Marcel Duy, Product Director, Digital Business Planning at IKEA
In most cases, when someone claims they can show you your future, the appropriate response is to roll your eyes. Fortune telling may have a bad rap, but when it comes to your marketing, the help of data and tech can lead to surprisingly accurate predictions of what’s to come.
Marketing forecasting is a relatively new possibility for marketing teams, but one with a lot of potential to improve marketing planning so that you get the best results for the amount work and budget you put in. If your organization invests in a marketing performance management platform that helps you get actionable insights, you can use it to then show you what to expect in the days to come. Here are some of the main things you can learn with marketing forecasting.
Not all “deals” are created equal. The goals that marketing and sales teams focus on now—the number of leads and new sales—both ignore this reality. Some sales are larger than others, and some customers will net you more revenue over the life of their relationship with your company than others.
Your data can tell you how much your current customers are worth. Which ones consistently renew, or invest in additional features and products?
When you’ve identified your most valuable customers, you can begin to decipher what they have in common. Perhaps it’s easy to identify like the size of the business or the type of services offered—or maybe it’s something a bit more complicated like the type of features they use the most during a trial. Whatever the case, making sure that you have lots of data and a way to see it clearly will help you figure it out.
Knowing the value of your current customers will help you better see the value of your leads. You’ll know how to identify those that fall into that category of MVCs (most valuable customers). Your marketing efforts should specifically target these prospects.
Every time a CMO sits down to figure out the budget for the next quarter, they face the difficult prospect of deciding which departments and tactics should get the biggest piece of the pie. The goal is always to maximize budget performance. Where should they put the money to produce the biggest impact for the business?
The rise of analytics has made the process a bit easier, but the problem with marketing analytics is that they’re easy to misread if you don’t connect the dots to business goals. If your Google Ads are getting lots of impressions and clicks, but the people doing the clicking aren’t turning into customers—or alternately, if they are but your data doesn’t manage to track them from click to sale—then your data could be leading you astray.
Data-driven marketing requires the ability to put all the pieces together to see which marketing activities contribute which results. Once you can see the big picture behind all your data, then you can start using past data to predict how future actions will pay off.
Maybe it’s been easy for you to see that webinars often lead to sales but are harder to track the journey that leads someone to the point of signing up for a webinar. Once you can more clearly see just which awareness level marketing activities are helping guide your prospects to that point, you can predict which will continue to do so.
Turning your data into evidence-based predictions will make it much easier to set reasonable goals for each quarter and make sure the marketing plan you create is packed with the activities most likely to help you reach them.
A lot of B2B marketing is characterized by waiting. If your business has a long and complicated sales cycle, it’s hard to know how long to expect it to take for your leads to convert. Unless, of course, you have the right data. (You may be noticing a theme here.)
Just as your data can show you trends in which customers are likely to be the most valuable to you over time, it can show you trends in how much time different types of customers spend making the decision to buy. If you know how long it normally takes businesses of a certain size to reach the point of purchase, then your company can better predict what the sales revenue will be for each quarter based on the number and type of leads and opportunities currently in the pipeline.
You don’t need a crystal ball to accomplish marketing forecasting at your organization; you just need the tools to collect reliable data and analyze it effectively. Although data-driven predictions are not without fault, they provide the best expectation for the future based on your historical precedents (and are far more accurate than you’d get from a fortune teller).