“If you don’t track any metrics, you’re flying blind. But if you collect and focus on too many, they may end up obstructing your field of view.”
– Scott M. Graffius
Why do you need digital analytics? Let’s say you’re investing $10,000 each month in Google Ads – which redirects your audience to your website’s homepage or one of the service pages.
Despite exhausting your advertising budget and attracting thousands of prospects/customers towards your website via paid advertising, what if your conversion rate stands at a mere 2%?
Now, if your product’s gross margin is extremely high, then chances are that you’re profitable – considering that you’re able to generate more than $10,000 profit each month.
But if you are selling a low-ticket item and are subject to a disappointing 2% conversion rate, then you need to seriously optimize your marketing funnel.
Maybe, it’s something wrong with your ads. Or maybe, it’s your website.
Without tracking the right metrics and relevant data, you’ll never be able to figure out what’s working and what’s not.
If you’re investing $10,000 each month on paid ad campaigns and aren’t tracking the right metrics (and if you have a low conversion rate), then you’ll have drained over $120,000 in one year.
On the other hand, let’s say that you started tracking the right metrics and found out that 90% of your website visitors are bouncing off right from the homepage.
In that case, you can head over to the homepage and conduct a thorough audit – which will help you find the root cause.
Maybe, your website homepage is too cluttered. Or what if your homepage takes more than 7 seconds to load?
The possibilities are endless.
And you’ll only be able to find the root of the problem when you focus on tapping into the full potential of digital analytics.
Whether you’re running a Google Ads campaign or want to understand your customers’ behavior on your website or want to track the progress of your email marketing campaign, it’s important to make data-driven decisions – which will, in turn, help you optimize your campaigns for the best possible results.
But it’s not as easy as it sounds.
Tapping into the full potential of digital analytics is critical. But what’s more important is tracking the right metrics and extracting data insights.
When you log in to your Google Ads account, you’ll find yourself swarmed with countless known and unknown metrics.
And when business owners, C-level executives, and marketers find their screen flooded with a world full of metrics, they choose not to track the progress of their campaigns at all.
But what if I told you that you don’t necessarily need to track all of these metrics? That’s right. Instead, depending on your goals, KPIs and objectives, you need to track the right metrics that’ll help you gain insights into your progress.
Alongside this, you’ll be able to figure out what’s working and what’s not. And when you know what’s working and what’s not, you’ll be better equipped to make data-driven decisions and further optimize your campaigns.
To help you understand how you can strategically use digital analytics to achieve better results, we’ve put together the five exact steps you need to follow throughout your marketing journey. We love to call it the “Measure to Optimize” flywheel.
Without further ado, let’s dive straight into it.
How to Strategically Use Digital Analytics to Make Data-Driven Decisions & Level Up Your Marketing & Advertising Efforts?
Strategically using digital analytics to level up your marketing and advertising campaigns is not a straightforward process. If you genuinely want to achieve outstanding results, we’d advise you to follow the five steps we’ve listed below:
- Set Measurable Goals
- Extract Insights
Let’s touch down on each of these steps one by one.
Set Measurable Goals
Businesses and marketers that set quarterly goals and objectives are 376% more successful than the ones that don’t.
Running a business without setting goals and objectives is like driving a car with your blindfolds on.
It’s dangerous. Of the long list of benefits of goal setting, a few include:
- Provides direction and focus.
- Provides a better understanding of expectations.
- Gives clarity.
- Helps make powerful decisions.
- Helps clear a measurable roadmap to success.
- And more!
While some may be short-term goals and others may be long-term, the trick here is to break down these goals into objectives, which should further be broken down into measurable KPIs.
Key Performance Indicators, commonly referred to as KPIs, are critical indicators set by businesses to demonstrate how effective they are towards achieving their key business objectives.
For example, if your goal is to increase the efficiency of your marketing department, then you can break down these goals into:
- Boost conversion rate
- Optimize cost per lead
Now a good example of turning these goals into measurable KPIs is:
- Boost conversion rate by 2% in this quarter.
- Bring the cost per lead down by 5% in this quarter.
- Increase organic website traffic by 10% this year.
