Over recent years, small business marketing has transformed from a discipline that struggled to get performance data to one with ample information but an inability to use it effectively.
Sometimes, we demand data and insights and sometimes rely on gut instinct. How do we balance a creative and an insight-led approach? And how do you work out the effectiveness of your marketing - with or without data?
The Key Marketing Metrics
Let's start by looking at four key marketing metrics that should shape your decision-making process:
Return on Investment is the holy grail of measurement for any activity, marketing or otherwise. Simply put, it measures the profitability of our marketing efforts by comparing the revenue generated to the cost of investment. It indicates whether your marketing initiatives are beneficial or not.
Customer Acquisition Cost calculates the average cost of acquiring a new customer. It helps assess the efficiency of marketing campaigns and allocate resources wisely.
Lifetime Customer Value is the overall value a customer provides, not just their initial transaction.
Conversion Rate measures the percentage of people taking a desired action; e.g. enquiring, buying, or signing up for a newsletter. High conversion rates indicate effective marketing tactics.
There are hundreds of other possible metrics you can use. But be very wary of vanity metrics - things such as brand awareness and social media engagement are often red-herrings for small businesses. They can easily become a distraction - time-consuming to measure and result in you focusing on activities that are not growing your business meaningfully.
Make sure you understand exactly how measures are calculated. We often see people with data and dashboards they don’t understand, They spend more time collating information, deciphering it rather than knowing what it is telling them and doing something about it.
Balancing Data and Intuition
Founder owners revert to instinct when the data is not simple or immediately helpful. In this situation, intuition can be more useful and powerful. Data-driven decision-making can offer objectivity and precision, help identify trends, measure performance, and gain insights.
Gut instinct is informed by experience and a deep understanding of the industry and audience. It allows you to make quick decisions which is far more impactful than being stuck in marketing paralysis
At its best, intuition should complement your data by providing context, creativity, and human insight. Here’s our quick guide on how to blend them effectively:
Set a Foundation: Start with data-driven insights to establish a foundation for decision-making.
Trust Your Instincts: Listen to your gut and leverage your expertise and intuition.
Iterate and Learn: Regularly evaluate and refine your plan based on data and intuition.
Be decisive: Making a decision is better than not. Be flexible and open-minded, but realise there is a time to take control and make the most of what you’ve got, Don’t feel guilty about deciding. Get comfortable with ambiguity as you’ll rarely have the complete picture
Understanding your marketing performance and planning for the future is not just about crunching numbers, it's about finding harmony between data-driven insights and gut instincts. Blend these approaches to make informed decisions that drive growth in your businesses.
If this issue resonates and you want some help, drop us a line and we'll take you through some solutions.
