Marketing Plan (Part 1)

 

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Marketing Data: What Matters And What Doesn't

AJ Agrawal ,

 CONTRIBUTOR

Data is big business in marketing. No successful company can escape from the need to track their performance and make decisions based on data. In 2015 marketing analyticsspending increased by 60%, according to the latest statistics. There are many statistics you can pick up, though.

The question you need to answer is what data matters and what doesn’t. You can learn absolutely anything from analytics, but not all of it is relevant.

The Importance Of Data Protection

Data is coveted and you must have a solid plan in place to protect it. Data bandwidth and data protection rates are increasing faster than anyone could have previously predicted. This is because as data becomes such a huge part of companies it’s naturally going to become a target for fraudsters who want the same information.

Your data should be fully encrypted and it should only be available to a select number of people. The consequences of leaked data and successful hack attacks are dire.

The Point Of Marketing Data 

To understand what data you should be looking at, consider what you will be using said data for. There are only two purposes here:

• To create the image of your perfect customers.

• To understand what’s working and what isn’t.

And you’ll notice that one directly links to the other. Once you refine the image of your perfect customer you can better target them. The problem with many companies is they don’t know who their target audience is, at least on a specific level.

Average Total Revenue Per Customer

This is a statistic you can work out by dividing your total revenue divided by the number of customers. This is the average value of every customer to you. If you have products and services at a range of prices, this will tell you whether you either need to upgrade your marketing campaign or change your focus.

You can dig deeper by only including the revenue and customer numbers from certain periods, such as per week or per month.

Percentage Of Converted Leads

Again, this is something you can measure over a specific period. The number of leads is all well and good, but it doesn’t actually mean anything. You can have thousands of leads and end up converting none of them. Look at your total number of leads and divide it by the number of leads you have successfully converted.

This will give you your strike rate. It will tell you two things. Your strategy for converting leads may be off or the leads you are gathering are not the leads that are right for your company.

Percentage Of Repeat Business

 This is exactly the same calculation as above, except you are dividing repeat customers by the total number of customers. You need this piece of data because it’s the only way you can tell how well you are doing with customer relationship management.

Repeat business is the bell that shows you are treating your customers right. Of course, you have to use a period of time that’s right for your niche or you can skew the results.

Cost Of Acquisition

 For this example, you are going to assume that your company operates exclusively online. You are using Facebook ads in order to attract new customers and you want to work out how much it’s costing you to make a conversion.

An easy example is to use Facebook ads for gathering newsletter subscribers. To work out the cost of acquisition you would divide the numbers for how much you spent on Facebook ads and the number of new newsletter subscribers over a specific time period.

You can steadily work on driving this down over time.

Bounce Rates

In regards to your website, make sure that your bounce rates are as low as possible. If your bounce rates are high, this shows that you are bringing in the wrong audience because they are clicking away almost immediately. Remember that bounce rates can be high because of a technical reason, such as your page takes a while to load.

Where Is The Traffic Metric?

 You will notice that of all the big marketing data on here not a single mention of traffic was made. This is because traffic means absolutely nothing in the grand scheme of things. Unless you’re still living in 2001, there’s no point in having lots of traffic on your website.

Instead, you want leads that come in the form of laser targeted visitors. A lot of companies are happy to see traffic levels go down because they know that the people coming to their website are far more likely to make a purchase.

In your view, what are the most important pieces of marketing data you can have?

3 Forms of Marketing Performance Metrics for Your Business

Understanding the Value of Your Advertising and Promotions with Marketing Performance Metrics  Marketing performance metrics provides your company with the ability to better understand the successes (or lack thereof) of the advertising and promotional efforts that your business has been making.  By properly utilizing marketing performance metrics, you will be able to measure the value and contribution of various techniques in order to create budgets, allocate resources, and make decisions regarding future marketing campaigns. That said, from the perspective of the marketing company, marketing performance metrics provide the opportunity to justify their own value and their role in the outcomes that are seen from a given marketing campaign or effort. These measurements are exceptionally important as they help a business to continually improve upon the performance and outcomes of their marketing efforts while creating a better return on investment for each marketing dollar that is spent.  Instead of simply continuing forward with what your business has always done, marketing performance metrics allow you to identify specifically what is working and what is not.  Make sure that your business understands marketing performance metrics and how they can be applied to your campaign in order to know its value.

Activity Based Marketing Metrics                     Among the most popularly used marketing performance metrics are those that are activity based.  They involve the counting, calculation, and reporting of numbers based on actions taken by customers or prospective customers, as a result of a marketing effort.  Among the easiest forms of marketing to which activity based marketing performance metrics can be applied are those on the internet.  This is because each of the behaviors of the customers can be tracked.  For example, counting the number of clicks received by a given link, or the number of downloads that have occurred on a webpage.  These are each types of activity based marketing performance metrics.  That said, marketing performance metrics that are activity based are more a matter of measuring customer behavior than actual business outcomes.  A more effective correlation can be achieved by measuring business outcomes such as customer value, market share, and product adoption.

Measuring Marketing Effectiveness

A more significant amount of marketing manager concentration should be placed on a marketing organization’s efficiency and efficacy as a whole.  Among the specific marketing performance metrics categories are those which involve the contribution the marketing has on the customer acquisition rate, the performance share, the rate of adoption of new products and services, the average value of each order, the improvement in the frequency of customer purchasing, the net advocacy and loyalty, the volume and share of business, the customer engagement, the margin, the market, and the rate of growth in comparison with the competition.

Measuring Marketing Operations: Marketing as a Business Process

Operations marketing performance metrics refers to the management of marketing operations as a business in and unto themselves. Collection and analysis of data from marketing functions is performed in terms of its business value.  It is typically accomplished by examining marketing investment vs. margin, total cost of marketing vs. lead profitability, as well as the conversion rates themselves. These analyses are helpful for the development of an understanding of the return on investment generated by the marketing.                                                                                                         By concentrating on these marketing performance metrics, marketers and businesses can have a clearer picture in terms of the efficiency of marketing with regards to the resources required to accomplish it.   The marketing operations goal is to improve that efficiency as well as to form a strong foundation for success by supporting the marketing with technology, processes, marketing performance metrics, and best practices.  This provides a company with the ability to operate its marketing as a type of separate business that is fully accountable.  This means that marketing operations will involve proper strategic planning, financial management, performance, and resource allocation, as well as skills management and assessment.  By using marketing performance metrics, you enable your organization to describe and measure the effectiveness and efficiency of your marketing.  This way, you will not only know the value and contribution made by those efforts, but you will be capable of ensuring that your marketing campaign is accurately aligned with your business strategies, activities, and goals.  With them, the correct decisions can be made regarding the use of the resources of the business, such as funds, people, and facilities and performance can be measured in comparison with competitors.