Using Data in Your Marketing
If you want to increase conversion and reduce marketing costs then you should be using data in your marketing.
- Get close to your customer ( and gather data)
- Use data to inform your decisions ( data based decision making)
- Use data for product / service development
- Technology for your data is only worth buying if it makes things better. Otherwise its just a shiny new toy
- The essence of strategy is choosing what not do – does your data help you in your decision making
- Remember data doesn’t make decisions You do
- Crucial to identify what is the right data for you to gather
- Important – Doing is Easy, Thinking is Hard ( Good Data can make thinking easier)
Looking For Growth – Pareto Your Customers
The Pareto Principle
The Pareto Principle is the theory that 80% of effects come from 20% of causes. When it is applied to business theory, people say that 80% of your profit will come from 20% of your customers.
Consider Profit but a Pain
So if you are looking at how to grow your business profitably, conducting research on the customers who make you the most profit seems like a sensible starting point.
Now there are some important caveats to throw in here for example are client might be highly profitable but be a complete pain in the butt to deal with ( paying late, asking for lots of changes / modifications, leaving orders late and expecting immediate delivery).
Therefore these elements need to be taken into consideration.
Action to Complete the Pareto Analysis
- Write down a list of your “Top Ten” clients by profitability
- Now for some this will be easy, they will have the accountancy systems in place to run a report and get this list in seconds
- For others identifying the top 10 by profitability will be a more onerous task involving discussions with your accountant
- For many “true profitability” will be incredibly difficult to identify
- Many of the manufacturing companies I work with initially have no idea about the “real” profit they make when designing / manufacturing a new product. With design costs, research, additional production time just being lost within the system. This often means that a project that you thought would be highly profitable, simply ends up covering costs or losing money
- Top Tip: Make sure you have accurate information available – its pointless working to get more customers who have the profile of a loss making customer
- What characteristics do these Top 10 customers have in common
- The amount they spend
- Number of orders placed
- Type of person you deal with
- Type of products / services they are buying
- Talk to them
- Don’t Email them
- Don’t send them a survey (printed or online)
- Talk to them, ideally face to face, with specific time allocated to an open and frank discussion
- Find out about how they heard about your business / product / service
- Now I know sometimes this can be difficult (especially) when they have been a customer for a long time, but its useful information to gain
- For more recent customers, did they find you on the web, was it via a referral etc.
- Identify how they use your product or service ( especially important if your product is sold through central procurement, so you sell the product but have no idea about the end application)
- Ultimately we want to be able to be able to develop a profile for these customers
Now answer these questions:
- What do they have in common?
- Where did you meet them?
- How did they find you?
- Where can you find more customers like them?
- Do you put in significant effort to acquire more customers like them?
- Do you have similar clients in the pipeline
- In fact do you have a sales pipeline
- If you do have a pipeline, how do you manage it, do you have the CRM systems and processes in place
- What actions can you take over the next 30 days to acquire a new customer like them
- Note: recognising that some prospects can take months / years to nurture and develop before they can purchase, unless you start the process you will never complete the sale
In Summary : Looking For Growth – Pareto Your Customers
- Identify your top 10 most profitable customers
- Analyse them
- Talk to them to accurately understand why they choose you
- Research how to find more customers that fit this profile
- Take Action – to start finding the “right” kind of customers
- Don’t get distracted – other orders may be eating into your time and losing you money
Lets consider how to practically do this research / analysis
More Information Changes Perception
The need to “think outside of the box” is obvious. In today’s rapidly changing business world this has never been more true. Over the Covid period there have been some interesting examples where businesses have had to reinvent themselves in order to continue trading.
The journey to innovation has been speeded up significantly for those businesses who suddenly found themselves with time to think and no distractions.
Innovation is difficult ( when you have your normal day job to complete) and complex decisions need thinking through, so therefore often get left and avoided.
Gut feel and Gut feeling are just the starting point and what we need to do is train the brain and start the quest for data
Unlocking Options and the issue of data
- If we collected all the data from the beginning of time to the year 2000
- It would be less than we now create in one minute
- With data we can make better decisions
- We need to bring data into decision making
The Quest Approach
- Question – get the data / information that is preventing decisions
- Understanding – do we now fully understand all the issues
- Everything else – what else do we need to consider, lets look at the wider picture
- Success – what will success look like,
- what’s the best that could happen
- what’s the worst that could happen
- Try – what are you going to try. As a leading sports brand states “Just do it”
More Information Changes Perception – Testing your idea
- What is your minimum viable product / activity to adequately test the idea
- an air bed on a lounge floor was the starting point for AirBnB
- Explore the potential for Win / Win partnerships
- Learn from other mistakes
- Even if things are going well innovate ( no need to wait for a global pandemic )
- If things going well – innovate
- Using data in your marketing will help you challenge assumptions
We need to understand that as individuals we have a bias but with stimulus ( and necessity) we can think differently
FREE Website Performance Check
- Speed plays an important part in website performance how well does yours perform on desktop and mobile?
- Is your site mobile responsive if not how many customers are you losing?
- Is your site HTTPS?
- With GDPR in place is your site legally compliant?
- Find out about loads more website performance issues
Marketing Example – Using Data Analysis to measure performance
Marketing of running shoes – Gait Analysis And Its Impact On Performance
Gait analysis gives you crucial information about your running style
Gait analysis helps you to understand your level of pronation. Pronation is the natural inward roll of the foot as the outside part of the heel strikes the ground. This natural rolling motion acts as a shock absorbing element for the leg and body helping to optimally distribute the force of the impact of the heel making contact with the ground.
Analysis of gait also looks at your leg and body movements to identify any areas that might be impacting performance and efficiency. The goal of the analysis is to find the correct running shoe that makes the process of running more comfortable. By conducting detailed analysis and wearing the correct running shoes you can also reduce the chance of recurring injuries caused by wearing the wrong type of shoes.
Performing analysis provides runners of all abilities from the enthusiast to the professional with essential information about their running style. As a runner this information is important (irrespective of how long they have been running) as only through knowing an individuals running style will they be able to select the correct running shoes.
Analysis to measure the degree of pronation.
Pronation analysis matches a runner’s degree of pronation with the correct shoe type. The aim being counter-balancing over or under pronation, helping reduce the risk of injury and improving running efficiency. With analysis there are two levels of pronation
- Overpronation is when the feet roll inwards too much
- Under pronation (or supination) is where the feet don’t roll inward enough.
The gait cycle describes how as humans we walk and run. So fundamentally how we move. Having an intimate knowledge of the gait cycle makes it possible for an expert to be able to accurately help you in the selection of the correct running shoes
The Benefit of Using Data in Your Marketing
Use the formulas and model provided above and start calculating CLV for your business today. Customer lifetime value is an incredibly useful metric. It tells you which customers spend the most at your business and which ones will remain loyal to you for the longest amount of time.
If you would like to know more about using data in your marketing contact Andrew Goode MBA, MSc, FCIM Click here to arrange a call
Other articles linked with marketing metrics that may provide additional insight. Marketing metrics and analytics, marketing ROI Planning , marketing revenue analytics and Marketing Measurement Metrics and Website Design