As the old business adage goes, “You can’t manage what you don’t measure.” This is especially true when it comes to marketing.
Whether the goal is brand awareness, acquiring new customers, or increasing your customers’ lifetime value, measuring the impact of your marketing efforts means you can better manage your marketing strategies.
This is why marketing analytics — the process of tracking and analyzing the data generated from your marketing efforts — can be such a key driver of success. It can improve decision making, campaign targeting, budget allocation, and create efficiencies for better results.
Here’s why marketing analytics is a benefit to your organization, and how you can get started today.
The Need to Be Data-Minded
Marketing analytics leverages the data generated from customers and campaigns to give marketing leaders a clear assessment of the actual impact of their efforts.
In today’s data-fueled world, there’s so much information available to marketers that can provide a number of business benefits. In fact, business leaders say analytics improves efficiency, allows for more effective decision making, and increases financial performance. Analytics can also help marketers get better results faster with fewer resources.
What is Marketing Analytics?
Marketing analytics is the process through which a marketer gathers and analyzes data on their marketing efforts to understand the impact of that effort and to optimize other efforts in the future.
For example, a marketer runs a series of ads on a social media site that asks customers to click on a link to a product page. There are a number of ways they could track KPIs, or key performance indicators.
A few of these KPIs include: how many people saw those ads, who actually clicked on the link, how many people who clicked on the link actually purchased a product, which ad creative resulted in the most number of clicks, and what customer demographics clicked on the ad.
Without actually gathering and analyzing the data around that campaign, the company would have no way of knowing the impact on sales that campaign had, or whether to repeat it in the future. Additionally, studies have found that the less marketers use analytics to influence their marketing decisions, the less they actually understand the value of their marketing efforts.
What Can You Measure?
With advances in tracking and attribution today, marketers have the ability to measure a number of different marketing metrics that can provide actionable insights into their efforts, such as:
- Collecting data on a customer’s average purchase
- How much customers spend on your website
- What link brought them to the website
- How much customers engage with social media posts
- Click-through rate
- Percentage of customers who saw and ad or post and clicked on the link
- Conversion rate (the number of customers who made a purchase after seeing a given ad or post)
Great tracking can also help you pinpoint your customer acquisition cost, or how much you’re spending on marketing efforts to acquire one customer. It can also tell your return on ad spend, or how much you’re optimizing your budget per campaign.
But don’t just collect data around your campaigns and initiatives. Collecting data on your customers can give you a wealth of actionable information that can enable you to better tailor your marketing efforts to your target audience. Customer data can help you create personalized experiences for your customers, and help build long-term relationships with them as well. And 78% of customers would be more likely to make future purchases if given offers targeted to their interests, wants, or needs.
How Can You Measure It?
The web analytics tools you use for your marketing efforts will typically help you gather key information. If you’re running ads or campaigns through platforms like Google, Facebook, or TikTok, they’ll automatically provide these metrics on your dashboard.
Your website management system will provide you with metrics on web traffic and engagement. If you’re using a customer relationship management (CRM) platform like HubSpot or Salesforce, they’ll gather these metrics, too.
Many times these tools will also analyze your data, give you charts and graphs to visualize that data, and even suggest insights gained from that data.
Keep in mind the different types of marketing data you can collect for your analytics efforts. Zero- and first-party data is data gathered directly from the customer themselves, such as a customer visits your site and fills out a short questionnaire, interacts with your brand in a chat, or gives their information when they sign up for a newsletter.
Because this data gives you direct insights into who your customers are and their behaviors, it’s the most valuable type of data you can use to drive your marketing efforts.
Marketers also use third-party data, which is anonymized data that comes from platforms, aggregators, or intelligence sites, collected about individuals on the internet. However, customers today are becoming more privacy-minded about what data they want or don’t want tracked online.
With the rise in data privacy regulations like GDPR, more limits on cookie tracking, and privacy changes in iOS, it’s going to be much harder to collect and use third-party data. Focus your efforts on collecting that zero- and first-party data as often as you can.
4 Steps to Implementing and Leveraging Marketing Analytics
These four steps are just a brief overview of the process of implementing and leveraging marketing analytics tools into your marketing efforts.
1. Create your goals and objectives
First, determine what you want to achieve with the new campaign or initiative you’re rolling out, and what part of the customer journey you’re targeting.
Some examples of goals include raising brand awareness, targeting a new audience, incentivizing customers to take action by clicking a link or signing up for a newsletter, or driving purchases of a new product. Knowing what you want to achieve will set you up for knowing what you need to track.
