The goal of marketing is to drive sales and ultimately to play a key role in accelerating business growth. However, achieving this and proving the role marketing has on the bottom line has been a perennial challenge for marketers. The 2023 CMO survey reveals that ‘demonstrating the impact of marketing actions on financial outcomes’ continues to be the top challenge for marketing leaders.
And, struggling to prove their real impact on delivering business growth, many marketers are now feeling the squeeze. According to a 2023 Gartner Survey, 71% of CMOs believe they lack sufficient budget to fully execute their strategy in 2023 and that they feel the pressure to do more with less.
But without investment in analytics, proving marketing’s worth is virtually impossible. Unfortunately, we continue to read stories in the trade press of a lack of investment in marketing analytics. And we hear reports of marketing teams that are restricted to the data available within their specific tools and platforms, which leads to siloed working, problems with knowledge sharing and limits the potential for successful end-to-end digital marketing.
What all of this points to is the need for proper investment in marketing analytics in order to facilitate a robust and reliable means of accurately and consistently proving marketing’s impact on sales. An expert end-to-end marketing agency can advise you on your analytics needs and assist you in making game-changing use of marketing data and in creating a data-driven decision-making culture.
Working with an expert agency to introduce data-driven marketing will usually involve two key phases, so let’s look at what’s involved in these.
PHASE 1: Establishing a data-driven marketing operation
Embarking on a journey towards a culture of robust, data-driven marketing necessitates integrating an experienced marketing analyst into the marketing team. Marketing analysts analyse market trends, consumer behavior and competitive landscapes. They employ statistical tools and data analysis techniques to provide businesses with data-driven insights. And their role involves assessing the effectiveness of marketing strategies and campaigns, enabling informed decision-making and identifying opportunities for optimisation. Under the guidance of the marketing analyst, you can follow an essential step-by-step process, that will enable you to foster better decision-making, optimize time allocation for marketing activities, and promote a more efficient operational environment.
1. Define goals and objectives
Craft a clear vision of your objectives, emphasising what success looks like. Leverage the expertise of the marketing analyst to help you establish key performance indicators (KPIs) and metrics. In cases where data for metrics is lacking, the analyst can coordinate the development of essential data sources. Initially, focus on actionable marketing performance metrics, gradually progressing to advanced metrics, such as return on marketing investment (ROMI) as data maturity increases.
2. Collect and Analyse Data
Marketing analysts play a pivotal role in gathering and analysing data from various sources within your organisation, including websites, marketing channels, platforms, CRM systems, and sales data. They can develop automated business intelligence (BI) reporting - using tools such as MS Power BI - to streamline reporting processes, centralise information, and provide a comprehensive view of operations. If required data is unavailable or needs centralising, your analytics partner can assist with this.
3. Develop Marketing Strategies with Gained Insight
Armed with refined insights from data analysis and automated reporting, the marketing team can now formulate precise, results-oriented marketing strategies. A marketing analyst can assist with identifying operational opportunities that were not previously obvious.
4. Monitor and Refine Strategies
Continuous optimisation is paramount. With marketing operations now under continuous, automated monitoring, the marketing team now has the time to focus on testing and refining marketing strategies. Key activities can include: regular collaborative sessions, utilising marketing dashboards encompassing campaigns, channels, and KPIs, facilitate discussions on test results, campaign performances, and innovative marketing possibilities.
PHASE 2: Proving marketing’s impact on sales and beyond
By following the four key steps in phase one, working with your marketing analyst, you will be able to transform your team into a data-driven marketing unit, creating engaging marketing, working to KPIs and demonstrable metrics such as return on marketing investment.
Phase 2 is all about going beyond basic descriptive reporting employing advanced techniques to demonstrate the impact of marketing efforts on sales and more. This analysis is critical for demonstrating the impact of marketing on sales, and for engaging with C-suite. In this phase, your more advanced analytics help the organisation to make informed business decisions. Crucially, you will be provided with all the necessary proof points to justify increases in marketing budget.
In phase 2, your marketing analyst will be able to provide the results from a variety of different types of advanced analytics. The following is a just a sample of the analytics that can now be performed:
- Correlate marketing effect on customer lifetime values.
- Performing additional sales analysis for target groups using statistical tests.
- Employing machine learning for lead/purchase probability/churn scoring.
- Resolving the effect of marketing on opportunity pipeline growth.
- Analysing the marketing budget needed for yearly sales targets.
- Addressing multichannel Return on Ad Spend (ROAS) and ROMI (Return on Marketing Investment).
Access to external and sales data is crucial for unlocking this type of analysis. While marketing and sales should ideally align, discussions with various stakeholders might be necessary. At Luxid, our experienced data professionals are adept at coordinating such efforts, ensuring seamless collaboration between departments. Modern marketing data professionals are integral champions, often working alongside CMOs and other marketing managers to foster a genuine data-driven culture.
By working through these two phases, you can create a data-driven marketing unit that is able to prove its positive impact to both sales and the bottom line. This is such an important thing to be able to do. A study by Forbes and Turn (2015) revealed that companies embracing data-driven marketing and analytics were six times more likely to gain a competitive advantage in boosting profitability and five times more likely to witness a surge in overall revenue. This underscores a significant edge in terms of revenue growth.
And a report from the DMA (Data & Marketing Association) and Winterberry Group, reveals that companies leveraging advanced data-driven marketing and analytics boasted a median return on investment (ROI) 15-20% higher than their counterparts who did not embrace data-driven approaches. All the studies show that optimized marketing, coupled with effective marketing analytics and a well-implemented data-driven culture, has repeatedly proven to be the primary catalyst for sales growth.
To talk to a data analytics expert at Luxid that can advise on you on all your marketing analytics needs contact us!