As you know, inbound marketing is rapidly changing the way organizations compete. As leads search out information, engage with you on social media, and access your website content, they leave behind a rich trail of lead intelligence.
But the intelligence that marketers have at their disposal doesn’t end there. Sales and marketing platforms can easily be integrated to give a more closed-loop approach to marketing analytics.
Ever wonder how Amazon predicts exactly what you want to buy? The answer lies in business analysis – understanding patterns of what happened in the past to predict what might happen in the future.
With the explosion of lead and customer data available at marketers fingertips, it is no surprise that marketing analytics has become the rising star of business analytics. In fact, spending on marketing analytics is expected to increase 60% by 2015.
This post explores the goals of business analytics, how marketing analytics is playing an ever crucial role in business analysis, and how organizations can make better business decisions using real market feedback.
Unlocking the Wealth of Marketing Data
Marketing continues to shift from traditional outbound, offline marketing activities to online, inbound marketing strategies. We have long known that the power of digital marketing is in its measurability, but now thanks to the help of inbound marketing software like HubSpot, marketers can easily measure every aspect of their marketing efforts, not only from a high level campaign view but on lead-by-lead basis.
But measurement is only half of the story, the other half is attribution- understanding how to allocate credit to your various marketing activities and appropriately recognize their impact on the customer journey.
Business Analytics can measure anything and everything from warehouse efficiency and manufacturing information to sales pipeline and marketing’s revenue contribution. What you choose to measure and how you collect data is really a case-by-case decision but the goals of business analytics always remain the same – understand patterns of what happened in the past to make more accurate, data-driven decisions in the future.
Business Analytics typically combine high level data from each department in-order to gain an understanding of how the organization is functioning as a whole. Today, as most business functions have moved online it is much easier to access and analyze information from each department. Nowhere is this more evident than the marketing department.
The Role of Marketing Analytics
What sets marketing analytics apart from other business analytics is it’s focus on real market feedback. Marketing analytics keep pulse of the interests and actions of the subscribers, leads, and customers that your business is focused on serving.
Most marketers dipping their toe into analytics, select website and social media analytics as their starting points. Website analytics typically measure specific actions like clicks, page views and conversions. These granular analytics help marketers measure incremental improvements to specific channels but do not measure overarching marketing performance.
Marketing analytics go beyond measuring strictly online performance, favouring a more holistic approach to the measurement of marketing efforts. By connecting all areas of marketing, including offline efforts, with sales and lead generation results, marketing analytics reveal the direct impact marketing has on pipeline generation and revenue growth.
Common Marketing Analytics
1) Descriptive (i.e. What happened in the past):
- Investment in marketing
- $ value of pipeline contribution
- Channel ROI
- # of people who entered the sales funnel
2) Predictive (i.e. Predictions on what could happen):
- # of active conversations
- Social media sentiment score
- Forecast the # of leads in funnel that will convert to customers
3) Prescriptive (i.e. Suggestions on what to do):
- Reallocation of marketing spend
- Marketing mix optimization
- Optimization of social media scheduling
Who is Responsible For Marketing Analytics?
Do you know what would happen if your marketing budget was slashed by 10%? Well if you don’t know, you are not alone. A recent study revealed that 33% of B2B marketers don’t even attempt to measure the financial impact of marketing!
A common misconception around marketing analytics is that it is solely the CMO’s responsibility to measure marketing’s revenue contribution. Instead, every marketer should be leveraging analytics to measure the results of their efforts and make data-driven decisions about what to do next. At the end of the day, a marketer’s job isn’t to get more clicks or drive more traffic, it is to drive bottom line revenue growth.
If you don’t quantify the results of your marketing efforts it will be very difficult to recognize the impact your efforts have on nurturing and closing leads, let alone making a business case for increased investment in future marketing initiatives.
Marketing Analytics - Beyond the Marketing Department
The benefits of marketing analytics reach far outside the marketing department. Marketing analytics provide representatives from sales, customer service and senior business management with real market feedback that helps guide decisions on where to invest and how to prioritize.
Measuring things like lead-to-customer close rates, customer satisfaction and the ROI of marketing activities isn’t a new concept, but with the help of inbound marketing software it is now much easier to accurately measure and analyze key performance indicators.
How to Leverage Marketing Analytics to Drive Better Business Decisions
1) Optimize your lead generation activities
Historically, organizations struggled to measure marketing’s performance, even from a high level. Now, lead intelligence captured through inbound marketing can be used to accurately measure how a lead found your website, which actions moved them through the customer lifecycle and ultimately into a paying customer.
This rich lead intelligence coupled with sales data, enables organizations to breakdown the performance of their sales process and identify areas for improvement. For instance, if you understand the lifetime value of a customer you can better manage how much you're spending on lead generation activities and optimize your cost of customer acquisition.
2) Continuously measure and improve close rates
Without a baseline to work from, you have no way of knowing whether sales and marketing activities are helping or hindering your ability to close business. Marketing analytics can help sales teams identify their lead-to-customer close rate and continuously test and optimize new strategies to close more business.
Additionally, it is important to note that leads generated from cold calling are not necessarily equal to those who independently seek out your website and download a whitepaper. Inbound leads may in-fact have a much higher close rate than outbound efforts. Marketing analytics help organizations focus their efforts on activities that yield the highest ROI and eliminate low quality, high cost strategies.
3) Learn from real customer feedback
Customer satisfaction used to be measured by conducting phone interviews, collecting in-store comment cards or paying people to attend focus groups. Thanks to social media, marketers can now measure customer satisfaction in real-time using social media sentiment analysis. Social media monitoring can identify trends in industry conversations and pinpoint leads and customers seeking help. If the marketing team notices a spike in conversation about a problem with a product it can be a leading indicator that further action may be required.
These are only a few examples of how marketing information can lead to better business decisions. Part two of this blog post will explore why marketers should care about each of these seven business metrics and shows how they are calculated.
So What Does This All Mean?
In conclusion, marketing and business analytics are really a two way street – without marketing data business analytics simply wouldn’t tell the whole tale, and vice versa. Marketing analytics lean on business data from other departments, primarily sales, to provide feedback about the downstream impact of marketing efforts.
- Marketing analytics measure the complete impact of marketing efforts, taking into account both on and off-line activities
- Marketing analytics help organizations make faster, data-driven business decisions that are focused on real customer feedback
- The benefits of well executed marketing analytics reach far beyond the marketing department
- Marketers have more access to data than ever before and as a result spending on marketing analytics is expected to increase 60% by 2015
Businesses that take advantage of analytics are positioning themselves for success. Can you identify what is working? What needs help? What demands a pivot? If you keep going with the status quo will you ever have the full picture of your business performance?