Why is data important in marketing?
Ultimate purpose of marketing data is to increase a return on your marketing investment. Without accessing and analyzing data, you are not able to evaluate and optimize your marketing activities. Doing the same thing over and over again without reviewing results often leads to a suboptimal ROI at best. Your own marketing data is what enables you to make smart decisions. Why do you invest in marketing? It is to enable growth, rather exponential growth, that is, isn't it? Track, measure, and analyze everything you do in marketing. That habit will help you to achieve that goal of yours: your business's exponential growth.
What does it mean to work with marketing data?
Here is a scenario. You redesigned and relaunched your website because it wasn't bringing enough leads. Not as many people had visited your old website and certainly not enough of them had contacted you. The fact that you made a decision to redesign your website based on your website traffic and the conversion rate means that you worked with your marketing data. You were tracking the data (your website traffic and conversion rate) and made a business decision to invest in your website to generate better results.
Now with the newly launched website, you keep track of how many people visit your website, which pages are the top 10 most visited pages, which pages have the best conversion rate, etc. You analyze these pages to figure out what makes them the highest performing pages and what differentiates them from the other pages. Based on this analysis, you create a plan to increase traffic and improve the conversion rate for five of your less performing pages. You chose these five pages because they are strategically important pages (ex. it is a landing page for your newly launched product or service offering that you want to introduce to your target audience) and/or because their performance is not as good but has a potential to improve rather quickly (i.e. low hanging fruit).
Another example is an email campaign. When you use an email automation platform like MailChimp or a marketing automation platform like Hubspot, you can see various data such as an open rate, click rate, read/skim rate, and unsubscribe rate. You can also track a response rate (i.e. how many people replied to your email). These platforms allow you to do A/B testing so you can test subject lines, email layout, use of images, CTA (call-to-action) buttons, etc. What working with data means here is to analyze your email performance and optimize the future emails based on the analysis.
What you can do with your marketing data at a more macro level include:
Calculating the cost per lead (CPL), by looking at the dollar amount spent on marketing activities and the number of leads generated by them, and coming up with ideas to reduce CPL. You can compare your own data. For example, compare your FY20 data to FY21 data. You can also compare the data of different marketing initiatives. For example, compare the CPL of your live webinars versus that of white paper downloads. You can also compare your data to the industry averages.
Calculating and comparing your conversion rates to see what you can do to improve them. Just like the cost per lead, you can compare your data against your own data and/or the industry averages.
What are the benefits of data-driven marketing for SMEs?
Avoid a guessing game
You can create a list of clear action items. Who likes to play a guessing game especially when you have a limited budget in hands, right? Working with data helps you make informed decisions.
Increase your return on investment
When you pay close attention to marketing data and continue to optimize everything you do in marketing increases your chance to meet your goals and bring results you were looking for. Doing the same thing over and over again tends to bring the same (or worse) results over time, not better.
Reinvest in marketing and fuel your business’s growth
Marketing's ultimate role in business is enabling exponential growth. When you make data-driven decisions, generate results, and bring a healthy return on marketing investment, you are in the position of being able to reinvest in marketing. The continuous investment in marketing and repeating the cycle (data-driven decisions, results, ROI, reinvestment) will fuel the growth. And guess what? You now have a marketing engine that enables exponential growth.
Where to start with marketing data and analytics?
Set a baseline
What data do you already have? Analyze your data to see where you are. For example, see how many website visitors you have had and calculate the conversion rates (i.e. the ratio of visitors to leads). What are the averages? Do you see any trends? If you don't have your own data yet, look for the industry averages.
Decide what to measure
Identifying OKRs (objectives and key results) for your marketing activities is and should be part of your marketing strategy. When you create a game plan (i.e. marketing strategy), you want to be clear with what to measure. Working with data can be like trying to fill a bottomless bucket. No matter how hard you work to fill that bucket, you simply can't fill it. The more data you have and analyze, the more data you may want to collect and analyze. To prioritize, be clear with your marketing objectives and what to measure.
Implement the necessary tools and technology
When you clearly identify your OKRs, you will be able to easily define the gaps between what you can currently measure and what you want and need to measure. Are you able to measure everything you need to measure? Or do you need to implement new tools and technology? Marketing is (and should be considered as) an investment, not cost. The necessary marketing tools should also be considered as an investment. There are thousands of marketing technologies available so do research and plan ahead before purchasing them to avoid redundancy and overspent.