If you try to measure too many metrics, you will drown in a sea of data. For this reason, it may seem illogical to add yet more analytics to your strategy. However, marketing analytics are completely different from web analytics, and without them, you will have a distorted picture of your performance.
Why Web Analytics Are Nowhere Near Enough
Whereas website analytics offer information about the performance of your website, marketing analytics provide information about the performance of your business as a whole. Web analytics include page load speed, time on site, and page views. Marketing analytics, on the other hand, relate to type of traffic, leads, sales, and conversions. They look at what events cause a visitor to become a customer.
Another key difference is that marketing analytics consider data from more than just your website. They take information from online sources like emails and social media and even from offline sources like in-person events. This allows you to see the effectiveness of all your marketing efforts, rather than just the quality of your website.
Without such information, it is impossible to measure the effects of each area of your marketing strategy, to calculate ROI, and to determine if you are meeting your goals. With the data, however, you can identify problem areas, make appropriate changes, and improve your marketing and ROI.
There is one final difference between the two types of analytics: marketing analytics are usually focused more on users as individuals. In analytics, each user is a number that contributes to the total. Dig deeper into your marketing performance so you can more accurately target your leads.
What KPIs You Should Measure
One of the most important KPIs is sales revenue. Without this KPI, you cannot know if your marketing efforts are bringing any money to your company.
You also need to know by how much your sales are growing (if they are growing at all). It is necessary to measure only the impact of marketing on growth by taking into consideration all the other factors that may be contributing.
As well as calculating how many leads you are generating, you should divide leads into categories according to quality and according to whether they are marketing qualified or sales qualified.
Cost Per Lead
Cost per lead is another indicator that will show you if your marketing efforts are profitable. When calculating cost per lead, you need to consider all the expenses that are involved into attracting and nurturing leads.
Traffic to Lead Ratio
Traffic is a website analytic that means very little on its own. This is where marketing analytics come in: with the traffic to lead ratio, you can see how many of the users visiting your site have the potential to become customers.
Lead to Customer Ratio
It is equally important to know how many of these leads are actually becoming customers. You need to measure the number of sales qualified leads (those that are sales ready) and sales accepted leads (opportunities already contacted by your sales team).
Customer Acquisition Cost
Once you have determined how many leads are turning into customers, you can calculate how much it costs to gain each.
Customer Lifetime Value
Although an initial sale does contributes somewhat to the value of the customer, this is limited information on its own. More useful is the lifetime value of a customer. It is impossible to be certain, but you can still calculate with a high degree of accuracy when you add data from past and current customers.
Sales Team Response Time
You could be missing out on opportunities if your sales team is taking too long to respond to leads. Calculate your response timeand compare this to how fast your competition responds — this will make it clear if you need to make improvements.
Reach and Engagement Per Channel
You need to measure the reach and engagement of all your channels, including social media, email marketing, landing pages, and blog posts.
Analytics Models to Use
Marketing Mix Modeling
To implement the marketing mix model, someone on your team needs to have a good understanding of econometrics along with math marketing.
The model allows you to see the effectiveness of each of your marketing channels. By giving you insight into how individuals and segments change over time, as well as showing you differences in online, offline, and social media interactions, you will see whether you are spending in the right places. The model considers other factors that may contribute to sales, including external variables like season, competition, and promotional activities.
You can use marketing mix modeling for long-term strategies and for short-term planning. However, it is important to note that, for accuracy, it requires high-quality data on sales and marketing from the past few years. You should also bear in mind that this model is unhelpful for activities that see little change over time and it has no use in measuring long-term impact investing of a single touchpoint.
Attribution modeling uses an algorithm to determine how much credit for conversions and sales is assigned to touchpoints. A touchpoint could be an online ad, social media feed, website, email campaign, or similar activity.
The most common attribution model is Last Touch/Click. This assigns 100 percent of credit to the final touchpoint before a conversion. There are other methods available, some of which that use regression techniques, statistical modeling, or even more sophisticated algorithms with real-time bidding systems. Unfortunately, all these still rely on cookie data, meaning it can be difficult to attribute importance to each touchpoint with complete accuracy.
Reach, Cost, Quality
Reach, cost, quality (RCQ) divides each touchpoint into separate parts:
- the number of users your reach in your target audience (reach),
- the cost of a unique touch (cost), and
- the quality of the engagement (quality).
The model does this through a combination of data and analytic judgement. RCQ is particularly useful when marketing mix modeling is impractical, such as when you have limited data, when your spending rate is more or less constant over the year, or when effects of investment are difficult to isolate.
The advantage of this model are that it uses the same unit of measurement for all touchpoints, making them comparable.
Although you only need an Excel model for RCQ, it can be difficult to calibrate the values of each touchpoint, due to the differences across channels. Another disadvantage of RCQ is that it will not account for network and interaction effects, as it is strongly based on assumptions.
Advantages of Marketing Analytics
Controlling marketing return on investment (MROI) can be a challenge, as it involves multiple touches, influencers, and variables unrelated to marketing. When you measure the right metrics and use the correct model, you will arrive at a much more accurate number than if you tried to rely on website analytics alone. Only like this can you control investment appropriately and, therefore, control MROI.
Base Your Marketing Strategy on Facts
Marketing analytics ensure that you always plan an activity based on facts and numbers, never guesses. Furthermore, when marketers work together with data scientists they better understand where the information is coming from and are more likely to trust the numbers. This encourages marketers to implement strategies in time to gain the full impact.
Unearth Insights from Business Intelligence
By using the analytic models available, you receive maximum insights from your inbound intelligence data. In many cases, you will be able to track performance in close to real time. You will be able to adapt your strategy immediately, whenever needed, to ensure you always optimize your results. At the beginning, this may involve making sweeping changes. As you progress with your strategy, it will be more about tweaking activities to generate higher ROI for both the short and long term.
Improve Customer Experience
When you lack the right data, you have no way of knowing how to improve the quality of the customer experience. A marketing analytics strategy helps you to avoid organizational silos — the main roadblocks to improving customer experience.
When you are able to understand and exceed customers’ expectations, you can bring the right information to your audience and make changes that add value to your marketing efforts. All this is critical if you want to see revenue growth.
Make Better Decisions
With marketing analytics, marketers combine their business judgement (to confirm or question approaches) with creativity (to come up with new ideas to use the data and discover new ways to gather data). By keeping your focus, you make better business decisions.
Despite the benefits of marketing analytics, most businesses are more focused on web analytics. In fact, many neglect marketing analytics entirely. You cannot improve what you don’t measure — and without marketing analytics, you will be missing out on a wealth of data and opportunities.
Note from the editor: while preparing this article for publication, we came across numerous mentions of the diet of rabbits. They like carrots and lettuce, and well, all greens, really. Then, we realized that no bunny we met was wearing glasses no matter their age. Hence we conclude that if you want to improve your eyesight, you must eat your vegetables, just like mommy said.
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