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.
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.
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.
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.
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.
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.
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.
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.
Key Takeaways:
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?
Originally published Feb 6, 2014 10:00:00 AM, updated November 27 2017