Chapter 2: Decoding data-driven decision making for marketing

Talking about data-decision making is not a sexy topic. It is not a shiny new thing people jump into for quick revenue and overnight market expansion. Using data for decision-making in marketing is a hard skill you learn over time.?

Within this time, you will soon realise that data is not just a collection of numbers and statistics; it's a powerful narrative that tells the story of your customer behaviour, preferences, and hidden desires.?

In this chapter, you will understand why data matters, how to identify the right metrics to focus on, and some limitations of relying too much on data for decision-making.?

Striking the balance between intuition, data, and critical thinking

Allow me to share a personal anecdote from the early days of my marketing career.?

During my time as a Marketing Manager for a real estate organisation, I immersed myself in creating a robust market research report. I created an in-depth analysis of competitors, pricing structures per square metre, market share, local power acquisition, and socioeconomic status of consumers around the desired area.?

Armed with this knowledge, I then crafted a solid marketing plan with targeted strategies. From conceptualising a new branding identity, and refining the messaging and tone of voice, to creating sales manuals, radio ads, social media campaigns, organising PR events, and crafting engaging newsletter emails, every detail was meticulously planned.?

The outcome? We not only met but exceeded our client's goals within a remarkable nine-month timeframe.

However, despite my passion for market research, I quickly realised its limitations. While it forms the foundation of understanding the market-product fit, it isn't the ultimate solution to achieving marketing goals.

Execution is the key.

As a novice marketer, I may have, in my enthusiasm, exceeded the budget. I juggled numerous responsibilities and wore multiple hats that exceeded my research marketing skills. But with the unwavering support of my exceptional boss at the time, we wouldn’t have been able to navigate challenges.?

We learned from our missteps and emerged stronger.?

This experience taught me a vital lesson that I now share with you: having access to a plethora of data alone won't guarantee success. The pivotal factor lies in the application of intuition, critical thinking, and problem-solving skills coupled with data as a part of your business strategy.

Without this essential mindset shift, tactics derived from data risk falling flat. Only data-driven insights and intuitive human understanding will propel your marketing strategies towards success.

Empowering decisions: fostering the data-driven mindset

Beyond tools and techniques, fostering a data-driven mindset is pivotal. Here are some skills that you need to develop to make better data-driven decisions.?

Metric literacy

The first thing you need to do is have a strong foundation of what marketing metrics are. You should be able to understand what they mean, its use cases, and how they can help you understand the bigger picture.?

Here's an exhaustive list of some essential marketing metrics you need to focus on when evaluating the success of implemented campaigns, and strategies:

• Customer Acquisition Cost (CAC): Measure the cost of acquiring a new customer, including marketing and sales expenses. Sounds like a fancy term, but it is truly the North Start for any activation or event marketing strategy. It answers, was it worth attending this event and why?

• Customer Lifetime Value (CLV/LTV): Determine the total revenue a business can expect from a customer throughout their entire relationship with the company. Luckily, today’s online CRM tools like Hubspot and Pipedrive let you calculate this very easily. You just need to make sure you strategically monitor your proposals and offers in a streamlined way.?

• Conversion Rate: The vein of our existence as marketers but a strong starting point to understand where in our touchpoints are customers leaving. You can use it to calculate the percentage of website visitors or leads who take the desired action, such as making a purchase or filling out a form. This is where content and growth strategies come in handy.?

• Return on Investment (ROI): Not a big fan of this metric, as it can derail marketing efforts in the short term but it helps evaluate the profitability of marketing campaigns by comparing the revenue generated to the costs incurred. You just need to make sure you understand the seasonality of your market.?

• Churn Rate: Assess the rate at which customers stop doing business with a company, indicating customer retention levels. Surprisingly, not a lot of people like to discuss this metric. Of course, it is important to focus on the wins. But it is really important to understand why and when people leave your funnel, especially if you have invested a good chunk of the budget in advertising.?

• Net Promoter Score (NPS): Measure customer loyalty and satisfaction by asking how likely customers are to recommend the company to others. I found this helpful for online businesses and services, but you do need to have quite a bit of volume for it to be considered significant. Additionally, it is crucial to contextualise it and benchmark it against competitors in the same area and other similar products. The same service can have different NPS depending on the country or audience due to cultural and market conditions at play.

