Ways to use marketing analytics to improve sales
Even though there are many options available while using data analytics, why do some businesses typically rely on one single approach? Business leaders are now exposed to better and bigger analytical tools than before to generate better decision-making. The ability of such tools improves growth, conversion rates, and MROI (Marketing Return on Investment).
The ideal way to improve marketing effectiveness is to combine the various MROI options in such a way that it allows the best alternatives of each to shine.
Let’s take an example: A client in the US from the insurance industry managed to improve their productivity in marketing by more than 15% each year from 2009 to 2012. Company succeeded in maintaining the same level of marketing spending over a period, whereas for other businesses spending on marketing was raised over 60%. Using analytics in marketing, improved the way it made important business decisions.
Using analytics to define strategy
The main strategy of the business is to define its analytical choices. Without a firm base, companies usually allocate marketing budgets based on previous year budgets or based on the best-performed product in the last quarter results. Such kind of approach leads to a political approach rather than the analytical approach. Political approach favors those sections which are already doing better instead of developing the areas where improvement is required.
It is better to measure proposals on their economic worth or on expected returns. Opting products or services based on the scores they have obtained for allocating marketing budget, will be a concise method to make comparisons. Such number metrics can be combined with predetermined conditions such as prior commitments, baseline budgets, and media thresholds.
Understanding customer’s purchasing behavior is one of the pre-requisite in creating an effective MROI portfolio. Consumer behavior has changed a lot during the last few years, ideas such as age-old marketing ‘funnel’ no longer work.
For instance, a company spent a large share of its marketing dollars to sell home appliances in magazines, newspaper, TV and display adverts, in order to create brand awareness among its target customers. Once the company performed the analysis and found that most people searched home appliances by browsing sites. Less than 10% of customers visited their own company website. So as per the analysis, the company started to invest in website content rather than traditional advertising, as a result, their e-commerce sales increased by 20%.
With the use of new and better data sources, marketing analysis has improved. Business needs to rectify or correct some approaches, but the key to success is to develop a creative approach to unlock new opportunities using data. Soft skills play an important role when quality and availability of data is uncertain. For example, we can calculate how many people respond to an email campaign using data. But in other areas, it’s not so easy to define. This kind of challenge, however, should not restrict the use of analysis to enable better decision-making.