The business world is flush with data — customer data, industry data, operational data, and of course, marketing data. Data is now so important to business and marketing that you’d think most companies would have a pretty good handle on it.
While there’s certainly been some progress in the past few years, not every business is making use of their marketing data to their full potential.
According to a study by Gartner, 81% of marketers expect that the majority of their decisions will be data-driven by 2020. But data management and data analysis are still a challenge for many businesses, especially when it comes to inbound marketing.
According to another study, businesses cited poor data use and accessibility (54%), poor data quality (44%), and poor database integration (37%) as their main barriers to successful marketing data management.
It isn’t just marketing teams that are struggling. It’s in the C-suite where most of the decisions are made, and if executives don’t have a handle on their marketing data, they can’t expect their subordinates to either.
Starting from the Top
According to the 2017 CMO Survey, a survey of top marketers in the United States conducted by Duke University’s Fuqua School of Business, 60.8% of CMOs aren’t making greater use of their analytics either because they lack the tools or processes to measure success or because they lack the people with skills to link their analytics to marketing.
(Source: Marketing Charts)
In other words, even top-tier marketing executives struggle with marketing analytics because they simply don’t have the resources to leverage them.
According to the very same survey, conducted in 2018, the effect of analytics on company-wide performance is still more-or-less flat. Five years ago, top marketers rated their analytics progress a 3.8 out of 7, where 7=highly effective and 1=not at all effective. In 2018, that rating only went up to 4.1.
Data-driven initiatives, such as the implementation and use of marketing analytics, must come from the top.
Once the executive team understands the importance of data and how it can be used to further develop their marketing, they can make clearer decisions about what types of analytical technology they need to invest in and how that technology can be deployed to create value.
Even if analytical thinking and data literacy aren’t skills you have in your leadership team, simply recognizing the importance of data and marketing analytics is a good first step. You can then bring your new-found understanding to the rest of your organization to create a more data-driven culture.
Creating a Data-Driven Culture
If you haven’t been relying on your marketing analytics to make decisions until now, it may feel difficult to start. People tend to fall into a comfortable rhythm at work, performing the same processes day after day, even when those processes aren’t working.
There are four elements to building a data-driven culture from scratch so you can start making decisions based on your marketing analytics:
One: Implement a Single Source of Truth
There needs to be a central source of marketing data at your company, or at least a source of data that integrates with all your other systems. You can’t rely on disparate marketing analytics solutions that don’t communicate with each other.
Often, marketing teams will use a central CRM with an analytics capability or a third-party program that integrates with their other systems. As long as everyone agrees that master data should be drawn from a single place, you can make strides to more data-driven marketing.
Two: Encourage Widespread Data Literacy
You need to promote data literacy throughout your organization.
You can start by making clear and accessible lists of your most important metrics and KPIs, with instructions on how to find and understand them. This information should be available to everyone.
Three: Provide Access to Analytics
Access to your marketing analytics must be broad.
You don’t need to give complete access to your analytics to everyone, but everyone should have access to the data they need to make decisions and do their jobs. Be careful about data overload. Instead of empowering your team, too much data can be debilitating.
Four: Make Data-Driven Decisions
Every decision, no matter how small, must be based on what the analytics say.
For example, if you’re about to launch a new social media campaign, no one should be doing it from scratch if you used analytics to track the results of your last campaign. Review the data from last time to determine what worked and what didn’t, then integrate those insights into your new campaign.
If you don’t have data on-hand, do research into how other companies found success with similar marketing tactics.
Leveraging the Data That Matters
You can learn almost anything from your analytics, and your ability to collect marketing data is almost limitless. But not everything you learn is useful.
If you don’t know what you’re looking for in the onset, you’ll waste work hours sifting through your analytics to find a report that’s relevant.
Instead, you and your team should identify the metrics that matter most. What you choose will depend on numerous factors, like the size of your business and your specific goals. Different departments may care about different kinds of data, so its important to segment accordingly.
If you’re a CFO, you probably don’t need to know the conversion rate of one of your company’s landing pages, but you’ll probably be interested in the net return on your inbound marketing investment.
Some of the most common marketing metrics used by marketers include:
- Customer Acquisition Cost (CAC)
- Return on Investment (ROI)
- Visitor to Lead Ratio
- Lead to Customer Ratio
- Revenue Per Customer
- Repeat Business Percentage
- Bounce Rate
With the right tools, you can even identify more granular metrics to identify problems in your marketing and sales funnel.
For example, you can determine how many of your customers originated from your marketing efforts (as opposed to cold selling or referrals). You can even determine the lifetime value of each of your customers.
Get the Skills to Use Your Marketing Analytics
Even if you have the right tools, you’ll struggle to use your marketing analytics for decision-making if your team doesn’t have the skills. There are a few ways to get the skills you need.
You could hire new employees that have the skills to understand your marketing analytics. However, demand for workers with such skills are on the rise — IBM predicts demand for data scientists will rise 28% by 2020, for example.
You may not need a data scientist on your staff, but it can be an expensive challenge to find people who have both a marketing and an analytical background to join your team.
Your second option is to train your current employees to use new analytical tools. This is perhaps the most common approach to this scenario. Training your existing employees can be expensive by itself, but it doesn’t require you to take on new hires and increase your overhead. You can train strategically so you don’t waste resources.
Of course, if you want to bring in the best caliber without taking on additional staff, you can always consult with an agency to get the help you need. The right agency can even help you build an investment and implementation plan for your marketing technology, ensuring you don’t waste money on tools you don’t need.
If you’re ready to finally get a handle on your marketing analytics, contact Growth Panda today. We’ll do an assessment of your current marketing analytics and make recommendations on how you can move closer to a data-driven marketing strategy.