• Click-Through Rate (CTR): Similar to the conversion rate, it helps evaluate the effectiveness of online ads or email campaigns by measuring the percentage of users who clicked on a specific link. This is the holy grail of any sound digital marketing strategy.?

• Social Media Engagement: Unpopular opinion, but unless you are a B2C company, measuring social media engagement is low-hanging fruit. More often than not, likes, shares, comments, and overall interaction with social media posts can become vanity metrics. The success or failure of a business, event or product can rarely be easily determined by the social media success of a post. Don’t get it twisted though, having a social media presence is indispensable in today’s world but it needs to be part of a robust business strategy to make it work.?

• Email Open Rate: This determines the percentage of recipients who opened an email, indicating the effectiveness of email marketing campaigns. Make sure you benchmark it internally and externally if possible. Many email marketing platforms will have this data available for you. Trust them and leverage them to your advantage.?

• Customer Segmentation Metrics: Help analyse metrics specific to various customer segments, enabling personalised marketing strategies. These include a wide range of both quantitative and qualitative metrics like demographics, geographic region, profit levels, purchase or transaction history, interests and lifestyles, lifecycle, and market size growth or decline.?

• Website Traffic Sources: Websites are your forever sales tools. Make sure you understand where website visitors are coming from whether it is organic search, social media, or paid ads to optimise marketing channels and budget decisions. Google Analytics is the holy grail tool for this.?

• Customer Feedback: Customers: always leave feedback, businesses: listen to the feedback. You won’t believe the times I’ve seen customers or users leave critical feedback on the content of the product and it remains dormant due to companies not implementing it, and then they wonder why they are not succeeding and no one is repurchasing. Always check the feedback.

• Content Engagement Metrics: Evaluate the performance of content marketing efforts through metrics like time on page, scroll depth, and bounce rate. Understand the benchmark rates for these metrics since they can be widely different from industry, sector, product, and period. Context is crucial.?

• Influence and thought leadership: Track metrics related to industry influence, such as speaking engagements, guest articles, and social media influence. Monitoring what other organisations say about you is very important. Meltwater and SparkToro are great platforms to help you monitor this.?

• Competitive analysis metrics: Monitor metrics related to competitors, such as market share, customer reviews, and online visibility. This is a great way to analyse where you are, where you could be, and what gaps you can fill.

Critical thinking and problem-solving aptitude

Critical thinking skills are essential for questioning assumptions, evaluating data sources, and scrutinising methodologies. A critical thinker in the realm of data-driven marketing can identify biases, potential errors, and logical fallacies, ensuring the integrity of the insights produced. As I outlined in the examples above, it is not obvious sometimes what metrics might mean in isolation. A 1.2 view page rate and 80% bounce rate would be perfectly fine for a blog, but those same metrics for a SaaS homepage might not be great news.?

Acquiring these skills comes from continuous learning, guidance, and, whether people like to admit it or not, experience. Sometimes, we do need to make mistakes to comprehend the nuances of our markets and customers. Collaboration and communication are also needed to arrive at sound conclusions faster.?

The faster you learn from your mistakes, the better. Then, focus on solving the problem as efficiently as possible. But accept that marketing budgets are underestimated a lot of the time because they are created with a static time frame in mind, and time is never static.? It’s great when we can control the things we can control and do great at that, but what we do with what is out of our control is a discipline that few can afford.?

If it’s any consolation, according to reports, the Barbie movie went way over budget and still managed to be a resounding success with its audience. Sometimes companies don’t have the marketing budget to educate their customers on the benefits of their product, and therefore launches fail.?

All in all, fostering a data-driven mindset in marketing requires a multidisciplinary approach.?

Key performance indicators need to be established before launching a campaign, and these KPIs need to be aligned with the business goals. By honing these essential skills, I hope that you can confidently navigate the data landscape, make informed decisions that drive impactful marketing strategies, and elevate organisations to new frontiers.?

Data analytics tools for every marketing budget?

Below I compiled a list of data tools you can start implementing in your organisations.?

