Data Driven : Playing by the Rules
Establish key analytic processes in order to boost your return on marketing investmentsMay 2012 By Geoff Wolf
"Big Data" is a buzzword these days. More importantly, under the hood there have been new data emerging from so many sources, we are all scrambling to keep up. As new media channels have been born during the past decade, so have new databases that serve as repositories for all the new data. In some cases, each media channel has its own database. In other cases, the data is combined where it is easy to do so. In all cases, we need to figure out how to make sense of this escalating confusion of data.
The key problem is that each of these media channels wants to report on their sales with their own rules. In that scenario, it all adds up to more sales than what went into the bank account to begin with.
In a perfect world, all the data are combined in a single repository where all the metrics are normalized into a single "language," so to speak, and represented relative to a return on your marketing investment. The perfect solution may require more investment than you have available. In those cases, which represent the norm for most businesses, other solutions are used within a less complex database environment and even with spreadsheet tools. While not perfect, these solutions range from adequate to directional, and can be quite satisfactory for driving your marketing investment.
Regardless of the analytic processes you use, let's look at some important foundations that must be established to maximize marketing investments.
What really matters is your definition of an acceptable ROI. Before turning your resources loose to work a bunch of data, think about what key performance indicators (KPIs) you need to focus on.
Define what matters most to your business so that your key performance metrics that result from all the analysis are focused. Your objectives must be defined to deliver the most value. The most common objectives are:
- Brand Awareness
- Top-Line Sales
- Customer Acquisition
- Customer Retention
The reality is that focusing on a single priority yields more value for your business. If we aim for a blend of several objectives, the results will mirror that directive and success will be a blend of values across all the goals without any one of them achieving significant results.