Let’s Talk BI: What Does Optimization Actually Mean?

June 27, 2019

Optimization is a buzzword you hear everywhere these days, but it also really is something important to businesses trying to grow their success and market share.

Optimization isn’t simply another example of modern corporate-speak, or some new marketing lingo that means nothing. It’s a vitally important process that remains the most efficient and effective way to raise your marketing and sales ROI and enjoy improved results from each strategy your team implements and pursues.

What Do We Mean By “Optimization”?

It may be more helpful to start with what optimization is not.

For example, it’s not change for change’s sake. It’s not really experimentation, although it does share some common elements with the basic scientific method we all learned in middle school. And it’s not merely split testing, evaluating one control against one or more variants.

Instead, it’s the careful, strategic refinement of your marketing strategies and tactics based on existing data-based analysis of the performance of those strategies and tactics.

One of the key components of the optimization process is a steady stream of hard data that provides the factual contours of your current efforts. Exactly how effective is your marketing and sales program, and in what specific ways?

Why Is Optimization Important?

Primarily for one reason: Because most business and marketing processes are based on pre-digital thinking, albeit possibly applied to a digital context.

The way you conduct your business has rapidly evolved from how business was conducted in brick-and-mortar stores and online thirty, twenty, ten, and even five years ago.  

Many marketing and sales processes are continually reworked for most businesses as the digital marketplace continues to evolve, and merely adding automation onto existing foundational workflows isn’t the same as optimizing those workflows from the start, using as many of the modern tools at your disposal as you can.

Optimization speaks to the very strategies your marketing and sales teams adopt in order to win your company better business at a faster rate with greater lasting lifetime value.

Some businesses spend thousands or even millions on marketing in a month. But no matter what your budget is, you need to maximize the value you receive from every single dollar you spend. That’s what optimizing is all about: increasing your ROI and making every aspect of your marketing program run as efficiently as possible.

That’s not to say that optimization doesn’t present its own set of unique challenges. It can be frustrating and confusing, especially when you start dealing with buckets of “big data” and metrics. From there, it can become even more complex, more difficult to parse and more difficult to optimize. As a result, optimization can become tedious.

And that’s precisely why it’s so important to get it right. Otherwise, you’re leaving money on the table—not to mention throwing good money after bad—with diminishing returns to show for your efforts.

The Basic Steps in Marketing Optimization

The process of marketing optimization basically boils down to three sequential steps:

1. Collect and Analyze Marketing Data: It’s essential to have a steady flow of accurate, reliable data relating to each marketing channel. These data points measure and track the performance of your marketing efforts, over a specified period of time. Examples are numerous and varied, but some key marketing data points (or KPIs) are:

  • Leads by channel
  • Bounce rate
  • Conversion rates (e.g., how many people who see your email list sign-up form complete and submit that form)
  • Cost per funnel stage
  • Lifetime value of a new customer

It is critical at this step that you can see your data in real-time, compiled from all of your different data sources. BI solutions, like Grow, make this easy by giving you the ability to build, share and see easy-to-understand marketing and sales dashboards comprised of your data.

2. Refine the Marketing Process: Based on the data that you’ve collected, aggregated and analyzed, you can then start to refine your marketing workflows, strategies and tasks by studying your BI dashboards. As you work with data that has been compiled, normalized, and prepped you can see insights into your marketing and sales funnel more easily. This is how you truly begin to use data to guide your optimization process.

3. Identify Automation Opportunities: Optimization must take place at each stage of the customer lifecycle, from attracting new site visitors to converting those visitors into leads all the way through to a closed sale. At each stage, you can optimize your marketing program by making even small tweaks and refinements.

As you revise your processes, you can also identify changes you can make to your marketing workflow that can take advantage of automation opportunities, reducing your personnel and fiscal costs.

Optimizing Your Prospects’ Paths to Conversion

It is important to understand the paths to conversion that your users and prospects take, because each step in that path is a potential area you can optimize.

So, if your path looks like the following …

Facebook post promoting a blog post → The blog post →

Blog landing page with form → Subscribe to email list/newsletter

… then you should be proactively optimizing each of these assets in light of their specific functions:

  • The Facebook post: How you promote your content
  • The blog post: The content itself and how you target it to your prospect’s need for information
  • The blog landing page and sign-up form: How you convince your prospects to give you their email addresses
  • The email list/newsletter: How you convince them to stay subscribed (and click on your email links to bring them back to your website, where they hopefully make a purchase - yet another conversion path)

The more you can use technology to refine each step in this process and, where appropriate, automate some part or all of it, the more effective your marketing efforts can become.

The Importance of KPIs and Hard Data in the Optimization Process

Simply tweaking your approach and making changes to your marketing program isn’t the same thing as optimization.

True optimization requires facts derived from actual experience. And that means data—lots of it, automatically fed into a business intelligence system that you can work with and analyze easily.

Digital marketing today is multichannel. While companies can rely on different mixes of those channels, typically a business that’s serious about digital marketing will utilize at least four major types of channel, each of which produces a lot of data:

  • Social media marketing: Size and demographics of your following/community; rates and types of engagement based on every aspect of your content (type, medium, day of the week, time of the day, etc.); clicks; conversion rate
  • Paid search engine marketing (SEM): Cost per click; search volume; conversion rate
  • Organic search (SEO): Rankings; keywords; search volume; clicks
  • Email marketing: Size of list; segments; open rates; click rates; conversion rate

Of course, there are also other channels—such as affiliate marketing and display ads—that may be implemented, depending on the company’s business model and goals.

Setting your key performance indicators (or KPIs) in support of your specific goals helps you focus your attention on the data that matters—that is, the data that can help get you closer to those goals.

Google Analytics is a powerful website analytics program. However, it can’t tell you everything you need to know. Powerful KPI dashboards are valuable assets specifically because they can help you optimize each channel and each strategy within those channels.

Dashboards are also especially important in multichannel marketing because the data is coming from so many different sources—your email list service, website analytics, social media networks, your CRM, and more. If you are still collecting this data in spreadsheets or only natively in the CRM and other solutions you use, you have to wait for someone to manually compile the data from multiple sources, prep and then share it with you. Consequentially, you are always working with data that is outdated. This makes A/B testing, optimization and true data-awareness difficult.

Instead, it’s helpful to have a single point of collection that receives data streams from these various sources which can then automatically sort and display it in a helpful way. You can see how Grow does that with a free trial.

Conclusion

In today’s complex global market, data is crucial if you want to make better business decisions. One of the ways data can serve businesses in that market is by informing a conscious culture of strategic optimization. Carefully interpret your data and make key refinements based on what that data tells you about your customers and prospects. Automate where you can, and carefully monitor the results for a thorough comparison. Keep refining your approach as your results improve.

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