A company’s marketing activity has outgrown its scope more than ever in recent years. Although it was considered as one of the core factors of the business, the growth of technology and the easily accessible social media platforms has given a new perspective for marketing. Therefore, when we compare the way marketing is carried out today to what it was 10 years back, the difference is significant and huge. These changes are according to the trends that the businesses find themselves in, at different points in time.
According to a report, about 90% of the marketers are ‘very confident’ or ‘somewhat confident’ in their investment’s influence on the revenue. But how sure are we that the measures taken, changes implemented, or the strategies formed are sure to bear fruits? If our efforts did bear fruits, what is that key aspect that has contributed to the success? If we realize that we lack fruits, where exactly have we gone wrong? How do we identify them? This is where about 52.7% of the marketers stated the use of analytics in marketing for a crystal clear understanding of their operations. But then, what is it? How does it help? Well, let’s read on to discover the answers to the questions.
What Is Marketing Analytics?
Marketing Analytics can be described as a process of measuring, analyzing, as well as managing the entire strategies and performances of marketing. The process’s motive is to boost effectiveness and ensure optimum utilization of the resources to achieve maximum return on the investments made. Moreover, marketing analytics offers marketers a lens through which the efforts of marketing can be viewed as well as ensure the better usage of the budget allotted for marketing.
Starting from email marketing to the rankings of an SEO, the concept’s application is significant in all business aspects. And those businesses that understand the need for such beneficial tactics definitely wouldn’t ignore the concept of marketing analytics. This is evident as the rate at which companies began to embrace marketing analytics has increased significantly in a short period, as represented in the following image.
Why Is It Important To Implement Marketing Analytics?
Let us consider a definition by the Lenskold Group, known for their leadership in marketing profitability management. It stated that “Companies who make improvements in the measurements and ROI capabilities are more likely to report outgrowing their competitors and a high level of efficiency and effectiveness in their marketing.”
But how do we ensure such desired improvements in our marketing strategy? The pathway for this success is embracing marketing analytics. Refer to the image, which statistically represents the most critical capabilities that support a company’s marketing strategy. As a result of the study, it was identified that marketing analytics is actually as essential as the research undertaken to gather insights.
It is realized that such appropriate and accurate measurements and management are possible using analytics. Therefore, marketers who are more sophisticated encourage the use of marketing analytics. And of them, those who utilize five or more tools in their marketing analytics stack are witnessed to have 39% more improvements in their marketing programs.
However, apart from those discussed earlier, there are other ways that marketing analytics proves to be a better solution partner for marketers. In order to understand this better, here’s a list of aspects discussed that emphasizes how important the concept is for any organization.
Analytics in marketing is like looking through every aspect of the activity from a doctor’s point of view. Firstly, to be aware of every aspect, as tiny and huge as it may be. Imagine a person, who is injured due to a major accident, visits the hospital. Although the doctor is sure that the patient needs an operation to be cured, he asks to take other tests, scans, X-rays, and so on. This is to know where exactly the problem is and how it can be fixed. Entering into the operation without proper awareness might lead the life of the patient at risk.
And that’s precisely why marketing also goes through such analysis. Unawareness might cause undesired consequences for sure. The marketing analytics lets the marketers take a step-by-step approach in discerning and understanding the scenario very well before making any decisions so as to make sure that there are not any regrets later. This awareness of marketing can be of the following 3 categories.
What Has Happened?
With the use of marketing analytics, it is possible to acquire clear insights on the previous marketing strategies that will help in identifying the reason for the results experienced. Thus, the analysis contributes widely to eradicate errors, mistakes, and wrong choices in the future, based on the earlier experiences.
What Is Happening?
Apart from providing insights into the past, marketing analytics plays a key role in providing necessary information of the performance carried out currently. In other words, it offers real-time insights, which are required by every manager to make the right as well as on-time decisions.
What Might Happen?
As much as the awareness of past and present activities of the business’s marketing are important, so is the future’s. Therefore, it is essential to take advantage of marketing analytics, which also includes predictive models that help in forecasting the needs in the future. For instance, the predictive model of the approach will help in identifying if there’s any lead that might turn out to be a client or predict if there’s a visitor who’s about to leave the website. Using these predictions, the company can forecast and be prepared with the necessary and actionable decisions.
Make The Right Decisions Faster
The major reasons for companies to embrace marketing analytics are to make the right decisions as well as to make the decisions on time. As discussed, it is important to have access to accurate and relevant data to enable such effective decision-making. However, only about 22% of the marketers have been experiencing the fruits of data-driven initiatives for marketing. The data may include identifying and retaining new clients, improving the client experience, and so on, as mentioned in the image below.
Each of the mentioned aspects plays a key role in transforming mere ideas into best practices of marketing. For now, let us consider “customer experience,” which is observed to be the third important aspect for small businesses to deploy marketing analytics. According to a study undertaken by factoHR.com, more than 84% of the companies have increased their earnings by directing their focus to improvise their customer experiences. But how are these decisions made? And how do we discern when to make important decisions? Well, these answers are solved by analytics for marketing. The analysis exhibits a clear picture of the entire process and measures the results on a real-time basis. These results help in making the decisions faster as per the needs as well as ensure the effectiveness of the right decision.
