It’s no secret that every company that operates online relies on data to make more informed and strategic decisions regarding future business development. Information is the key that helps businesses avoid crucial mistakes in the online market.
That’s why so many companies collect all sorts of information, to begin with. Companies that don’t rely on information might fail utterly. For example, 42% of startups fail because there was no market need for their products or services.
This mistake could have easily been avoided by conducting some of the most basic market research beforehand. The same goes for marketing endeavors.
Many companies create marketing strategies and campaigns based on information obtained from research. However, marketing strategies may or may not perform well based on various circumstances.
Companies track the progress of their marketing campaigns so that they can make the necessary improvements when needed and improve the efficiency of their marketing efforts.
But if marketing data helps guide your future marketing efforts, can it also help guide your business growth? Let’s find out, shall we?
1. To grow or not to grow?
Marketing data can tell you many things, especially when it comes to your business performance in the market. This information is vital when deciding whether or not your business is ready for growth.
Every business reaches a point where it has to grow, but that’s not as simple as many business owners tend to believe. Deciding to grow when the moment is not right can ruin your business completely.
Your timing has to be on point and marketing data can help you determine exactly when the ideal moment to grow your business is.
For example, just look at the performance of your marketing campaigns. If your marketing is generating more than just viable results, then you might consider expanding your business further.
But which data to check? Not every marketing data is relevant to business growth. For instance, having high engagement levels on social media, such as increased shares, likes and comments, doesn’t necessarily mean you’re about to have many more customers.
On the other hand, increased organic traffic from SEO or increased conversions from PPC indicates that your marketing is performing well and that your company is generating more business than before. If data is indicating that there’s more work than you can currently handle, then it may be a good idea to consider growth opportunities.
2. Growth opportunities
Deciding when to grow is important, but it’s equally important to decide how to grow your business. This is another thing marketing data can help you with.
As a matter of fact, marketing data plays an instrumental role in helping you decide which growth opportunities to consider and which to avoid altogether. That said, here are a few examples of growth opportunities available for your business.
- Market penetration – Increasing market share with your existing products or services.
- Market development – This opportunity involves selling your existing products or services in new markets.
- Product/service innovation – This involves creating a new product or service for your existing market.
- Diversification – Creating new products or services for new markets. A good example is a niche market.
- Expanding globally – Taking your business to the international market.
Every growth opportunity holds a certain amount of risk. However, with the right strategy and proper information management for business, you can minimize and mitigate those risks.
Your marketing data can tell you what the best course of action is. After all, growing a business requires a hefty investment, so you have to be absolutely sure that the path you’re about to take is the right one for your business.
3. Leverage the right metrics
Metrics and KPIs (Key Performance Indicators) paint the bigger picture when it comes to effectively collecting marketing data. Metrics can give you a ton of information. However, the key is in managing to interpret that information and make sense of it.
Moreover, you must keep an eye on metrics that show information relevant to business growth. If you take information from all the metrics and KPIs, you might get confused, and you’ll most certainly get mixed signals.
For example, numerous marketers get caught up in vanity metrics that they lose focus of what’s really important. The same can happen to you if you’re not careful enough. Vanity metrics represent raw numbers, such as social media followers, subscribers, page views and so on.
They appear very important but offer little or no context as to what to do with your future marketing decisions or business growth opportunities. So if your marketing report shows a huge spike in page views, your focus immediately shifts towards those numbers.
You honestly believe there’s something there, but it’s usually just numbers and nothing more. Therefore, instead of focusing on what appears to be low-hanging fruit, you should focus on actual actionable metrics that provide relevant data and useful information that can drive your business forward.
4. Vanity vs. Actionable metrics
When you see vanity metrics, you’re often puzzled by questions, such as: “What does this mean?” and “Should I invest further in this channel or stop everything on it?”.
You then proceed to obsess over those metrics instead of focusing on viable and actionable data. To help clear the air of any confusion, here are a few examples of vanity metrics you should avoid as opposed to actionable metrics you should focus on.
- Vanity: Facebook fans – Actionable: Engagement rates.
- Vanity: Twitter followers – Actionable: Competitor followers.
- Vanity: Email open rate – Actionable: Click-through rate.
- Vanity: Number of subscribers – Actionable: Active users.
5. Test different approaches
Marketing data is very helpful, but that doesn’t mean you must follow it blindly. As accurate as data can be, you might interpret it wrong and then make a crucial mistake. That’s why it’s vital that you test out different approaches before deciding to make any significant changes.
Whatever marketing data tells you, try to test it out beforehand.
For instance, you can make small changes to your existing strategies to determine what the outcome will be. As you may already know, reading data properly is more important than making the necessary adjustments as soon as possible.
Testing out different theories will help you determine what’s working and what’s not. That way, you can actually allow marketing data to help you learn. Furthermore, you must look at the performance of all marketing strategies across all channels at the same time.
Every channel plays a specific role in the buyer’s journey, and the performance of one channel can impact the performance of another. Therefore, when using marketing data to grow your business, you must assess whether data will help you grow a single aspect of your business or help you grow your business as a whole.
Marketing data, as well as any other data collected from market research, is of vital importance for business growth. The information you obtain can help you make more strategic decisions.
However, as beneficial as data can be, it can also be a double-edged sword if not used properly. That’s why it’s important to test any new strategies you plan on implementing before you actually implement them.