While technological advances offer a wealth of possibilities for companies when tracking and improving their business, new software can be limited by the mindset of those using it. Many people still think small even when they have technology capable of big returns. Understanding and using technology effectively is necessary to get the most out of your marketing and advertising budget.
Comprehensive Approach Needed
Companies tend to measure their advertising efforts in segments instead of as a whole. However, this isn't the way customers typically interact with a company. Measuring print, radio, TV ads and more separately doesn't provide the whole picture as a customers typically have many interactions with a business that lead to a sale.
For example: A person hears an ad on the radio about a restaurant named Butter and later does a google search about it. This person mentions something they learned about Butter from the search to a friend, and the friend then highly endorses the business. Finally, a coupon in the mail a week later might prompt the customer to dine at Butter.
It doesn't make sense to evaluate the effectiveness of direct mail campaigns by only looking at the results of mail campaigns over time. Instead, it's important to look at everything together. The earlier interactions in this example were needed to ensure the person didn't disregard the coupon as junk mail.
Looking for the Big Picture
When allocating marketing dollars, it's a good start to know how each method compares. One company that used to measure advertising separately took a holistic approach. When looking at TV ads, they saw this method generated little revenue for them compared to YouTube ads and search ads. Search ads generated 25% of sales despite being 4% of the advertising budget.
These numbers provide more insight but not the whole picture. It's important to know how many sales are derived from search ads when a company evaluates how to spend their marketing dollars. However, that doesn't mean the company should slash TV ads and devote their resources to search ads. It's tempting to attribute purchase behavior to one data point, and many companies do.
What companies must learn to understand is not just the last point that led to a sale but all the points that came before it. Before a customer clicked on a search ad, how many TV commercials for the company did they view? What other interactions did they have that ultimately led to them clicking on the ad and making a purchase?
It's possible to use analytics to measure advertising over sales and media channels with predictive tools. HBR estimates that data driven changes allow for marketing performance improvements between 10-30% without changing a budget.
The first step in this process is gathering data. The Bloom Intelligence Analytics Dashboard provides a wealth of information for those who truly want to understand the way their marketing strategy works together and drive sales. This provides information about popular visit times, daily traffic, average customer repeat rate and more. These values lend themselves to collection more easily, but the dashboard can also help with more elusive concepts like loyalty.
Let's go back to Butter. One point in this example that prompted a sale was a recommendation from a friend. How does a business track something like this? Loyal, satisfied customers are more likely to refer their friends, and the Analytics Dashboard can gauge loyalty through metrics like the Lifetime Value of Customers. This gives a business an idea of how their customers feel about their services and products so that a company can assess whether they have the relationship they need with their clients.