Marketing Analytics - What is It Really? and Is It Relevant to B2B Marketing?
The mention of analytics seems to be ubiquitous in recent marketing conversations. However, analytics conjures up different thoughts and seemingly means different things to different people. There are a variety of definitions but I like the one by Mail Chimp:
“A math-based discipline that seeks to find patterns in your marketing data to increase actionable knowledge that you can use in your marketing strategy to improve your marketing performance.”
The origin of marketing analytics lies in primary research to identify marketing sizing and product opportunities. This has been used for decades. But contemporary discussion is more akin to analytics as a continuous process rather than a static conclusion.
Analytics add the most value when based on large quantities of usable data, specifically, relevant data that comes in fresh and uninterrupted supply.
There are several applications, but some common categories include:
Measuring Communication Effectiveness
Google Analytics has greatly advanced the ability to measure and dissect web traffic. In turn, this has made A/B testing vogue again, as it once was in direct mail campaigns. By changing a single variable, and keeping all others constant (to the extent possible) the difference in results are attributed to the B variable. In simple terms, A/B testing could be applied by using two different headings in an outbound email campaign going to similar targets and measuring the difference in response rate. Alternatively, by changing the visual in an online ad (with the rest of the wording unchanged) and measuring the rate of click through or conversion to sale. Optimizely provides a free and super simple tool to measure the sample size and statistical validity of A/B test results.
https://www.optimizely.com/sample-size-calculator/?conversion=5&effect=25&significance=85
Identifying Behaviour Based Segmentation
Different buyers and users react to different product features, interact with products differently, use different channels to purchase the product and even interpret the same marketing messages differently. Smart Phones are still called “phones” but increasingly the phone itself is less important than the ability to store large amounts of data, provide rapid access to internet based Apps, and increasingly serve as a camera. Size, durability, appearance, storage, processing speed and camera resolution are features of varying importance to different buying segments. Bundling the features differently with data plans and promoting different features to different buying groups allow vendors to optimize their R&D and marketing efforts without making any significant variance in the models of phones that are mass produced. These insights are largely gleaned by the monthly data consumed by Apps and internet usage, travel patterns of the phone, storage consumed by photos in the cloud and the specific data transferred between cooperating Apps.
Deriving Price Elasticity
Price elasticity can now be measured with much greater precision than ever before by adjusting prices in short term ‘sales’ or other online promotions. While price affects overall brand perception and should be considered, price can be a powerful tool to drive short term unit sales in price sensitive markets. Whereas, products sold in inelastic markets have an opportunity for increased revenue without increasing the same number of units sold.
So, do Marketing Analytics apply to B2B marketing?
Definitely! But B2B marketing is not homogeneous and different types of B2B markets benefit from different forms of analytics. B2B product and services form a continuum of complexity in the decision making process. At one end of the range are relatively simple/low involvement purchases such as replacement parts that can be purchased online by contractors or project engineers, to nuclear generators being the other end with custom designs that take multiple years to sell, design, build and commission.
Transactional Markets – SEO
For B2B markets that are relatively transactional in nature and involve quick purchase decisions, many of the analytics practices of Consumer marketing are directly transferable. Dissecting web traffic and undertaking efforts [SEO] to rank first (or at least top 3) in placement for key word searches, and measuring the strength of message resonance with the audience are staples in effective marketing.
Complex Purchases – Lead Nurturing
Whereas, for complex products and services that involve multi-touch communication efforts, Analytics can provide pivotal information to build and maintain a structured lead nurturing program. While there are best practices, measuring and understanding what medium and underlying information drives your prospects forward in the buying process is key. A manufacturer of commercial/industrial HVAC equipment may sell relatively simple products through a wholesale channel, sell configured products to contractors (different size, output and physical orientation by order) and sell their high end custom products directly to the “end user” or enterprise. Each will prefer different pieces of information, trust different sources and use different media as part of complex and multi-month purchase decision. Data measuring receptivity of messages and minor tweaks, can have a dramatic impact on opportunity/close ratio.
Product Development and Refinement
Many physical products now come with Internet of Things “IoT” enabled functionality, and the trend is greatly accelerating. With the online services that typically accompany these physical IoT enabled products, manufacturers and service partners can measure time spent using the different features over the life of the product. Ultimately, the vendor can tell what will resonate most with the ‘end user’ before the individual even experiences the product/service. It is difficult for anyone to truly anticipate how much they will rely on something they have never used or contemplated. Active review of time spent by function can guide future product refinements, R&D investment and product price decisions with better insight than a traditional customer survey would provide.
Ask about how the Beresford Group can help you make the most of math based insights to optimize your B2B marketing effectiveness. We are always happy to discuss marketing strategy, tactics and the evolution of ideas.