Marketers are known as the creative, personable types. They are the people who put together ads, brochures and other catchy creative pieces. They plan events and have a supply of branded giveaways. However, most people don’t realize that marketers are also numbers people. Numbers and data are the foundation of solid market strategy. From analyzing your client base to digging into your pipeline of opportunities to understanding your market share, these figures hold opportunities for growth. Numbers make great baseline data from which you can measure success, but they also illuminate future strategy.
Does it make more sense to focus your efforts on City A or City B? Should you push Industry Y or Industry Z? While there are a lot of factors to consider, marketers want to know the potential for revenue. Let’s assume that City A and City B have a similarly sized market. If you have 50 percent of all business in City A and only 4 percent of the potential business in City B, where should you spend your time? The numbers tell you that you have the most potential in City B. Now, things are not always that simple, but strategic decisions are easier when you take the time to calculate market share. Once you have the overall big picture, take your calculations a bit deeper. Break it down by industry within geographies or within sub-segments of an industry or by any numerous data combination. Use this data to then develop a list of prospects to target.
Recognize the wealth of historical information contained in your pipeline – it tells you how well you performed over time. Over the past three years, what percent of new opportunities did you win? Anything in the 60 to 70 percent range is a good target and something to celebrate. But do you use this data to make future predictions? Revenue goals don’t need to be based on gut instinct. Use your historical data to determine how much potential revenue you can expect based on what’s in the pipeline at any given time. If you calculate the amount of time something stays in the pipeline, you can begin making assumptions on how soon some of those items may turn into actual dollars. In addition, you may want to look at things like the type of work in the pipeline, individual win/loss rates and how much is typically added throughout a year to use in your predictions. This exercise will help you determine if you are truly on-target to hit established revenue goals. Team members can then adjust strategy and behavior, if needed. The plan is for you to use this data to set realistic goals in future years.
In forecasting and calculating market share, it’s also important to understand the buying behavior of your existing clients. How much revenue does the firm generate from a typical manufacturing client? How about a construction client? Let say you have equal market share in both of those industries, but the average manufacturing client pays you $23,000 a year and the average construction client pays $16,000. Where do you prioritize? The data says manufacturing and that is something that you need to give serious consideration. Track buying behavior monthly and complete year-over-year comparisons to help with goal setting.
Numbers Can’t Be the Only Factor
It would be easy to base all decision by numbers alone, but that’s not the case. That’s where the “science” of marketing must work in conjunction with the “art” of marketing. Many people only see the art side of marketing. But there is a science to what marketers do, too. Strategic marketing relies on research using mathematical models. Only when you have a complete and quantitative understanding of your clients, prospects and competitors, do you have the foundation on which to build strategy. You should aim to have the numbers help show you the way to reach your desired goals.