Good data collection and analysis will help you strip the unknowns out of your business decision making.
How do you keep your business on track, even during times of elevated uncertainty and instability?
How can you be sure it is hitting its targets, delivering sustainable growth and pursuing the right opportunities?
Once upon a time, answering these questions might have been a question of business instinct.
Today, data tools enable business leaders to study performance much more accurately and in much greater detail.
Your data should be a crucial part of your growth strategy.
Collecting and analysing data makes it possible to make sophisticated assessments of your business in ways that would once have been impossible. Above all, you can understand very precisely what it costs you to acquire each customer – and what each customer is worth over time.
Get smarter with your use of data and you will have the ability to acquire larger numbers of customers at a more rapid pace while spending less money.
That’s an attractive proposition at any time. But when the market landscape is challenging – during the COVID-19 pandemic and its fall-out, for example – good data becomes even more crucial.
It tells you at any given moment how your business is standing up to the challenges it faces – and offers you a way forward.
How, then, to secure these data dividends? Well, step one is to understand how to track the impact of any given piece of marketing activity – which metrics you will monitor and how you will do that.
Think about which metrics might be most appropriate. The data won’t always be perfect, but it should be measurable and meaningful. On internet advertising, for example, you might look at the number of people clicking through from your results and how many of them make enquiries.
TV advertising, say, might be more difficult, but you should still be able to track spikes in activity following a campaign or a particular spot. It’s not just volume of response that matters but also, critically, quality.
What do people do when they respond to your marketing – above all, do they become customers?
Using tools such as Google Analytics – many of which are completely free – you should be able to build a detailed picture of the impact of each separate piece of your marketing activity.
It will tell you how many potential customers took note of your marketing, how many then investigated your products and services, and how many became customers.
You’ll also get an accurate read-out of how the size of the first group was whittled down at each stage of the journey towards buying.
Armed with this data, you can begin to approach each stage of customer acquisition much more scientifically.
Over time, you’ll see which marketing activities most effectively achieve your goals; you can constantly fine-tune and experiment to maximise impact – and you can avoid unnecessary spending.
Step two of getting smarter with data can be even more powerful. As you acquire customers and they buy your products, you can start to build a detailed picture of what your customers look like.
That will tell you, for example, who is likely to make higher-value purchases or buy from you more often.
What you’re doing here is assessing the lifetime value of your customers – how much they will spend with you over time.
You can segment this data in any way you see fit, building an ever more detailed picture of what your ideal customer looks like and how different groups of customers behave.
Combining this lifetime data with your efforts to track the impact of marketing activity can make a huge difference.
Now you know which customer groups you most want to reach when spending money on marketing.
You can track how effectively you’re targeting each of those segments each time you do something. And you can learn from that process to do better next time.
For businesses who get this right, the results can be dramatic.
Once you know what your customers are worth and how much it will cost to acquire them, every commitment to marketing becomes a calculated investment in growth rather than an exercise in hoping for the best.
Effectively, you’re stripping out the uncertainty inherent in your decision-making, even when the broader environment remains highly uncertain.
Even better, there’s a virtuous circle here. As your customer numbers increase – and your databank becomes more detailed – the effect is multiplied because you’re operating with richer information.
The data really will deliver.
