- What is the Marketing Data? Why should we get a handle on our marketing data as soon as possible?
- Business success and marketing data are inextricably linked - that's for sure! Nevertheless what the main key reasons?
- The best usage of marketing data: here are our top 5 ways to use it in order to make your business more successful.
The simple principle and 5 marketing lessons to best use it.
“Marketing Data” sounds like typical jargon that means nothing and has no basis in the real world. The truth is, ‘marketing’ is using any information you get from your customers. The best marketers in the world know that utilising data is the key to marketing & business success. If I could give one piece of advice to any small business it would be: get a handle on your marketing data ASAP.
Marketing data is as broad as marketing or customer interactions. This can be something as specific as the click percentage of 16-25-year-olds within 15km of your business or as wide as the proportion of your customers over the age of 30 and their average spend over the past 12 months. In effect, marketing data is all information that comes from interactions with customers, in person or online. All of this is incredibly useful when it comes to growing your business.
There are my three key reasons as to why business success and marketing data are inextricably linked.
1. Marketing Data tells you who your customers are. This might sound very strange: you know who your customers are, you interact with them on a daily business, but do you know their age range, their business sectors or their business size? Certain tools available will track as many of these key pieces of information for you – the more you know, the better you can target leads.
2. Marketing Data saves you money. If you’re marketing now, then you’re spending money. Even if this is just business cards, flyers or shop branding - your logo and even your business name are marketing. Even spending your time on your Twitter page costs you time and, as a wise man once said, ‘time = money’. If you know more about your market or your customers, then you’ll be able to spend your time or money better, maybe even automating parts of your acquisition funnel.
3. Find out your best customers. Do you know which customers make you the most money? I won’t go into detail here but take a look at the Pareto Principle or the 80/20 rule; the likelihood is that 80% of your revenue comes from 20% of your customers (I’ll get into how to use this a bit later).
So, the data from your marketing can give you incredible insight into your business and your customers. But, how can you use this to grow your business?
Here are my top 5 ways you can use your marketing data:
1. Target the right people. Above I said marketing data could be used to save you money and time. It pays to be more focused. If you find from your marketing data (for example) that 80% of your customers are middle-aged women, then all your marketing efforts should keep this in mind. Do you know which social media your customers prefer? If they’re all on Facebook and not Twitter, then any time you spend on Twitter is wasted. Unless you have money or time to burn, it’s essential to maximise everything you do.
(As an aside, if you do have a bit of money to throw at your marketing next month, think about saving time by outsourcing some of your outreach.)
2. Target people when they need it. This is one of the specifically best uses of marketing data: sell to your customers when they need it. This isn’t as simple or easy as focusing on one social media, but there are few ways to do this. If you’re an online business or conduct any activity online, then you really should look at Facebook’s Pixel. It’s their product that tells you which customers want to buy what and even indicates when they want to buy it. It’s powerful, and there isn’t enough space to explain it here, but it’s well worth the effort to add. Read up on it here. What if you’re not an online business? Well when are your products typically used? If you sell caffeinated drinks, then 8:30 in the morning is a great time to target your customers. If you’re a gym, then January and May are pretty good times to focus. The best thing is marketing data will help you make these decisions by showing you when to focus and whom to focus on (more in number 4).
3. Understand Wasted Effort. Ever heard the phrase “Half the money I spend on advertising is wasted; the trouble is I don't know which half.”? (John Wanamaker (1838-1922)). This used to be the case for marketing, but, using data, you can know precisely what works. You can see where your customers click (tool’s like bit.ly are fantastic), you can use data to see if the places you advertise generate the most revenue. This is like targeting the right people since you can double down on everything that works well and cut everything that doesn’t. Taking John Wanamaker’s formula, you’re practically doubling your marketing effect, at half the cost.
Think about using landing pages and heatmapping plug-ins to fully visualize where your customers are most interested. Again, most agencies should be able to help you sort this and the easy tech available nowadays is game-changing.
4. Focus on High-Value Customers. Throughout this article I’ve mentioned focusing on key targets, demographics & times. All of this comes down to the 80/20 principle. It’s one of the more fascinating rules in business and economics.
It came from an Italian economist who was examining peas and discovered that most of the peas come from a minority of pops, usually split 80% of the benefit (peas) come from 20% of the participants (pods) (hence 80/20). Over time the same phenomenon can be seen in business: it’s staggering that 80% of revenue can come from just 20% of customers. We’ve just finished working with a company where the split was 92%/8%.
This doesn’t only apply to revenue; you could find that 80% of your new customers come from just 20% of your marketing: giving you a clear path to ramping up your successful marketing.
This is a big topic, with lots of examples and research conducted; Tim Ferris has done much work in this area & this a great example. You can use your marketing data along with to unlock your 80/20 marketing superpower.
5. Plan your cash flow far ahead. This might seem mundane, especially compared to some of the interesting principles we’ve touched on, but it’s incredibly important. Do you know how much it costs you to acquire a new customer (your ‘Cost Per Acquisition’/ CPA)? This number is one of the most critical numbers any business owner can have, as it means that, for every dollar spent on advertising, you know how many new customers you will get. Once you know this, you can plan to grow bigger with ease, and you will be able to truly understand what is needed to grow.
This article has only been the brief overview of marketing data and what it can do for your business. There is so much more to say but a quick point (I see a lot of people complaining about) is that spreadsheets don’t have to be boring - they can unlock the potential of generating more revenue by spending your time and money effectively. There’s nothing boring about growing your business, so get into using your data effectively.