Free or low-cost tools:

• Google Analytics: Provides comprehensive website analytics, user behaviour insights, and conversion tracking.
• Google Data Studio: A free tool for creating interactive and shareable dashboards, integrating data from various sources.
• Google Trends: Helps in understanding search trends over time and across regions, aiding in keyword and content strategy.
• Meta Business Suite: Provides detailed analytics about your Facebook page, audience engagement, and ad performance.
• Twitter (X) Analytics: Offers insights into tweet performance, audience demographics, and engagement metrics.
• LinkedIn Analytics: Provides data on company page performance, follower demographics like job and industry, and content engagement.
• TikTok Creator analytics: Provides detailed insights for content creators, including video performance, follower growth, audience demographics, and engagement metrics.

Mid-Range Budget Tools:

• SEMrush: Offers competitive analysis, keyword research, backlink analysis, and site audit tools for SEO and content strategy.
• Moz: Provides SEO tools like keyword research, site audit, and link analysis, helping in optimising online presence.
• Ahrefs: Known for its robust backlink analysis and competitive research tools, aiding in SEO strategy.
• Buffer: A social media management tool with analytics, scheduling, and content publishing features for multiple platforms.
• Hootsuite: A social media management platform offering scheduling, analytics, and team collaboration features.
• Metricool: Offers comprehensive social media analytics, allowing businesses to track performance across various platforms, schedule posts, and analyse audience engagement, streamlining their social media marketing efforts.
• Similarweb: Provides in-depth website and app analytics, offering insights into traffic sources, audience demographics, and competitor analysis, enabling businesses to optimise their online presence and stay ahead of the competition.
• Baremetrics: Focuses on subscription-based businesses, offering subscription analytics, churn analysis, and revenue insights, helping businesses understand their subscription metrics, track growth, and improve customer retention strategies.

Higher budget tools:

• HubSpot: An all-in-one marketing automation platform offering CRM, email marketing, social media management, and analytics.
• Pipedrive: Offers sales pipeline management, lead tracking, email integration, and reporting.
• Adobe analytics: Provides advanced analytics and AI-powered insights for detailed customer behaviour analysis.
• Tableau: A powerful data visualisation tool that helps in creating interactive and shareable dashboards, transforming raw data into actionable insights.
• Salesforce marketing cloud: Offers comprehensive marketing automation, customer journey mapping, and analytics for personalised marketing campaigns.
• IBM Watson Analytics: A cloud-based AI analytics platform that assists in data exploration, predictive analysis, and decision optimization.

To conclude

It is important to recognise that data-driven marketing, while pivotal, cannot single-handedly resolve all your challenges. Even if marketing efforts yield significant results in areas such as brand awareness, social following, or improved SEO rankings, these contributions could remain marginal if the broader aspects of the business are not managed.

When organisations fail to comprehend the intricate interplay of all the rest of the business components, data-driven insights, no matter how profound, can only be as effective as the implementation strategy allows. It is not uncommon for campaigns, packed with insightful data, to falter due to weak brand positioning, subpar team dynamics, inadequate customer support systems, or products that lack a solid market fit. This misalignment often occurs when marketing is viewed as a mere checkbox on a to-do list, rather than a holistic strategy integral to the core of the business.

Even the most astute critical thinking cannot shield a marketing initiative from budget constraints. Problem-solving skills, although valuable, cannot elevate one's standing within an organisation unless the project you are trying to achieve is aligned with the overarching business objectives. Similarly, adept data analysis and interpretation do not instil trustworthiness in an environment that does not value these skills.

As marketers, we must continue to educate and advocate for the true essence of marketing. Data-driven marketing is not a fleeting trend; it forms the basis of a robust business framework. Ignoring the insights gathered from data analysis may inadvertently pave the way for competitors or dissatisfied customers to seize the opportunity, potentially leading to repercussions we want to avoid.

Integrating data-driven strategies into every facet of the business is not merely advisable; it is a strategic imperative ensuring not only the survival but the thriving of an organisation. By embracing the power of data-driven decision-making and weaving it into the organisational fabric, businesses can navigate the complexities of business with resilience and foresight.?

Every touchpoint deserves to be filled with some magic marketing fairy dust and delight customers every step of the way. After all, if marketing is about storytelling, data are the moments where the human on the other side of the screen will feel seen.?