It’s OK to make decisions in your personal life based on hunches. But when it comes to running a business, a bad guess can be costly.
Take the case of a $6 million e-commerce company that was starting to lose market share rapidly. Its marketing team and leadership couldn’t understand why they were spending so much on online ads. The bills just kept getting worse and worse with little to show for all the funds spent. As it turns out, incorrect assumptions were the root cause of the skyrocketing advertising bills and unfortunate results.
Here’s what happened: The team members presumed that to make money, they needed to hit a 3X return on spending for all their ads. So they underbid the majority of their opportunities to reach that target. But they never dived into the data to figure out why that process wasn’t working. Why? They hadn’t learned how to use analytics in marketing.
Because our team comes from a growth hacking mentality, we took a different route and immediately ran the numbers. What we found was that they were putting all the emphasis on the wrong sales. As it turns out, newer customers tended to make small purchases. However, those who became repeat buyers bought way more. In other words, the company had to stop worrying about how much they made on their first sales. Instead, they needed to find better ways to bump up customers’ lifetime value.
This experience should help emphasize just how important data analysis is for marketers. If you don’t have data or data-driven metrics, how can you possibly support or improve any choices? You can’t. That means you have to be willing to let go of guesstimates in favor of facts.
Overcoming the Perceived Barriers to Adopting a Data-Driven Digital Marketing Mindset
Although letting data drive the ship makes sense for our team, our clients sometimes have trouble embracing data-driven digital marketing strategy mindsets at first. Even those who appreciate that we don’t make any moves based on unsupported opinions, emotions, or ego may not understand why regimented processes are necessary to reach ambitious goals.
Many times, clients fall into the trap of believing that it’s just too hard to use data. It’s not a large or insurmountable task, though. All you have to do is start by identifying a few simple key performance indicators (KPIs) that you feel will accomplish your objectives. For instance, if you want to get the pulse on your sales figures, you’d be wise to look at month-over-month and year-over-year comparisons. Look for patterns and trends. Just a little data analysis is all you need to begin.
Interested in learning more tips on how to implement data-driven marketing solutions that offer you results, not to mention confidence? You can start by adopting these strategies.
- Create tracking systems to collect data.
It’s great to establish and understand which specific metrics and KPIs are important to your company. That way, you can leverage all those analytics for business growth. Additionally, you need to put tracking systems in place to grab data. The data can then be leveraged to help you set milestones and benchmarks.
Remember that any tracking system you use should have both quantitative and qualitative aspects. For example, you can’t just rely on your Google Analytics or HubSpot insights. You need to gather other “soft” information such as customer sentiment. This gives you a fuller picture of how to proceed. Competitive analysis can fall into this category, too.
- Aim to measure data in real time.
A data dashboard is an enormous asset, but only if it allows you to see your data in real time. You may have to set your KPIs and data manually to feed information to you live. Real-time insights will show whether you’re on course or need to pivot right away.
Of course, you have to keep your dashboard on display so you can monitor it regularly. You may also want to set up alerts. Again, keeping a close eye on what’s occurring in the moment allows you to make changes and set new goals as necessary.
- Test your assumptions.
When you have a hypothesis or assumption, go through a scientific method to test it. You might want to run an experiment with predetermined pass/fail criteria “scorecards.” Alternatively, you could rotate copy in and out of ads to see which creative performs best and when.
Are you going to market a product or service feature change? Push it live to a small subset of your target audience to watch and see the response. Your role is to question everything and test all your suspicions. Sure, you might have years under your belt as an expert marketer, but you still need data to back up your assumptions.
It’s time to think of marketing and data as going hand in hand in the sphere of advertising. If you’re just going with the flow and not married to utilizing all your data-driven marketing analytics, you’re not marketing for long-term success. Instead, embrace a growth hacker mentality and fall in love with data. It’s an immensely valuable skill set that will differentiate you and never go out of style.
To learn more about growth hacking and see how data-driven marketing can work for your business, contact us today.