Clients either look at me with horror or stare glassy-eyed into the distance when I ask them about the numbers that drive their marketing decisions.  And I recall at university that the ‘analytical methods for marketing’ was one of the least popular modules!  People think of marketing as fluffy, creative stuff, but the reality is that numbers and analysis should underpin all your activities.  While I accept not everyone will take to this subject with equal enthusiasm, I do venture to suggest that you work out which numbers are the critical measures for your business.

Here’s a quick run through of some of the main contenders – not exhaustive by any means, but something to get you started!

1 - Targets

Marketing activity should support the overall business goals you set, for example revenue and profit in 1 year, 3 years, etc.  From a top level financial goal you can make some assumptions about the numbers of customers this represents, how much business will come from new and how much from existing customers, how many leads you need to generate and, ultimately, how much budget you can afford to invest in your marketing to achieve these targets.

2 – Profitability

The marginal profit you make per customer or per transaction is a critical piece of information needed when setting your prices.  Is it better to sell less at a higher price, or do you make more money at a set volume?  What cost per customer or sale can you afford to sustain in your business?  How can you develop your product or service to add value and drive up your margins?

3 – The Market

Define your market and you can work out how big it is – in revenue and customer numbers.  Important if you don’t want to find your targets mean you are after a very large slice of a very small pie!  Knowing the size of the market means you can estimate your own market share (current and targeted) and, if you have enough knowledge of your competitors, how well you are doing compared to other players in the same field.  It also determines the strategy that will work best for you in your sales and promotions.

4 – Sales Process

What is the average lead time for conversion of your prospects into sales?  This can be crucial in planning for high value contracts where decisions can take a very long time.  Conversion rates can tell you how effective your sales dialogue is and identify areas for improvement, as well as how good the quality of the leads are that you are generating.  Not forgetting, of course, data on cancellations if your business relies on ongoing revenue from an installed/supported customer base – these may be telling you that you need to make improvements to your product/service.

5 – Promotions

I can’t hope to describe every number that you could be capturing and analysing related to your marketing campaign activity, but the rule is ‘whatever you are doing take some measurements’.  You’ll know, of course, that one of the things people love about online or electronic communications is the way you get so much data and information about how they are working – so use it!  Make sure you have analytics on your website so you know what visitors do when they get there, ensure you can track your newsletters and emails ‘click through’ rates, and remember to record how your customers eventually come to you. 

For every method you use to promote your company there is a means to measure it, unfortunately some routes are only available if you have the money to invest in research, so you will have to add some intuition to the measures you can make.  No harm in that, the best campaigns work through ‘layering’, i.e. using more than one route to enter a customer’s consciousness, which means it is harder to isolate the impact of any individual element.

Measures of promotions success will allow you to work out your ROI (return on investment) and help you see if you are spending wisely when it comes to marketing in order to hit the targets discussed in point 1, above.

They say knowledge is power, and data can give you knowledge, ergo … so take time out each month to ‘know your numbers’ and make better decisions!