2. Determine what you want to measure and how
Now that you have your goals and objectives in place, you can create a list of your key performance indicators, or KPIs, which are metrics to track that will tell you how successful your campaign or initiative was.
For example, if you launch an ad campaign where you want people to click on a link and purchase the product, your KPIs may be tracking your click-through rate and your conversion rate. Once you determine your KPIs, make sure that you’re able to track those metrics through whatever technology you’re using, like a CRM or ad platform.
3. Run your marketing campaign and analyze for insights
Once your campaign is over, you have a wealth of data available to you. It’s time to analyze that data to learn what worked with the campaign, and uncover insights from the data that tell you about your efforts or your audience.
There are many platforms today that run analyses on that raw data and show you the results in easy-to-read dashboards. To gain data insights, look for patterns and answers to the questions you had at the beginning when planning your goals and objectives.
For example, you may find that one type of creative had a click-through rate of 25% while a different type had a 65% click-through rate. This indicates that the second ad had a clearer or more compelling call to action, which got more people to click on it.
Or, you may find that out of everyone who clicked through your ad to the website, only 2% actually made a purchase. The insight here is that once they got your website, they didn’t buy because the product or service offer might’ve been too confusing, priced too high, or maybe the link brought them to the wrong page.
Or, you may find that 100% of the people who clicked on the ad bought your products — but only 4% of people who saw the ad actually clicked on it. This means that people want to buy, but hardly anyone engaged with your ad because it was too confusing, the value offer wasn’t stated clearly enough, or it reached the wrong audience.
4. Apply insights for future optimization
Now that you’ve analyzed your data and extracted its insights, you can use what you found to create more targeted and impactful campaigns in the future.
Looking at our previous example, you may opt to only use the second ad’s creative on the next campaign since it resulted in more click-throughs. You may also revamp your product or services pages to make a purchase easier or more appealing once customers get there. You may also rewrite some of your ads so that your call to action is clearer.
Using your insights to optimize future marketing campaigns can result in better targeting your audience with products or services they’re interested in, increasing your return on investment more immediately, and streamlining your efforts based on data, not on guesswork.
What Can Marketing Analytics Do for You?
Having all this data about your customers, your campaigns, and your impact can help take the guessing game out of your marketing efforts, and provide the following benefits that can help position your brand for continued customer retention and growth.
Understand Your Customers
Using data to drive your marketing efforts is better for your customers overall. Gathering data from them can help you better tailor your efforts to your particular customers, and offer them personalized experiences that they can’t get elsewhere. More personalization improves the customer experience, and will help keep people engaged and continuing to buy from you.
Using analytics helps you truly understand touch points along the customer journey and allows you to deliver the right message at the right time through the right channel.
Optimize Your Channels
Tracking and analyzing the efficacy of your marketing initiatives means being able to see which channels are giving you the best return, and which channels aren’t as effective as you’d want them to be.
These insights can help you decide if you want to take a different approach to engaging customers on that channel, or if you want to focus on other channels that give you a higher return.
Spend Your Budget More Effectively
As you use analytics to help improve your marketing efforts, you’ll also be able to optimize your marketing budget as well by uncovering the initiatives that give you the most return on your investment.
By leveraging your approach to marketing analytics data, you can know how your marketing money is being spent, and how you can shift your spending so that you’re not wasting any of it.
Connect Marketing to Larger Business Initiatives
By knowing your customer base more and how different campaigns or initiatives perform with them, you can more easily explain how your marketing efforts impact your overall business.
Use your data analytics insights to tell the story around your efforts so leadership can understand how your initiatives made a difference in customer acquisition, new purchases, or ongoing revenue.
Gain a Competitive Advantage
Leveraging data to inform your decision-making and to give you a more precise understanding of the impacts of your efforts will always give you an advantage over competitors who aren’t doing so. Additionally, you can use your analytics findings to benchmark against your competitors or the industry as a whole to see where you’re succeeding and what areas need improvement.
Taking the Next Steps in Your Marketing Analytics Journey
If you want to gain a deeper understanding of marketing analytics and how it can be applied to making more strategic business decisions, start with Harvard DCE’s Professional & Executive Development program, Marketing Analytics: Strategies for Driving Business Results. Through interactive sessions, case studies, and group exercises, you can learn more about how to leverage marketing analytics, how to use consumer data, how to tell a story from your data, and how analytics can help a brand grow.
Not only can it position you for career growth, it’ll position you for the future of business.