Analytical marketing is the evaluation of data derived from marketing campaigns through different channels such as email or social media. In simple terms it lets you see how good (or bad) your campaigns are performing. Armed with these statistics, you can work out how to improve them too.
What is Analytical Marketing and Why Should You Use It?
Analytical marketing provides information that businesses in any industry can use to their advantage. No matter if you are trying to increase sales or brand awareness, analytical marketing can help. Most businesses who offer email lists or newsletters collect information about their consumers and build large databases. These databases are then used as information when deciding on business decisions.
Many companies track their customer preferences and keep data on their likes, retweets and other shared content on social media. They also track which websites customers visit the most often and for how long. Marketers can then evaluate the success of their campaigns by measuring the performance using business metrics such as ROI and conversion rates.
All this data gives important insights into how a customer reacts with companies and vice versa. By collecting data about customers and taking into account what they do, businesses are better able to cater to consumers needs.
Who Uses Analytical Marketing?
In a recent survey from February 2012 it showed that companies with less than $25 million in revenues currently allocate 4.8% of their marketing budgets to analytical marketing. Companies with sales revenues of $10 billion or more currently allocate around 7.3% of their marketing budgets on analytical marketing. In the next three years, those percentages are expected to increase to 7.3% and 10.8%. As you can see, the analytical marketing industry is growing yearly with no signs of stopping.
A good example of a big company using analytical marketing is Coca-Cola. Coca-Cola ran a promotion on their bottles of Coke where users would enter a promotional code online in a bid to win prizes. The whole campaign was aimed at the younger and more “tech savvy” generation. This is because Coca-Cola was trying to connect more with its younger audience.
By using one of their websites called MyCokeRewards.com they managed to gather important data and behaviours about their younger consumers. With this data they were able to communicate with them more effectively thanks to email marketing campaigns and an improved demographic of their consumers. Between 2007 and 2008 the site increased the number of visitors by 13,000 percent which is very impressive.
It’s not just billion dollar multi-national companies that use analytical marketing. As it is very effective in any industry even non-profit organisations use it to help increase awareness and attract donors. Non-profit organisations use analytical marketing strategies to track current and potential donors online.
For example, a non-profit organisation might get more donations online from a certain country or area. This provides them with valuable information they as know which areas to allocate funds. Without analytical marketing it would merely be a guessing game, hoping donors would somehow stumble across them.
Why is Analytical Marketing Important?
As businesses have expanded into new marketing categories such as email marketing and social media. New software and technology have been made to support them. The problem with this new technology is that the technology is normally used in isolation. The result is a collection of data from different market categories with no way to analyse them.
Marketers often make decisions based on data from an individual marketing channel. By not taking into account the entire marketing picture of all the channels, they are missing the bigger picture.
Social media data on its own is not enough to work off. Neither are website analytics. Analytical marketing, on the other hand, considers all marketing efforts across all channels over a specific timeframe. This is essential for making effective business decisions to go forward.
You can compare your social media likes and shares to your website traffic and analytics to see if your social media really is increasing your visitors. Rather than if people are just liking your posts and Tweets but never actually clicking on the link.
What Can You Do With Marketing Analytics?
So where do all the statistics and data come from? There are many ways businesses can collect data from their customers, but the main methods are:
- Online Surveys
- Opinion Polls
- Online Customer Tracking
- Email marketing campaigns
Obviously, the best way to collect the data depends on the business and their target audience. You wouldn’t really want to collect data from an older age group using online surveys and questionnaires as most of them are not tech savvy. Instead, you would most likely look to use direct mail questionnaires with a traditional pen and paper which they would be more comfortable with.
Just like the previous Coca-Cola example, you wouldn’t expect young kids to reply to questionnaires sent to their house. But if you send them an email with an online questionnaire and a chance to win cool prizes they’ll probably reply instantly right?
What Can You Do With The Data?
With marketing analytics, there are a number of things you can do with the data. You can ask questions such as:
- What is our conversion rate this week?
- How does it vary from last week?
- How can we improve it?
By collecting the simplest of data such as the customer’s age and region you can work out:
- Who is your target audience
- What would be the best channel to communicate with them
- Which channel would offer the best return
Now you understand analytical marketing, you can see how collecting data about your customers can answer some important questions. These answers will help improve your business if you use them to your advantage. Without this data it would be a lot harder to work out your target audience. Furthermore, it also means your marketing efforts would probably go to waste. If you stick to the data and use it correctly, you’ll see the benefits of analytical marketing in no time.