Business Intelligence is an often used, but misunderstood term. BI is much more than fancy dashboards filled with metrics. When implemented correctly, BI can change the way your company collects, analyzes and uses data. Business Intelligence is of particular importance for marketing agencies and divisions looking to prove ROI.
Becoming a data-driven company doesn't happen overnight. It takes careful planning and execution to ensure accuracy. While we have more access to data than ever before, there is a large gap between having access to and driving value from that data. This article from Brand Channel does a great job explaining some of the issues.
In the video below, I share how we can overcome some of the problems we are facing in the digital marketing space when it comes to using business intelligence to its full potential.
Hey, what's going on, everybody, and welcome to Hack My Growth. Today we're going to be talking about the power of BI when it comes to digital marketing. All right, let's go.
Thanks for joining us for today's episode of Hack My Growth. If you've got a moment, please hit the subscribe button. We'd love to have you as part of our community. So today we're going to be talking about BI, and BI really from a broader term. It means a lot of different things for different people. For some people, it's a specific tool that they use online that visualizes their data. For other people, it is a complete process, everything from planning to building a data warehouse center with all your different tools, and then actually analyzing that data, executing that data, delivering reports, in order to make data-driven decisions.
So my personal belief is that we all, in the marketing agencies, in the business world, should be data-driven because data tells us the truth. It tells us what people are doing, the actions that they're taking. But we can only understand it if we analyze the data because we've got these billions and billions of points of data, but not all of them mean something. And a lot of times I feel like we're focused on the things that make us feel good rather than the things that actually could lead to actionable growth for our businesses.
I'm not alone in that. There's a number of studies that were done, and there was a recent study done about data and how businesses are using data. And what it's found out, that only 7%, right now, of marketing departments, can deliver real-time data analysis. That means data that they can get real-time, seeing what users are doing, and then apply that data back into action to make better decisions.
Only 5% can actually measure the bottom line impact of their marketing campaigns. So, are we driving revenue growth? Only 5% of the industry can prove that. And I know there's a number of factors in there. You have to get buy-in. You have to build out all those closed-loop reporting, and it can be difficult. But the reality is that only 5% of us are doing this, that means only 5% of us can quantify the results of our marketing efforts. And 42% have installed more than 20 different analysis tracking codes, or some sort of software, to help them figure things out over the last few years.
Now what's happening is not that we're using all of this to get more data, it's that we're trying to find these quick wins. So we install something. We don't feel like we're getting results. We install something else, and something else, and something else. So we're switching all the time, and it costs about 25% of the marketing budget for most companies when you're doing this.
Now, I'm just as guilty. I've been on this path of trying to understand how we can use data to quantify our results, to show our clients that we're doing exactly what we said we were going to do. Even for my own business, I want to use this data to make sure that I'm making smarter decisions. And I've been guilty of the rip and replace method where I didn't see what I wanted to see, so let's try something else. But what this is leading to is not data-driven businesses. This led to businesses that are just grabbing for something to hold on to, grabbing for information that might help them out.
Another one of the problems is that we're tracking the wrong metrics. Maybe you've read some of my posts in the past, but I've been hammering on this thing that I like to call vanity metrics. And vanity metrics are metrics that make us feel good but don't tell us anything. They usually lack action. And they're usually made of metrics that are important, but we like to silo them and use them just to make us feel good. Like traffic for instance. Traffic goes up; we assume that what we're doing is working. But the reality is traffic could go up, but our click-through rate could go down. So people aren't actually engaging. Our bounce rate goes up, so yeah we're driving people, but they're leaving. Or maybe it's traffic from places that we don't want traffic from. So just looking at traffic and saying "Well, we increased our traffic 25% last month” isn’t enough. What kind of traffic is it? What did that traffic do? We should start looking at metrics that are actionable, but metrics that are also tied to people, people who are interacting with us, engaging with us.
Another metric that people are obsessed with is rank tracking. In the SEO world, people as Where are you ranking? How high are you ranking for a term? Are you going up or down? I have people all the time just google themselves, and they say "Well I Googled myself here and this is where I'm listed. I Googled myself here, and this is where I'm at." But the reality is, rankings change all the time. Algorithms are making switches and changes all the time. Google makes five, six hundred changes in the algorithm a year. That's multiple times a day. And then you've got different devices. You've got the mobile index. You've got the desktop index. Then you've got people that are doing location-based searches. Maybe they haven't cleared their browser history. There are so many factors, but we focus on what we're doing in these ranking positions. And it drives us crazy, because what do we do with that? Do we throw more content or links out there? Now, rank is important because it gives us an idea of what people are looking for, but sometimes it's not a metric that's actionable.
And really what these metrics are, they're shortsighted. It's like we're obsessed with trying to win tomorrow. We see people who have success online. We see companies that appear to have just grown up overnight and become overnight successes. But we haven't seen the years and years of hard work that they've put in, with the emphasis on using data to make better decisions. So that's another reason that that data is helpful, but the problem is we continue to track the wrong things.
