Marketing analytics is an important tool for small business owners. In this small guide, you will learn how to create better marketing campaigns using data.
Marketing analytics is the measurement and analysis of marketing data to find patterns and insights that can improve marketing performance.
Overview of Marketing Analytics
The goal of using analytics is to understand how customers interact with your business digitally and determine how you can improve the success of your business through marketing. This includes identifying revenue patterns, segmenting users, and building comprehensive data sets that reveal important details about customers' buying habits. With the right information, you can create effective, targeted marketing campaigns.
Nectar, an e-commerce mattress platform, is a growing company making a splash in the online retail mattress space. Craig Schmeizer, the co-founder of Nectar, said tracking data allows a company to better connect with its customers.
Understand, Interpret, and Optimize
The first step in using marketing analytics is to understand how customers interact with your business. This means prioritizing data that provides insight into how many customers visit your site. How long do they stay on specific pages of your site? So, these products sell the most and to whom, how customers are directed to your site, and whether various campaigns like email marketing are successful.
Once you know how your business is doing, you can start developing a strategy. It will also help you determine your marketing campaigns and tools' effectiveness.
"Marketing analytics is absolutely essential to my team," says Sebastian Bryers, co-founder and chief technology officer of nutritional supplement company Ora Organic.
When deciding which analytics tools to use, choose tools that provide insight into how customers interact with your business from an online and marketing perspective.
Once you have gathered all the relevant information, think critically about what each category means. Try to understand why certain marketing campaigns are successful and why others may be faltering. A/B testing, a feature offered by some marketing analytics platforms, can be used to test this idea. You can learn more about what works best for your company by changing one component of your conversion funnel and comparing the two changes.
Interpreting data and running tests to gain more insights can be challenging. Depending on your needs as a business owner, it may be a good idea to hire a marketing consultant or add someone to your marketing team who has experience interpreting data and creating marketing campaigns.
Once you have gathered and interpreted the data, you can adjust your marketing approach to increase conversion rates. A common practice at this stage is segmentation. By segmenting customers based on their purchase history, you can create targeted marketing campaigns aimed at converting the same type of user. Through research, you might even find that a new strategy opens up an entirely new customer base that has not been aware of your business before.
How to Use Marketing Analytics
Let us take a look at some of the ways you can use marketing analytics to grow your business.
Reports on the Past
The past is very important to marketers. That's because the history of marketing usually goes like this: First, you apply a marketing tactic. Then you give it some time to produce results. Finally, you review those results.
With this in mind, marketing analytics helps you answer questions like:
- How much organic traffic did our content generate last quarter?
- How many new leads did campaign A generate compared to campaign B?
- What was the conversion rate from trial signups to paid subscriptions?
- What was the average abandonment rate last year?
The good news is that in most cases, marketing analytics software automatically tracks and measures the most common metrics. However, setting up these tools as soon as possible is important to avoid data gaps.
Analyze the Present
Marketing analytics can also answer some "present" questions, e.g., related to patterns in customer behaviour, trends, current budget spending, etc. For example:
- Why is organic traffic to our blog declining?
- What percentage of our customers are using the [feature] of our product?
- What is the lifetime value of our customers?
- What is our current ranking for [search query] in Google?
And when you have insights into your past performance and current state of affairs, you'll be ready for a task that marketers are always asked to do (but few can): predict the future.
Predicting the Future
This is the entry point to predictive analytics, which is the creation of data-driven assumptions about what may happen in the future. Predicting the future is why marketers do not just create reports for the sake of creating reports.
For example, if a marketer can demonstrate a positive return on investment for a particular marketing tactic based on past performance, they can predict future performance fairly accurately. Often, this is enough to get the marketing budget needed.
This is also where we get into the realm of prescriptive analysis, that is, analysis that answers the question, "What should be done?" For example:
- What kind of page layout should we use? You can use A/B testing software to test your options.
- What kind of message should we send to a potential customer to increase the chances of conversion? Marketers can create models of optimal conversion paths and then test them by setting up automated email workflows.
- What keywords should we target in our content? SEOs and content marketers conduct keyword research for this purpose.
How to start the marketing analysis process
Whether you want to perform ad hoc analysis or develop a set of metrics that will appear in recurring reports, this simple four-step process will help you focus on what's important.
1. Identify what you want to measure.
As you can see in the sections above, there are many different things that marketing analytics software can track and measure for you. However, this tempts you to just go ahead and look for any kind of insight.
You may gain some insights this way, but it's more effective to determine what you're looking for first and leave less to chance. In other words: If your analytics tool were a person, what questions would you like to ask him?
For example, let's say you invest heavily in creating content that will rank well in Google searches. Since your competitors are doing the same, here's what you want to know: How visible is my content in the SERPs compared to them? This is a metric known as Share of Voice (SOV).
Now that we've asked our sample question, we can move on to the next step.
2. Assess your abilities
There are two questions to ask here:
- Do you have access to high-quality data?
- Are you able to extract and process the data?
And there is no other way to answer these questions than to learn more about your research question.
This step may sound trivial, but it's actually crucial. After all, if you dive headfirst into an analysis problem that is best left to someone else (e.g., a data scientist or an outside consultant), you are probably just wasting time instead of spending it better on something else.
And that's a common problem in marketing teams. One study found that only 1.9% of marketing leaders said their company has the right talent to use marketing analytics.
So, whatever your research question might be, just try Googling it first. Chances are someone has already developed a product or service to solve your problem. A simple query like "share of voice" might lead you to our how-to article, for example.
3. Collect data with the help of marketing analytics tools.
Continuing our example of calculating SOV, we learn (after brief online research) that you can solve this problem without any special knowledge using an SEO tool like Ahrefs. To give an example, one of the techniques has three steps:
- Enter the keywords you want to track and add them to Ahrefs' rank tracker.
- Set the domains of the competitors you want to compare with
- Access the Competitor Report and see how your data is automatically calculated and visualized on the Visibility tab.
4. Draw conclusions
Rank Tracker's visibility report allows you to analyze the present by making comparisons with your competitors, and you can even create a report about the past SOV. You can do even more if you try to find the reasons behind these numbers and find solutions for future improvements. This is true even if you generally outperform your competitors at the moment.
Just below the visibility report, you'll see a report on keyword positions compared to those of your competitors. And if you sort the results by one of your competitors, you'll see the keywords where they are performing better than you.
This knowledge is a great starting point for spotting low-performing content and then using SEO tactics to improve rankings. Examples:
- Get more backlinks
- Refreshing content
- Optimizing page speed
- Upgrading pages with internal links
Basically, in our four-step process, we went from having an idea of what we should be measuring to finding precise areas where we can improve our marketing efforts. And that's the heart of marketing analytics.
As a business owner, you should include metrics in your marketing strategies. Whether you use Google Analytics or another marketing tool, collecting data about your customers can help you deliver more of what they want (and less of what they do not).
By all means, start small and build in your marketing software as your business grows. Remember, it may be a good idea to hire a marketing consultant to interpret data and create new campaigns.