Tracking, recording, evaluating and using analytics is important. It allows you to determine so many key metrics that, without analytics to guide your decisions, it’s like fighting an uphill battle to grow and scale their business. So, essentially if you want to reach the success at the top of the hill, you need to start tracking your analytics.
And while this is the main reason for using them, it’s not the only one. If you’re not convinced why you should track your analytics, here are a few good reasons to start right away.
Generates Relevant Data
The main purpose of analytics is to gather relevant and actionable data. Evaluating channels of communication and campaign performance provides insight into the demographic makeup of your target audience, customer behavioral patterns and the way people interact with the brand across the board. This comes in handy when you are creating a marketing strategy centered around the consumer, like in the case of inbound marketing.
Still, data generated from analytics tools can only tell you so much. It’s important to use other types of analytics to gather information directly from the source. This means interacting with consumers, conducting surveys and interviews to gain relevant knowledge about their decision-making process.
Analyzing this type of data together with information from your website or social media pages allows you to create a complete picture of your target audience. In turn, you can make better decisions, relevant to the pain points and needs of your consumer.
Evaluates Performance Effectiveness
A key performance indicator (KPI) is a measure of marketing effectiveness when it comes to determining the results and the positive or negative value of ROI. Metrics which analytics tools monitor are essential for measuring the success rate of performance based on accurate data. Without them, it would be impossible to establish both marketing goals and KPIs that evaluate results.
However, not all metrics are relevant. The most important KPIs are actionable metrics like conversion, traffic, and engagement, give much better insight into how performance can affect the bottom line. That’s why you should always stay away from measuring vanity metrics, which don’t affect performance or add any real value to your efforts.
It Helps with Reporting
Analytics tools make it easy to report performance, as a way of proving ROI. It’s as easy as opening the analytics dashboard and printing out the key metrics to demonstrate the success of a campaign. Also, this type of reporting works both for bottom-up in-house reporting and for B2C or B2B reports to show results and provide tangible proof.
You can use tools developed by media monitoring company from New Zealand that can help you track news about your business in real time. Usually, it would take PR and Marketing experts days to prepare news clipping mentions as proof of a successful campaign to sponsors or C-level management, but this does in instantaneously.
Analytics tools work non-stop, 24/7. Tracking relevant data like this means you can access it at any moment to view key metrics and determine the performance quality of your campaign. In situations when a channel is underperforming, you can make quick adjustments and change key elements to improve them.
This is very useful when using A/B testing for optimization. Data from the analytics report gives insight necessary to evaluate current and performance after changes are made, determining the better option between test A and test B.
Acquiring a new customer through your marketing channels costs money. This is known as the customer acquisition cost (CAC) and determines how much a business needs to spend to earn back its investment from a sale to a customer.
The number is fairly easy to calculate and provides key insight into cost and productivity, which is especially useful when creating a marketing budget.
To calculate it, you need to add up the combined spending on marketing for one month and divide it with the combined number of customers acquired for the same period. So, if you spend $2500 on marketing, and gain 25 sales from it, your CAC is $100.
A loyal customer is far more valuable than a new customer. Returning buyers are important because they usually spend more over time, react better to marketing efforts, and even raise brand awareness. Not to mention, the cost of retaining a customer is far less expensive than the cost of acquiring new ones.
Customer retention rate is calculated by subtracting the number of customers at the end of a reviewed period with the number of new customers and dividing the number of customers at the start of the same period.
Customer retention rate is an extremely analytics metric that allows you to dedicate enough resources to customer nurturing. And you also have the opportunity to create a loyalty program with multiple customer incentives, which can benefit anything from brand identity to the bottom line.
It’s time to take action. At the end of the day, analytics tools are there to help you. They can provide the measurable, relevant and actionable information you can use to improve not just your lines of communication, but also the entire business process.
So, should you track your analytics? It’s up to you. But remember, you are walking in the dark without it, and there is no reason not to turn on the light.