In a broad sense, statistics refer to the branch of mathematics that deals with gathering, analyzing, and interpreting data. If you are one of those
In a broad sense, statistics refer to the branch of mathematics that deals with gathering, analyzing, and interpreting data. If you are one of those people who retain their childhood phobia for math, don’t worry, this article is not about math. Statistics in a narrower sense also simply refer to the figures that are used to describe data. What does any of this have to do with marketing, though?
As the internet-driven modern life generates increasingly massive amounts of data, the field of marketing is becoming more and more dependent on the use of statistics. It is no surprise then that this field has become open to statisticians and that today, there are several job opportunities available for statisticians in the field of marketing.
While you do not need to be a statistician to understand how this works, hiring one might be a good idea if you run a business.
How Can Statistics be Applied in Marketing?
Almost every single facet of marketing requires an understanding of relevant data to be successful. Here are a few examples:
1. Identifying the Target Audience and Understanding Customer behavior
A target audience is simply a group of people that are most likely to buy a product or service. For instance, baby powder is most likely to be bought by mothers. A target audience is central to all marketing efforts, and statistics help marketers find out who their audiences are.
Furthermore, marketers need to know several crucial features of their audiences. E.g., age, sex, income, educational background, nationality, residence, etc. When this data is aggregated, statistics provide a set of tools that makes it possible to glean useful insights that can inform decision-making.
2. Conducting Competitor and Industry Research
Statistics can help marketers identify competitors, analyze their marketing, operations, and strategy, and suggest ways to outmaneuver these. By so doing, statistics help marketers understand the industries their companies operate within, making it easy to plan, adjust, and iterate growth and lifecycle strategies that work.
3. Creating Marketing Strategies
A marketing strategy is a high-level plan that outlines the positioning business will take in a specific market, and the steps to be taken to achieve overarching marketing goals. The key to creating a solid marketing strategy is understanding your target audience and conducting proper competitor and industry research. All of that information is then used to come up with an effective action plan and rests on the strength of your statistical analysis.
4. Analyzing the Success of Marketing Campaigns
Marketing tracking programs measure customer satisfaction, brand identity, and examine the relationship between a company and its customers. To initiate such programs, marketers analyze the company’s statistics as well as those of the industry as a whole.
The only way for marketers to objectively find out how successful their campaigns are is by analyzing data, facts, and figures. Specifically, the analysis will center around Key Performance Indicators (KPIs), and in highly sophisticated marketing teams, statistics will be used to uncover the detailed marketing return on investment (ROI).
Using data and statistics to understand customer behavior has become a unique marketing method referred to as data-driven marketing. This statistics-based approach allows marketers to optimize and improve their marketing efforts by deeply understanding their customers’ motivations.
Marketers find out as much as they can about their customer’s needs, beliefs, and buying behavior to streamline marketing efforts. Businesses that use this method get 5 to 8 times more ROI on their marketing spend.
Gathering data and statistics helps marketers figure out the right tactics and mediums to employ on a particular target audience. For instance, while advertising on TV might work for a particular group of people, the younger generation is more often found online. Digital marketing then becomes the best way to engage with younger customers.
Although this may be obvious, there are some things marketers cannot know without referring to statistics. For instance, which particular social media platforms their target audiences use, what time of the day they log in, what kind of content they prefer to engage with, etc. Understanding these could be the key to success for a marketing campaign or strategy.
Given how much data modern living is likely to continue to produce, it is safe to say that statistics, despite having been around for centuries, is an essential future-facing career field. You can read all about this here.
5. Statistics Helps Marketers Find Problems and Fix Them
As previously noted, data analysis and interpretation help marketers find out what tactics are bringing the most returns and how they can replicate them. Similarly, statistical analysis can also help to uncover previously hidden problems and suggest potential solutions.
Studies have shown that many customers in today’s highly digitalized world are willing to share data about themselves to receive personalized services. Customers want to feel recognized and appreciated by brands. 80% of buyers are more likely to buy from a company that offers them personalized experiences. And marketers have reported seeing an average of 20% increase in sales when they utilize personalized experiences. Collecting and analyzing data to offer customers personalized experiences can drastically improve customer satisfaction, increase marketing success, and boost sales.
6. Statistics Helps Predict Marketing and Sales Trends
Using data gathered from past sales, marketers can predict future trends. This practice is referred to as predictive analysis. Accurate predictions can be used to create effective strategies to enhance a company’s performance and meet future challenges proactively. Historical data can also be analyzed, used to predict customer behavior, and aid in creating plans to increase profit and prevent losses.
Additionally, marketers can collect and analyze data to understand their customers, interests, and desires. They can then use the insights they gain to offer these customers incentives to keep buying from their companies. Also, an analysis of loyal customers’ characteristics could help them find and target similar individuals that are likely to remain loyal.
Statistics is The Basis of Modern Marketing
The effective use of statistics provides a distinct advantage to businesses who use them. While many continue to approach marketing purely from a qualitative perspective, objective data often provides the most comprehensive picture and makes for more precise decision-making. For the modern marketer, the challenge is to properly analyze and interpret data to understand customers, choose the right tactics, and fulfill the ultimate aim of any marketing strategy – maximize profits efficiently.