Thanks to Big Data, marketers have more information about their customers and behaviors than ever. Long gone are the days of waiting for a final sales report to determine the success of advertising campaigns. Now, brands can track performance, revenue changes, and consumer activity in real-time to determine the success of their efforts. In 2023, 88% of marketers reported using data to enhance their understanding of customers, with 77% reporting increased access to valuable data over the last year. But how do marketers use data to make budgeting decisions?
This post explores the various data points marketing professionals use when making strategic decisions. As we examine the types of data used and how they factor into important decisions, you’ll discover how valuable reports and consumer data play a role in budgeting, resource allocation, ad spending, and more. Whether you work in hotels, events, another sector of hospitality, or a different industry altogether, you can finally stop asking, “How do marketers use data to make budgeting decisions?”
So, how do marketers use data to make budgeting decisions?
Although you may not immediately associate advertising with statistics, gathering and interpreting data has become critical to creating successful, affordable marketing campaigns. Before we dig into all the ways marketers use data, let’s explore the types of data they find most valuable.
What data points do marketers use?
Data quantifies action, and marketing professionals across various industries use it to create more insightful, fact-driven sales strategies. Whether you work in hospitality, venue management, or product sales, the following data points can help your team make better budgeting and strategy decisions.
- Historical data
Review past projects, events, and performance using historical data, a broad term that includes many different data points. Historical data allows marketers to view details from the past, review performance, pinpoint trends, analyze how patterns develop over time, and identify how the past affects current outcomes.
- Descriptive data
Marketers use descriptive analytics to analyze, interpret, and present historical data in a concise, meaningful way. Descriptive data is a branch of statistics used to describe a specific sample set without making broad categorizations about the entire population. It detects patterns and relationships, identifying trends and potential connections between dataset variables, such as a particular marketing strategy and customer engagement levels.
- Customer data
A broad term encompassing many data points, customer data includes personal and demographic information about consumers, their behavior, interactions, transactions, attitudes, and more. Businesses may obtain this information directly from customers or a third-party data service.
- Behavioral data
Understand your clients and customers better with behavioral data, which details how they engage with your business. Marketers use behavioral data to analyze and describe a range of customer interactions, as it monitors website engagement, email signups, video views, card usage, and other activities. This information allows brands to understand their customers better and create more personalized marketing.
- Attitudinal data
While harder to assess than other data points, attitudinal research offers valuable insights into what drives customers. Marketers use attitudinal data to interpret customers' feelings about a particular product or experience, what motivates them, how appealing they find your brand, and other intangible ideas.
- Sales data
Businesses that sell products or services use sales data to analyze the success of their efforts. With sales data, brands can predict future patterns, driving lead generation and improving customer satisfaction. Marketers use sales data to review past projects, campaign performance, revenue per sale, customers' average lifetime value (LTV), and other key performance metrics.
- Product data
A critical component of eCommerce, product data refers to all the information related to a product’s design, production, assembly, delivery, and maintenance. Providing accurate, detailed product data is critical to building trust and credibility with online consumers.
- Market research
Combining behavioral data and economic trends, market research data is critical to understanding your audience and how they operate. Advertisers complete market research to uncover what customers want, how they perceive a brand or product, and what changes companies should make to meet their needs better. In addition to customer behavior, market research includes competitor and distributor data, providing a big-picture view of what influences and drives your market.
- Conversion rates
Some of the most valuable key performance indicators (KPIs) in marketing are conversion rates. Conversion rate measures how many customers take a particular action—such as purchasing a product, downloading a demo, or clicking an email link—because of something they saw or received from your brand. Successful marketing engages consumers and propels them to take the next step—whatever action that may be. While preferred conversion rates (e.g., website conversion rates, downloads, views, clicks) may vary by industry or brand objectives, they are some of the most common metrics used to measure marketing success.
How does data influence marketing decision-making?
As helpful as data is, you can’t do much with reporting alone. Marketers must combine data, experience, and intelligent decision-making to optimize their budget and advertising efforts. When analyzed thoughtfully and thoroughly, you can use data to—
- Understand your customers. Using consumer data, like demographic and behavioral data, companies can learn a lot about their target audience, like activity patterns, preferences, and demand trends. Who are your customers? What do they need? What do they want? Where do they interact with your brand most? Which channels convert the most leads?
- Develop a data-driven pricing strategy. The primary goal of marketing professionals is to sell the right product to the right consumer at the right time and price. How much should you charge for services? When should you raise or lower rates? Are you underperforming compared to the comp set? Data can help marketers make these determinations and identify when a shift in strategy is necessary.
- Track spending. With the right tools and information, data allows companies to track where every dollar comes and goes. Monitor spending, product cost, campaign ROI, and other financial data to ensure you stick to the budget and allocate resources optimally. Reduce the risk of cost overruns by reviewing data for similar past projects and their expenses. What unexpected costs put you over budget in the past? How can you avoid them this time?
