Ninety percent of the data that exists today has been created in the last two years. In the time it took you to read that last sentence, 11.6 terabytes of data were generated. That is equivalent to about 17,400 CD-ROMs (if you remember what those are!). We live in a connected world, with a proliferation of devices that connect online. For the modern marketer, this means access to large volumes of data. If you believe in the saying that data is the new black gold, then marketers have struck it rich! Right? Unfortunately, this is not always the case.
The challenge for the modern marketer is that big data creates big noise. To be able to make leaps and bounds in your business, you need to be able to cut through the noise, identify meaningful insights, and, most importantly, act upon them. Simple insights can help increase your user base, conversion rates, and revenue by multiples.
So how does the modern marketer cut through the noise and collect barrels of black gold from his or her data? I propose a simple 4-step process that gets you looking at what’s truly important:
- Identify your organisational objectives
- Identify the KPIs you should be tracking
- Implement your data collection systems
- Take action on your data
Identify your organisational objectives
The crux of any good digital measurement plan is to align it with what the rest of your organisation is striving for. If you measure in a silo, without measuring what matters to your CEO, your efforts will be put to waste.
Your organisational objectives will depend on your industry, the maturity of your business, and the leadership’s vision of where they want to get. Some example objectives include:
- Grow global market share by X percent
- Increase marketing ROI by X percent
- Reduce cost of goods sold by X percent
- Increase word of mouth referral rate by X percent
- Reduce call centre resources by X percent
If you are not sure what your organisational objectives are, speak to your senior management and refer to your company’s annual reports. They are often good enlighteners on what matters.
Determining your organisational objectives gives you a clear foundation for what you should be measuring and what actions you can take to shift your business forward. Anything measured outside of this is meaningless
Identify the KPIs that you should be tracking
Now that you know what your organisational objectives are, it’s time to start identifying the KPIs that align with them. By monitoring these KPIs, we ensure that we are keeping a finger on the pulse of the business and can rapidly detect any shortcomings.
One way to start thinking about KPIs is to look at the consumer decision-making process. McKinsey proposes a four-step process in today’s digital era. Consumers first create an initial consideration set of brands and products they would consider purchasing. Then they actively evaluate members of the set, adding and subtracting candidates. Next, comes the moment of purchase. The purchase, however, isn’t the end of the decision-making process because there is an ongoing post-purchase experience.
Most often, marketers are preoccupied with KPIs related to the moment of purchase as these are related to real dollars. These are macro-goals. If we focus on these, how do we know if we are doing well at creating awareness at the consideration stage? Or are we engaging effectively at the active evaluation stage? For this, we need to consider micro-goals that capture success or failure at the non-purchase stages.
Let’s consider some of the organisational objectives mentioned in the last section. Here are some KPIs that you would consider for each stage of the consumer decision-making journey that is aligned with organisational objectives:
Implement your data collection systems
Now that you know what needs to be tracked and its importance, it’s time to put your data collection systems in place. A robust data collection system will cover all channels (e.g. website, mobile app, brick and mortar stores, pop-up stores, booths) in which your business operates. It’s not so important which tools you use, but rather that they are properly set up to measure the KPIs that matter to you.
Take action on your data
Collecting data for the sake of collecting data is not worth anyone’s time. For data to become black gold, you need to take action on it. Inaction provides no value.
Often marketers keep an eye on their KPIs with the intention of taking action when the KPIs change drastically. In these instances, however, they are often unprepared and start scrambling for the right response.
The pertinent approach is to put plans in place for when key KPIs deviate outside of acceptable norms. Let’s look at an example. Assume we want to increase marketing ROI. Here are some contingency plans we can prepare for.
|KPI||Deviation||Actions to take|
|Cost per new visitor acquisition||+ 10%||
|Conversion rate per campaign||– 5%||
|Repeat purchase rate per campaign||– 10%||
Now if KPIs were to deviate significantly, the team would be prepared and know what to do next with certainty instead of scrambling. Investing time in these plans is important.
As the digital world evolves, and as the offline and online worlds converge, the volume of data at our fingertips is only going to get bigger. The key is to cut through the noise and focus on what really matters for your business. Only then will big data turn into black gold for your organisation.
Editorial note: We are trying little bit more hands-on practical approach on our blog than the more mainstreem, click baity, buzzwordy media. If you would like to see more articles like this on our blog, do let us know in comments please! Also our friends at Sparkline are hiring in Singapore. If you think you have what it takes to join this brilliant team, you can check out the openings here.