And we also usually have ambiguous goals. I want to grow my business. What does that mean? Do you want to grow revenue? Do you want to grow market share? Do you want to grow profitability? That's ambiguous. We need to start defining better goals for ourselves because there's no clear in without a goal to work toward. We don't know what success looks like. And then we don't define a path to conversion. We don't know what we want people to do to get them where we want them to go. So we're not sure where we should send somebody on our website. What's that next step for them?
So these are some of the problems that we're facing when we're trying to put business intelligence into our business so that we can become data-driven. So what is the solution? Well, we need to become data-driven. And we need to stop looking at BI as a tool, or a set of tools, but instead as a culture. And begin to build data intelligence, business intelligence, into our culture, where people are starting to see data as a vital part of our business.
And then we also need to define what is true. We need to have one version of the truth. With all of these different data sources, they're pulling data from all of these different places. It can start to contradict each other. So pulling that data in, having it brought in and kind of cleaned and processed, so that we know what all these data points mean and that they're defined and that they all mean the same thing. We need to see one version of the truth across the board so that anybody in any department knows what certain metrics mean.
And that's the importance of having a data dictionary where you define these terms out. What does the term bounce rate mean? What does traffic mean? What does a conversion mean for your business? What does revenue mean for your business? All of these different points that you're tracking, they need to have a specific explanation for what they are so that everybody understands it. So then when they get to the data, all the data is in one place. We can have one version of the truth. We can pull the data from one data source. That way the department over here is not pulling from one place, and the department over here is pulling from another place, and they're conflicting. And now you not being data-driven. You've siloed yourself again. The goal behind BI is a culture where we have a set of data we can use to make better decisions.
And then use what you have. There's a lot of great tools out there that can help you monitor website traffic or user engagement. And a lot of those tools are great. But the problem is we don't usually take time to learn them, and use them to their full potential. And a lot of times people think that maybe Google Analytics isn't good enough. But the reality is, is much of the time we're not using Google Analytics to its full capabilities. We're not using Google Tag Manager or search console. And those all do connect to each other, and there is a lot of powerful data that we can get to that.
So instead of just trying, and trying, and trying all these new tools, maybe we should start smaller, and get good at tracking people in certain areas and use that data to validate or disprove our assumptions then we can then begin to move. HubSpot, that's another tool that we use. It's got a lot of data in it. But again, you need to know what you're looking for and be able to process that data and understand how that tool extracts data. WordPress, that's got a lot of plugins that you can install and track and do a number of things. And there are other tools out there. There's a number of other platforms that you can use. But whatever you're using, use it. You have to learn how to use it and learn how to put it into practice so that you can get the insights from your data that you need to get.
We've already talked about a data dictionary. You need to invest in analytics, and not just in your products, but invest in the time. Invest in training. Invest in learning what these mean. All of the tools I mentioned above have free tutorials to help you understand how they work, and what the different metrics mean, and how they pull data, and then how you can interpret that data. So you need to invest time in getting to understand how you're collecting data, and then how you can use that data in a practical application.
You need to test your assumptions. Write your ideas on the board, and then test them. See if the results affirm or deny what you thought possible. And this is a really powerful tool because a lot of the time we get attached to our ideas emotionally. And we begin to believe our ideas are the best because they came from us, and they're personal to us. But the reality is that can sometimes hinder us from growth. What we need to do is have an idea. Let that idea be an idea. Put it out there, run a test, run some marketing around it. Collect the results and see if it worked. And then you can use that data that you've collected, which is now called lag information, you can use that as lead information, saying now we know this, and now as lead information, and now because of what I know, I'm going to try this. So now what you're doing is beginning to use data, and you're becoming data-driven. And that's where testing your assumptions comes in.
Define success. Again, you have to have an outcome if you're going to be tracking this data. You can say "Wow we saw X, Y, and Z." But what does that mean? And that's where the goals come in. That's where the outcome comes in. That's where we need to define what it is we're trying to do as a business as a whole.
And lastly, we want to start to enable real-time visualizations. Company leaders love to see this stuff because it's usually high-level metrics. It helps them know that we're pointing in the right direction. But real-time visualizations are also nice for people on your team to be able to come in and see what's going on. Google released a great tool called Google Data Studio. So if you're just getting into visualizations, you can build reports with Google Data Studio, or even get real-time updated information. Google Analytics has real-time tracking where you can watch what people are doing right now on your website. That's just free. That doesn't cost money. So there's no reason not to start trying to apply it to your business.
Business intelligence is extremely important for any business in today's culture. We're collecting billions upon billions of pieces of data. But a lot of us aren't using them to drive better results. Underneath all this data are powerful insights about the people who are using our sites and interacting with our business. And we can use that information to learn more about them, to better serve them, to build better products, to build better customer service, to change the world around us, if we could just understand what these metrics are, and then how we can apply them back to our business.
In the digital marketing community, the digital marketing space is a prime ground to be data-driven as a culture. But we first must embrace business intelligence. So again just as a recap, the problems are, most of us aren't data-driven. We're tracking the wrong metrics, and we're way too ambiguous when we're talking about our goals. But what can we do? We can become data-driven. We can begin to apply business intelligence to our business starting today.
So I hope you learned a little something important in this video this week. If you have any questions about business intelligence, tools, how to start, how to set things up, please comment below. Connect with me. I'd love to help you out and continue the conversation. And until next time, happy marketing.
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