SaaS marketers need in-depth insights into marketing data, such as customer behavior, market trends, return on ad spend (ROAS), and more, to present to the C-suite and create data-driven SaaS strategies that impact revenue. In such instances, marketing analytics can prove to be a game-changer. It can help gain a better grasp of the target market and the brand messages and promotions that resonate the audience.
In this post, we will share four types of marketing analytics and best practices SaaS marketers can leverage to improve conversion rates and ROI.
What Is Marketing Analytics?
Marketing analytics refers to the comprehensive marketing strategy that uses SaaS visualization technologies to analyze data related to a business's marketing efforts to grow revenue and build loyal customer relationships. This data-driven approach uses several platforms, including PPC ads, search engine results, and social media, to understand customer behavior, track trends, and gauge the best business strategies.
When leveraged correctly, marketing analytics enables SaaS marketers to build a scalable revenue marketing framework and make future predictions based on data trends rather than gut feelings.
For instance, if the existing strategies fail to bring a predictable return on marketing investment (ROMI), it is a sign that the team needs to change its approach. They need in-depth insights into channels and metrics that directly impact the revenue.
Marketing data analytics can help them identify and track actionable revenue metrics and top-performing channels based on SaaS trends and target audience interests. Armed with these insights, SaaS marketers can create highly engaging content that maximizes engagement and conversions. It can help them establish their business credibility, a crucial factor for recurring revenue.
Why Is Marketing Analytics Important?
SaaS businesses use multiple platforms to connect to their target audience. They aim to ensure that the brand message reaches the ideal customer profile (ICP) at the right time to get maximum return on investment.
In addition, they focus on ensuring that their product, services, and prices are competitive. All these factors can help businesses develop a positive brand identity and become industry leaders. However, handling vast marketing data might lead to data misinterpretation. That's when SaaS marketers need to invest in a state-of-the-art marketing analytics tool.
With a suitable type of marketing analytics tool, you can -
1. Perform Accurate Market Research: For a product to succeed, you should ensure it's a market fit. For this, you should understand its source of demand and discover the customer segment to which the product will appeal. With a marketing analytics platform, you can analyze traffic to your websites, social media, and campaigns, a create an ideal customer profile (ICP) accurately.
2. Generate Quality Leads: When you run ad campaigns on social channels like LinkedIn, you need to choose an audience. This audience can be described by hashtags, geographic region, age, brands they follow, etc.
To know whether the audience is responding to the ads positively, you need to check out the stage -
- When customers interact with the ad (metric to consider - clicks)
- When they interact with the landing page (metric to consider - bounce rates)
- When they act on CTAs (metric to consider - conversion rates)
If you put out ads to an audience that doesn't align with your ideal customer profile, the mentioned metrics will show poor results. This way, marketing analytics can help evaluate the data to generate quality leads.
3. Understand Leads Behavior: Marketing analytics enables SaaS marketers to understand the customer journey and lead behavior.
For instance, the platform allows you to track the pages your leads specifically click on.
Let's say they click on a page highlighting churn optimization techniques and tools. This signifies that they are searching for a solution to help them optimize their churn rates.
These insights can help you create personalized and authoritative content that converts. This can help you win and retain customers and build loyal customer relationships in the long term.
According to reports, 75% of marketers leverage marketing analytics to evaluate the performance of their existing marketing strategies. However, as we mentioned, marketing analytics extends beyond basic data analysis for lead or demand generation. SaaS businesses can use it to re-align their marketing structure and create a loyal customer base that allows them to generate recurring revenue.
Four Types of Marketing Analytics
There are four types of marketing analytics - descriptive, diagnostic, predictive, and prescriptive.
What type of marketing analysis can help your SaaS business earn positive ROI? The answer to this question is not as simple.
The shared different types of marketing analytics can help you find - the "what," "why," "where," and "how" of your marketing data, as shared below.
You can leverage these marketing analytics methods and integrate them to get accurate insights for your SaaS strategies.
According to McKinsey, an integrated analytics approach can help free up 15-20% of total marketing spending. Organizations can reinvest the money to drive superior growth or drop straight to the bottom line.
Let's get started.
#1: Descriptive Analytics
This is the most commonly used marketing data analytics that allows SaaS companies to analyze data on past events to figure out the present business outcomes.
For instance, data on past marketing efforts can help them better understand the following aspects.
- What was the revenue at a specific time frame of the previous quarter?
- What was the marketing team's overall productivity?
- What was the churn rate?
