To help improve efficiency in business and to make sure investments in marketing are spent wisely, business owners can use marketing data and statistical analysis.
Here are five places business marketers can use analysis to help their efforts:
1. Campaign Effectiveness
Perhaps the most pressing issue for many business owners trying to improve efficiency in business marketing is determining ROI (e.g. knowing whether a TV campaign or other initiative boosted sales higher than they would have been without the campaign).
“The two key questions data can answer is, first, what is the effectiveness of that campaign? How many new customers did it stimulate?" says Pavel Dmitriev, vice president of data science for Outreach, a Seattle-based sales engagement platform.
“Question number two is how can I improve the effectiveness of this campaign?"
Business marketers can get answers using A/B testing. To do this, they prepare a campaign, such as a sales email, then randomly split their target audience into two groups—A and B.
Marketers then prepare emails making different pitches and and send one to each group.
Collecting and comparing data on open rates, click rates or sales revenue from the two groups reveals how effective the campaign was compared to the other campaign..
“This is a really nice technique, and it's very simple to set up," Dmitriev says.
Statisticians apply a statistical test, usually t-test, to determine if the difference observed in an A/B comparison is real or noise.
Many email marketing platforms have built-in tools for creating and comparing A/B testing campaigns. To get the best results, according to Dmitriev, marketers should try to use platforms that employ statistical testing.
A/B testing can also be done with other types of campaigns. Sellers of broadcast, print and outdoor advertising can provide survey responses, numbers of impressions, audience demographics and other data to help evaluate these campaigns.
2. Market Segmentation
If a business owner can modify their campaign to better suit different market segments, it may be able to generate more return than a single one-size-fits-all campaign.
To do this, marketers divide customers and prospects by attributes such as age, location and income.
“Then you can group all the customers with similar values for this attribute," Dmitriev says.
Either way, it's possible to identify market segments that are more likely to buy or respond to a particular offering.
3. Marketing Mix
Marketers also want to know which marketing channels work the best. With social, mobile and other channels coming online, this issue has become more important than ever for small and medium-sized businesses trying to improve efficiency in business with limited budgets.
“Now with digital there are so many different channels you can look at," says Pete Sena, founder and CEO of Digital Surgeons, an innovation agency with headquarters in New Haven, Connecticut.
Sena suggests owners start by investigating where their current customers are coming from. Customer relationship management platforms and stakeholder interviews can be sources for this data, he says.
Free and affordable digital marketing tools like Google Analytics and Hubspot can also help marketers pinpoint just where their traffic is coming from, what visitors are doing and what content is performing well, Sena says.
Brick-and-mortar businesses that draw customers from a limited area can use surveys and hyper-local targeted ads to get data.
“The best way to deal with the local footprint is to understand how people are discovering your business," says Sena. “For businesses with a local physical presence, local channels are integral to their success."
4. Brand Recognition
How widely known a company's brand is in its market can determine how effective its product and service campaigns are likely to be.
Marketers seeking to improve efficiency in business may decide to spend money shoring up a weak brand before putting resources into campaigns pushing specific offerings.
Marketer evaluating their brand recognition can improve efficiency in business with the help of information from online sources. For instance, knowing terms people use to find their websites can help businesses understand how brands are perceived.
“What is your business known for? Ranking for?" asks Sena. “How many times has my brand been searched for?"
Search engine data can help answer these fundamental marketing questions. That can lead to business owners refining their strategy for reaching and engaging with current and future customers.
5. Customer Satisfaction
Business owners seeking to improve efficiency in business are rightly concerned with how customers perceive product quality and service. Here, data and analysis can also give penetrating insights.
“One of the best ways to measure customer satisfaction is traditionally with net promoter scores," says Sena.
Other useful customer satisfaction-related data includes customer lifetime value and retention rates.
The best way to deal with the local footprint is to understand how people are discovering your business. For businesses with a local physical presence, local channels are integral to their success.
—Pete Sena, founder and CEO, Digital Surgeons
To get net promoter scores, marketers ask customers how likely, on a scale of 1 to 10, they would be to refer someone to the company or offering. Answers of 9 or 10 identify promoters, 7 and 8 are neutral and 1 through 6 are detractors.
After calculating the percentage of survey respondents in each group, marketers subtract the percentage of detractors from the percentage of promoters. The resulting number is the company's net promoter score. When it comes to net promoter scores, the higher the better.
A Data Drawback
When statistically analyzing data, more is better. Larger datasets make it possible to filter out noise and produce trustworthy answers.
So businesses with hundreds rather than thousands of customers may need to be more cautious with data analysis than bigger enterprises, Dmitriev says.
“In large audiences, the issue of noise is reduced but in smaller ones it's significant," he says.
However, inexpensive software and platforms today make it much easier to analyze marketing data effectively, even for business owners without statistical training.
“Big companies have already embraced it and small companies are moving in that direction," Dmitriev says. “What helps is that tools have become available that hide the complexity of statistical analysis from the user, making it possible for anyone to benefit from data analysis."
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