might not matter to their business. I love this example outlined in the 2013 Adobe Analytics advertisement Click, Baby, Click! In this short video, the employees of an encyclopedia company get excited when they see clicks skyrocket. “We’re back!” shouts the CEO. This action triggers a series of events that affects multiple economies. But the employees failed to do one thing. They didn’t ask why the click rate was so high — spoiler alert for those who want to watch the video — a baby is hyper-clicking the “order” button on the encyclopedia’s website, displayed on a tablet. “He really loves that thing,” says the baby’s mom.
How do we use analytics to show marketing value and uncover opportunities?
When we clearly know why we are doing something, it’s easier to define how we are going to do it. Marketing pros are interested in analytics because we want to prove our worth. We must show ROI to grow next year’s budget. How do we do that? By analyzing ourcustomer’s journey from their point of view. Understanding how a customer navigates through touchpoints can help us deliver a better experience by reaching the right person at the right place and right time.
Identify your target audience before you begin your marketing quest. Using market research will help you build a persona for each of your ideal customers. The personas should include demographics, behavior patterns, motivations and goals. The more detailed you can be at this point, the more insightful your analytics will be when it’s time for reporting.
Be where your audience is. The digital landscape has an ever-expanding canvas of channels, pages and platforms where customers spend their time. Develop and deliver highly targeted content on the sites and apps your customers visit every day.
Timing is everything when it comes to marketing and sales. I’ve received many direct-mail pieces, emails and phone calls from car dealerships lately. Those sales people identified me as a qualified lead, ready to buy a car. They’re right about some things. I am interested in the cars they’re selling, and they found channels that I’m paying attention to. But they didn’t have the timing right. With a little bit of research, they could have learned that I bought a car six months ago and I’m not ready to buy another vehicle. They’re wasting time and money by targeting me with their ineffective marketing. They’d be better off setting a timer to start marketing to me in a year or two.
To combat the critical “right time” metric, we use a tool called lead scoring. Quantifying a customer’s behavior helps us more accurately understand their interest in a product. Buyer intent becomes a tangible indicator for positioning within the customer journey.
What tasks are necessary to accurately measure KPIs, goals and attribution?
This is the important work marketing analysts do every day. From tagging web pages with tracking pixels to building UTM parameters for all inbound links. Marketing analysts are focused on determining multi-touch attribution across all digital platforms. They pay close attention to KPIs that focus on ROI. Conversion metrics like cost per lead by channel, cost per opportunity and customer lifetime value help inform the revenue-driven decisions mandated from the top down.
When marketing professionals understand why their marketing plan is supporting the larger organizational goals, it becomes easy to determine which metrics matter. Defining how your team is going to reach the goal becomes obvious through the defined customer journey. Determining which metrics matter will become clear, even before your campaign begins.
Do you have more questions about marketing analytics or need help getting started? Contact us today.
Mike Reed is our Manager of Analytics & Automated Marketing and advocate for working both smarter and harder. You can contact him at email@example.com.