The answer to these questions can help them understand the impact of their SaaS strategies. Besides, they can take a call on whether to continue with the same tactics or adopt a new SaaS marketing strategy.
This analytics method is relatively easier to implement compared to the other types of marketing analytics. Can you use it to make future predictions?
Yes. Although you can implement this marketing analytics method to make predictions regarding the future, it may not be the best bet. The fluctuations in ever-evolving SaaS trends can reduce descriptive analytics reliability.
#2: Diagnostic Analytics
Similar to descriptive analytics, diagnostic analytics leverages historical or past marketing-related data to address the gaps and help SaaS marketers build a solid marketing strategy.
The difference is that it focuses on "why something happened" rather than "what happened."
Most SaaS marketers skip this analysis as they switch to the "what will happen" stage instead of analyzing the reasons behind the past marketing results.
With diagnostic analytics, SaaS marketers can analyze the following aspects -
- Why did the sales decrease in the last quarter?
- Why did the customer churn rate increase?
- Why did specific products outperform their prior year's sales?
This marketing analytics is more helpful than descriptive. However, it's still not appropriate to address futuristic use cases. For instance, SaaS marketers cannot accurately predict future revenue based on past results. However, it can help identify the gaps in marketing efforts.
#3: Predictive Analytics
This marketing analytics enables SaaS marketers to use the data and make accurate calculations to predict the future.
Predictive marketing analytics tools use machine learning algorithms combined with marketing-related data. It helps SaaS businesses address use cases, such as -
- Demand for their new SaaS products and services in upcoming years.
- Predict the most profitable customer segments to target based on interests, demographics, and more.
- Predict and avoid churn by figuring out customer dissatisfaction reasons.
- Build customer personas and forecast valuable customers that could have long lifetime value.
Establish the following core elements to get the most accurate results with predictive analytics.
- Identify a key pain point in your SaaS strategy to solve.
- State what you want to predict (your KPIs) and collect the data.
- Define your final objective.
Say you aim to maximize possible revenue opportunities within your customer segments. With predictive analytics, you can evaluate and identify customers that will most likely buy your products and services. This analysis utilizes data related to your customer's purchase history, interests, and more for an accurate forecast.
With these insights, run a targeted email marketing campaign to increase click-through rates (CTR) and sales. So, initially, if your CTR was 1%, it might boost up to 3%.
Here, "data" is the most valuable resource for predictive analytics.
Hence, SaaS businesses with a rock-solid foundation in diagnostic and descriptive analytics can reap the best benefits from predictive analytics. The more the data accuracy, the better the predictions.
#4: Prescriptive Analytics
Prescriptive analytics is the final pillar of marketing analytics. Like predictive analytics, prescriptive analytics can help SaaS marketers analyze profitable industry trends in the future. However, prescriptive analytics mainly focuses on actionable steps to reach your SaaS marketing goals.
So instead of addressing "where will you reach?" it guides you on "how can you impact what happens?"
Here's a quick example to consider.
Let's say - predictive analytics suggests that your website visitors may decrease in the upcoming quarter. Here, with prescriptive analytics, you can reverse the possible outcomes.
Prescriptive analytics can suggest multiple methods, such as running ad campaigns and promotions, increasing targeted marketing, and more. SaaS marketers can leverage these methods and generate a better ROI.
Another example: if predictive analytics highlights potentially profitable new customer segments to target, prescriptive analytics can help you identify when and how to reach them to boost the chances of conversions.
In short, prescriptive analytics will help you reduce your churn rate, thereby helping your SaaS business scale.
How can you generate ROI-boosting business suggestions using prescriptive analytics?
Again, you need accurate "data." The more precise the data, the better the business suggestions.
Pro Tip: Deploying Revlitix, our revenue marketing platform, can bring the most tangible results without increasing the cost of building dashboards. The platform will offer you high returns on your investment in advanced marketing analytics.
With all performance data at a centralized location, Revlitix analyzes thousands of actionable KPIs across marketing channels and millions of data combinations to provide insights that directly impact revenue. This tool automates countless hours of ad hoc analysis and reduces the chances of data misinterpretation.
Marketing analytics can be pivotal in strengthening your SaaS marketing strategy. This is because this data analytics enables marketers to analyze past and existing data to predict trends and make data-driven accurate decisions. Understanding and presenting the industry trends to the C-suite can help marketers build revenue-boosting SaaS strategies.
Understanding how each data analytics tool can impact your SaaS strategies is the key to achieving your revenue goals. Leverage the information shared in this post to determine your SaaS goals and choose the most suitable type of advanced marketing analytics tool.