While writing KPIs, we’d advise you to cover both:
- Lagging KPIs – Lagging KPIs look back at whether the intended outcomes were achieved. These include – gross margin, growth in annual sale, annual net income and more.
- Leading KPIs – Leading KPIs look forward at future event and outcomes. These include number of new website trials, number of unique website views and more.
Now, depending on your goals and objectives and the marketing as well as advertising campaigns you’re running, you need to write down your KPIs. Make sure that everyone within your organization is clearly able to understand the KPIs – which will help them steer in the right direction.
BUT! Writing down your KPIs is only the first step.
Even though you know the key performance indicators you’d like to track, you need to have a plan to measure them. When you log in to your Google Analytics or Facebook Analytics Dashboard, you’ll obviously find yourself swarmed with a world full of metrics – right in front of you.
To avoid confusion, prepare a strategic plan where you have the right metrics next to the KPIs you would like to track. Doing this will help you streamline the reporting process and make it easier for literally anyone within the organization to gain insights into the performance of your marketing and advertising campaigns.
As I mentioned before, stop yourself from being confused with all the metrics these dashboards put in front of you. Instead, just stick to the ones that’ll help you track your KPIs.
Rather than going down the long road, I’d advise you to take the smart route that’ll help you save your valuable time and efforts.
Upon logging in to the dashboard, keep your KPI tracking plan handy. This will help you or your colleagues/staff members fetch the right metrics and build an easy-and-simple report, which literally anyone can track.
Reporting isn’t enough. Did you know that over 68% of teams face a hard time extracting data insights required to make strategic decisions? It’s one of the big problems businesses face these days.
Raw data is completely useless unless you transform it into insights. From helping you optimize your operations to improving customer experience, extracting insights will help you make better decisions and harness the complete potential of digital analytics.
Now, let’s say one of your KPIs was to boost your conversion rate by 5% in this quarter. But if you weren’t able to do so, you also need to find the reason behind the failure. That’s the reason it’s advisable to set both Lagging & Leading KPIs.
Doing so will not only help you dive deeper into the past but alos look at the upcoming trends and patterns. Setting KPIs leads to increased productivity and helps everyone steer in the right direction. But if you aren’t able to hit your KPIs, you need to dive deeper into the data, extract insights and find out the root cause.
In this example, if you weren’t able to boost your website’s conversion rate, maybe the problem is with your company’s website. Now, if the problem is with the company’s website, you need to dive deeper into the data and extract relevant insights. From tracking your website traffic to your buyers’ journeys to lead generation, now you need to track the right metrics to find out the root of the problem.
And once you do this, you’ll be able to make informed decisions and help you understand which areas you need to focus on.
Upon extracting insights, you’ll be clear on which areas you need to focus on. For example, if you weren’t able to hit your “boost your website’s conversion rate by 5% in this quarter” KPI and, upon extracting insights, found out that your website visitors are bouncing off of your website after heading over to your “Our Services” page, then you need to focus on optimizing it.
On the other hand, if you were running Facebook ads and weren’t able to get a decent amount of traffic to your website, then maybe the problem is with your ad creatives. Or what if you aren’t clear on who your target audience is.
In that case, you need to track the extract insights and understand the root of the problem. And once you’ve identified the problem, it’s time to optimize your campaign(s).
Apply, test, and measure different strategies and try to find out which one helps you get closer to your KPIs. This will help you understand what’s working for you and what’s not.
And it’s not just a five-step process. In my opinion, it’s a flywheel. Once you have identified the problem and optimized your campaigns, you need to get back to setting your goals, objectives, and measurable KPIs for the next quarter.
It’s a never-ending cycle, and if you really want to achieve the best possible results, digital analytics is your strongest weapon.
I’m the founder of Grow Predictably, a company that helps businesses make an impact. We work with you to create a marketing strategy tailored for your needs and goals. We help businesses grow and make an impact by providing services that drive predictable, profitable growth.
Making an impact is what drives me. I founded my company on the belief that successful businesses should make an impact. And we’ve been helping businesses do just that for years now. It’s why we exist – to help businesses reach more people and change more lives for the better.