- Set achievable goals. Data helps marketers develop realistic, specific, and measurable goals. After establishing marketing objectives, determine which metrics should be used to track progress and which data points are best for gathering that information.
- Manage your timeline. Historical data enables marketers to review similar projects from the past, what the initial plan was, and how it played out. How long will it take to prepare the campaign? How long will it run? What hiccups have you encountered with similar campaigns, and how can you avoid them?
- Assess team performance. How is the marketing team performing overall? Who is the top sales representative? Which team members are the least productive? Relying on objective data makes it easier to identify which employees excel and which could benefit from some guidance.
- Make better budgeting decisions. With the right data, marketers can anticipate how patterns, trends, and potential complications could impact the budget, as it provides a historical, reliable foundation for estimating costs. By analyzing past expenses, marketers can identify trends, missed opportunities, and improvement areas, allowing them to predict cost drivers more accurately. Additionally, keeping up with vendor, client, customer, and employee data makes it easier to identify potential financial issues early and fix them before they balloon.
Do marketers use data when establishing a budget? How?
Many marketers use data in every step of the budgeting process, as it allows you to review past performance, current conditions, and future forecasting. The more information you have, the better your budgeting strategy will be, so follow these steps to create a data-driven marketing plan for your business.
Step One: Collect data
Determine whether you’ve completed similar campaigns or projects in the past. If so, collect relevant data from comparable campaigns, such as financial records, performance metrics, consumer data, and project reports. Establish your target audience for the upcoming campaign and pull their demographic and behavioral information.
Step Two: Analyze collected data
How much did you spend on similar marketing activities? What unforeseen expenses did you incur? Have costs increased since then? After gathering the data you need, review it, looking for trends, outliers, and patterns that could impact future efforts.
Step Three: Estimate budgeting needs
Determine how trends, cost drivers, and unexpected expenses impacted similar efforts. Combine historical data with your experience and expertise to develop a more accurate estimation of costs for upcoming projects, creating an informed, data-driven budget.
Step Four: Run scenarios to mitigate risks
Strengthen your budget with scenario planning. Scenario-building tools allow sales and marketing teams to run various imaginary scenarios to assess their potential impact on the budget. Identify what could harm your efforts most, and allocate resources to problem areas to mitigate financial risks.
Step Five: Monitor the budget
Project management systems and business intelligence tools provide valuable, real-time data that marketing teams can use to analyze campaign performance. Use them to check on project timelines and budgeting regularly. Monitor how much engagement different content promotes. Are you on track to meet your goal? Are you over or under budget? Estimate where the budget will be when the project ends and adjust your strategy as necessary.
After every marketing campaign ends, review expense and performance reports. Pinpoint what strategies were effective, which weren’t, and how much you spent. Take notes on what worked, what didn’t, and how you can improve similar efforts in the future. Get more out of every dollar you spend by regularly reviewing your budget and performance and adjusting strategies as needed.
What else can marketers do with data?
In addition to being an integral part of budgeting, marketers can use data to improve many other parts of their business. Whether you want to boost sales, track campaign progress, or incorporate data insights into more areas of your business, you can! With the right data points, marketers can—
- Determine what content works
How well is a particular campaign performing? How many people did a specific activity reach? What content styles do your customers find most engaging? Analyze web activity, like site visits, clicks, video views, and other behavior, to assess what marketing content captures your audience’s attention most.
- Boost search engine results
Assess how well a variety of online content is performing, from blog posts to business listings. Where does your business appear in search results? Is it at the top? Are you even on the first page? Optimizing online content can help it appear higher in results, increasing audience reach and conversion potential. Tracking SEO performance can boost your brand’s online reputation and drive more business to your front door.
Maximize your exposure by optimizing technical SEO data points, like optimal keyword usage and readability, as they influence where content ranks. For example, adding too many keywords can cause a search engine to flag content as spam; using too few can cause it to look non-credible.
- Increase profits
With data, marketers can assess if they’re allocating resources effectively, better anticipate expenses, and capture more revenue. Did your efforts increase return on investment (ROI) or bottom-line profits? Why or why not? Review campaign performance to identify underperforming campaigns and lackluster marketing channels. Reduce spending on low-performing content and reinvest in more effective methods.
Now, you know how marketers use data to make budgeting decisions.
Put this information to good use by revamping your budgeting strategy. Implement the tools, strategies, and tips you learned into your business plan to ensure your team always makes the most informed decisions possible.
Hospitality professionals and marketing teams can utilize data from a hotel’s CRM, online channels, third-party agents, and professional reporting services to obtain valuable information about guests and competitors. Next, we’ll show you how to create a hotel marketing plan that includes consumer data, market research, and more.
