Start-ups and small organizations typically do not have the resources of larger enterprise companies. Larger entities, however, do lack innovation and are slow. Have you ever wondered how a small player with a data-driven marketer can take on and disrupt big players without the same-size marketing budgets? The answer is simple. Innovation and more importantly a data-driven approach.
Here are the top 5 reasons why every business needs to run its marketing department not by ‘gut feeling’ but rather by data. Be a data driven marketer to achieve success and create better value for your startup.
To optimize your marketing spent you need to know what sources are contributing to sales. Take it a step further. Understanding the return on your marketing investment can go a long way. To do this, make sure that you identify each sale and record what marketing efforts touched that sale. At the very minimum, you should look at last touch source of your sale/lead and the original source of the same.
If you want to take it to the next level, you can build an attribution model. This should take into account all marketing efforts that took the customer from its original source to the last one.
For example, the customer could have filled out a contact us form, opened two emails that were sent and finally clicked on a Facebook Ad to make the final purchase. Putting all that data together using a simple attribution approach would yield the following result. Organic SEO would attribute 25% of the sale, email marketing would get 50% and Facebook ads get the final 25%. Therefore, if you combine all that was spent with the revenue that was made you can identify sources which are working and not working and get to a very cost-effective way of running your marketing.
If you analyze historical data you can predict the business for the future and identify potential future sales. Here are a few things you can use your data to predict:
- Trends in seasonality (if it even exists). If you are a retailer you may already know the seasons that are busy and months where you are barely getting by. Knowing this can help with operations, your marketing initiatives and can help with financial planning.
- Knowing how much marketing you need to spend to generate your target sales is key to making sure you are running a profitable and scalable business. This will ensure that you are able to raise funds from investors, asking you to hit your targets.
- Analyzing customer’s journey you can optimize the process to improve conversion rates. To create a journey, you can probably start by analyzing your website’s traffic to see what pages are visited prior to having the visitor submit a form or make a purchase. You can then look at other touch points to see what else contributed to that individual becoming a customer.
Your prospects and customers are speaking but are you listening?
With today’s technology, especially social media, it is not difficult to collect and analyze your customer’s opinions. Historically, you would send out a survey to your prospects and customers to identify if they are happy with the product or service and if you can upsell them anything else. Today that data is available by all the likes, website comments, tweets, emails and review sites that your customers or prospects fill in.
Reading all these is your first step to understanding what can be improved, what users like and dislike about your brand. However, most traditional enterprise businesses have a social media team whose purpose is to communicate and respond to comments. Typically, they do not make it to upper management and are not being utilized. Well, a start-up can change that.
Your first step is to quantify the likes and dislikes, shares and followers. In this way, you can get a sense if your business is growing or not. Secondly, you can segment the group of people that are liking and disliking your products or services to build out an ideal target market. Finally, you can start to document all the comments and reviews your customers provided to enhance your products or services, fix any issues that your company may have and identify ways of marketing the areas of your product or service that your customers absolutely love.
Know your competition
Collecting data on your competitor’s website traffic, Pay-Per-Click initiatives, product/service offerings, and pricing have never been easier.
By analyzing and comparing your business to theirs you can identify opportunities and threats. Key areas to look for when spying on your competition includes:
- Job Postings – To see where are they hiring and what part of the business are they looking to expand, what technologies are they using and what marketing initiatives are they perhaps looking to add.
Press Releases/Financial Statements – Provide insight into their financial position, any new product offers and other key business information.
- Keyword Ranking – No SEO strategy is complete without knowing where you rank compared to your competitors. With today’s SEO keyword planning tools you can easily get this data, sometimes for a minimal fee, and be able to improve your search engine’s ranking without increasing your digital marketing spent.
- Website Channels/Traffic – By looking at your competitors’ website traffic estimates and what sources are contributing to that traffic you are able to benchmark against your marketing sources and see where you need to invest more to become competitive.
Using data to drive your marketing means you can test your email marketing, digital marketing, and website. You can conduct simple A/B testing on a small percentage of your email list to come up with the best subject line prior to deploying it to a larger dataset. You can test different ads for your digital marketing campaigns to see which one has the highest conversion or click thru rate. You can also test different landing pages or website designs to see what converts better. While testing does require extra time and perhaps even tools, if the results mean you are spending less and making more it may be a worthy investment.
Being a data-driven marketer starts with having the ability to collect data and continues with the ability to analyze data. There are tools that can help you with the analysis from Marketing Automation Tools which help store and optimize your data to Business Intelligence Tools that will enable to pull data from multiple sources and to look at the results at the same place. Sometimes, it is to your advantage to hire a marketing analytics company that can tackle the analysis so you can focus on what you do best, market!
Are you a marketer? How do you use the data you collect to improve marketing activities? What is the biggest reason for you to be a data-driven marketer?