Access To True CAC And Marketing’s ROI Insights
Every company differs in determining the metrics for its success. For instance, a study revealed that about 67% of the companies’ sole metric is lead generation. Such metrics are essential for businesses. However, using advanced analytics for marketing is sure to give an added advantage, especially in terms of decision-making, doing something as well as choosing not to do something.
Such important metrics include CAC and ROI, i.e., customer acquisition cost and return on marketing investment, respectively. With the help of marketing analytics and defining the real costs and other relevant aspects, the generated output turns out to be highly reliable. It is discovered that about 35% of marketers said that understanding the ROI of their campaigns is “Very Important” or “Extremely Important.” Therefore, the concept assists in the automatic check and calculations of the metrics if enabled. Thus, the significance of marketing analytics is useful in accessing and determining the value of both the cost incurred for customer acquisition and return of marketing’s investment.
Efficient Distribution Of Marketing Budgets
Another significance of marketing analytics is the discernment of distributing the budget allotted for marketing. It is essential to make sure that the finances are allocated rightly. Because, as much as it is challenging to gather the funds, it is equally challenging to distribute it to. Firstly, to have a basic understanding of the marketing funds allocation, let’s have a look at the general expenses across the marketing programs and operations.
The image shows the breakdown of 8 different factors. However, there might be certain addition or deduction of the factors according to the company’s functioning. The allocation of funds for all these must be determined carefully. While the image clearly depicts that the majority of the fund is allocated for marketing analytics. There’s another study stating that 11% of the total marketing budget is expected to be spent for marketing analytics by marketers.
Moreover, several resources need funds when it comes to marketing. The need for funds depends on availability, time constraints, trends, and so on. However, a study conducted in 2019 identified the four major resources that fall under the marketing budget allocation. Have a look at the variations in the allocation in the three consecutive years.
As every rupee counts for businesses, budget allocation plays an important role in marketing. It is this significance that has resulted in the drastic increase in the need for marketing analytics. With the right analytics-enabled, it becomes easy for the managers to allocate the funds according to the prioritization. Thus, it enables the best output by ensuring the most urgent needs to be sorted out. It also contributes to the eradication of finances of the company.
As depicted in the image below, the budget strategy is one of the top priorities for businesses. It is one of the key indicators to track the economic status of the company. With every passing day, the need to measure, monitor, and track the funds is becoming essential as well as challenging. Therefore, marketing analytics takes up the role of rescuer in this regard.
Enhances Your Customer Acquisition, Retention, And Segmentation
The ultimate motive of marketing is to create awareness and a desire for the product or service among the potential clients and thereby influence them in their purchase decisions. Hence, it can be understood that marketing is that activity, which completely focuses on the clients. Research that was undertaken to identify the key metrics of a CMO found that client acquisition, retention rate, and lifetime value are among the essential ones.
However, with the high level of competition that exists among the companies, gaining and retaining customers is becoming too challenging. This is also an important aspect where marketing analytics plays a crucial role in bridging this gap. Research has found that about 36% of the companies use marketing analytics to assist them in acquiring customers, about 30% to retain customers, and more than 29% to help in clients segmenting. Thus, the majority of marketers have begun to leverage marketing analytics to accomplish the metrics related to clients.
Contributes Highly To Competitive Advantage
Competition is irresistible and unavoidable in the journey of a business’s success. Apart from facing the competition, the success also lies in outgrowing the competitors. And marketing analytics is one factor that highly contributes to the competitive advantage. About 85% of the companies are experiencing success and growth of revenue which improved more than 7% with the use of analytics.
The flow is smoothened with appropriate monitoring and measuring of every aspect related to marketing using analytics. In addition, the right marketing analytics tools help in making the right decisions at the right time. When such possibilities turn out to be a reality, we can guarantee the business’s success. This way, marketing analytics puts forth an opportunity for businesses to thrive in the competition that they go through.
Other Benefits Of Marketing Analytics
Apart from the significance of analytics in marketing that we have discussed, there are other added benefits. A few of them are listed below:
- Strengthens personalization
- It saves an enormous amount of time
- Assistance in understanding the current trends
- Contributes to forecasting the future results
- It helps in determining what and how the elements of marketing work, etc.
Factors That Hinder The Embracing Of Marketing Analytics
Although there are a lot of benefits in embracing marketing analytics, there are a few constraints that hinder its implementation.
- 18.7% of the businesses feel overly complex
- It is not relevant to the decisions according to 24.6% of CMOs
- 56.3% of businesses say they lack processes or tools for appropriate measuring
Let’s Wrap Up
With the faster pace that the development of businesses is taking place, the need to strengthen and redefine marketing strategies is quite essential. So far, we have discussed how in many ways embracing analytics in marketing can assist the business in its journey towards success. Therefore, rather than looking at embracing analytics as a choice, it is high time to realize its utmost need for the company. So,make the right choice and accelerate your operations towards success and overall development of the business.
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