As a New Year begins, marketers are putting the finishing touches on their marketing budgets and making adjustments to previously submitted plans to make sure they get the most out of their marketing spend in 2015. In an increasingly data-driven world, it’s more important than ever to be able to justify marketing expenditures and demonstrate value.
And that’s why data should be a consideration in formulating marketing budgets on the front-end, not just on justifying marketing spend after the fact. With that in mind, here are five ways you can use data to shape your 2015 marketing budget:
- Use 2014 data to develop campaigns targets. Marketers generally get a target from upper management – for example, to generate $10M in sales. To develop realistic campaign targets, analyze 2014 data to determine how many leads you generated, how many sales were closed and the average size of each deal. That will give you a ballpark figure for the number of leads you need to generate in 2015 to reach your target.
- Identify industry benchmarks to develop realistic close rates. When developing forecasts for 2015 marketing campaigns, it’s also helpful to leverage industry data so you can get a realistic view of what to expect from planned campaigns. For example, the software industry close rate averages around 1%. When you have a better idea of what to expect from campaign performance, you’ll be able to more accurately shape your marketing budget and generate the number of quality leads you need.
- Measure campaign influence instead of ROI. Marketers typically use a simple formula to determine ROI, calculating a ratio using marketing spend that credits the first or last customer touch for the sale. But in reality, it’s more complicated than that – total spending might cover five different campaigns that each contributed to the sale. A campaign influence strategy considers each touch-point to deliver a more accurate view of how sales were generated.
- Use weighted campaign influence factors to bring the big picture into focus. While using an equally weighted campaign influence strategy to demonstrate marketing value is more accurate than using a first or last-touch approach, we all know that not every customer touch-point is equally effective. Use data to more accurately weight campaign elements for a big-picture view that demonstrates the value of each touch-point and enables you to more effectively allocate 2015 marketing spend.
- Use campaign data to identify – and fix – process pitfalls. Sometimes campaign performance is about execution on the backend. Data can help you identify bottlenecks and breakdowns in the system. For example, you may find that the handoff from marketing to sales is problematic in one division or location but not in another. If you can address the trouble spot, you can ensure more even performance enterprise-wide – and better allocate your 2015 budget.
The sales funnel is complex, often reflecting activities across internal and external teams and multiple campaigns. Marketers who use a standard attribution method – like crediting only the first or last touch in Salesforce – are at risk of oversimplifying the complex interplay between customer touch-points.
By using a more accurate data and analytics strategy throughout the year, marketers can better demonstrate value and justify campaign spend. They can also get the information they need to build an annual marketing budget that meets sales targets in the year to come.
Bonnie Crater is the President & CEO of Full Circle CRM. Prior to joining Full Circle CRM, Bonnie was vice president of marketing for VoiceObjects and Realization. She also held vice president and senior vice president roles at Genesys, Netscape, Network Computer Inc., salesforce.com, and Stratify.