I genuinely love statistics, and I’m getting my Master’s degree in Applied Statistics to prove it! Most people are scared of statisticians because we use lots of weird Greek letters and never can say anything with 100% confidence. However, there are plenty of simple statistical concepts that marketing professionals can and should understand. Here are my top 3 simple statistical concepts that everyone should know:
1. Sample size
Sample size is one of the most basic statistics used to describe a dataset. It is just the size of the sample! As simple as it sounds, sample size is fundamentally important to statisticians because the size of a sample can make or break an analysis. Too small of a sample, and the results may not be significant. Too large of a sample, and the data can become unwieldy and difficult to manage.
There sure are some weird holidays in the United States (and Canada). One such holiday, Groundhog Day, occurs every February 2nd. On this day we let a groundhog pop out of a hole in the ground in order to predict how much longer winter will last. If he “sees his shadow” then there will be 6 more weeks of winter, and if he does not then spring will come early. Sounds crazy, but this holiday has been celebrated since the 1800’s.
There are many groundhogs in different locations that make predictions, but in Philadelphia we look to Punxsutawney Phil for our forecast. Up to 40,000 people gather to watch Phil each year making Philadelphia home of the largest Groundhog Day celebration. People trust in his predictions even though he only has 39% accuracy, according to StormFax Weather Almanac. Below is a picture of the cute little (not so little) guy helping answer interview questions for Channel 6 News.
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Viraj Patel is working with MaassMedia as part of Cornell University’s externship program. He has worked predominantly in the hotel and retail furniture industries. In his free time he enjoys watching movies and following his favorite sports teams.
You cannot manage what you don’t measure, and that certainly applies to marketing. Measuring how well each marketing channel drives traffic to a website is imperative to any company’s success, and analytics allows you to do that. Because my background is predominantly in hospitality, I’d like to demonstrate how analytics can benefit the hotel industry.
55% of all leisure and business reservations are expected to be made online for 2013 (PhoCusWright), which means measuring and optimizing a hotel’s digital marketing is more important than ever before.
Although monitoring standard web metrics like visitors, page views, and average visit duration is useful, that information is just the tip of the iceberg. Truly Transformative Insights™ that change the way your organization manages its marketing spawn from pulling and correlating data, not only from web traffic, but also from a variety of marketing channels.
The average conversion rate for hotel websites is about 2%. In other words, approximately 98% of visitors to a hotel’s website leave without making a reservation. This suggests that the hotel industry could be doing significantly more to capitalize on visitors’ interest. It is imperative that hotels utilize the right data in the right way to paint a clearer picture of how their audience interacts with their marketing.
The key to understanding your audience is segmentation. We’re not necessarily referring to segmenting visitors by age, gender, or geographic location (although, depending on your business goals, those qualities might be important). At MaassMedia, we strive for more granular segmentation to understand each visitor’s intentions, then serve each visitor a unique digital experience optimized for conversion.
With analytics, you can measure where each visitor stands in the purchase consideration spectrum. Some visitors may have their minds made up about booking a room, while others might be on the fence. Defining the Key Website Actions on your hotel’s website and tracking visitors who complete these actions can reflect a visitor’s propensity to buy. Additionally, analytics tracks metrics like how recently or frequently a visitor views the website, which can help identify which visitors are ready to book a room and which are undecided. Using this information, hotel websites can then personalize the content that the visitor sees, raising their likelihood to book.
For example: Let’s say a prospective guest has visited the hotel’s site on numerous occasions in a short time span without making a reservation. We can establish that the guest is probably significantly interested in booking a room, but might need some added incentive to make the decision. Using analytics, the hotel could identify these visitors and display a time-sensitive offer only for those visitors who are on the fence.
Hotel franchisors can also capitalize on trends in their data. For example, if there is a substantial increase in searches for a particular destination, brands can recommend that their franchisees in that location raise their rates because of the spike in demand. This could substantially improve the revenue that the franchise’s website generates.
Although opportunities to customize or modify the website may be limited for branded hotels (franchisors may not give complete freedom to alter or add content to their website), independent hotels and resorts have significant opportunities to use analytics to their advantage. Even if they can improve their conversion rate from 2% to 2.5%, that’s still a 25% increase in conversion rate.
Many independent hotels haven’t implemented any data analytics on their websites. Without even a basic implementation, hotel owners are missing out on important insights about their clientele. For example, most hotels offer some assortment of packages to their guests, but if hotels aren’t using analytics, they can’t know which packages are most and least popular with certain types of visitors. By tracking purchases only, they miss out on seeing how many guests viewed the package but chose not to purchase it.
Similarly, if the hotel offers services like banquet halls or catering, web analytics can shed light onto visitors’ level of interest and the best ways to market those services online. Are guests searching to sign up for loyalty membership? Do they want to book meetings or events in a particular city or region? Are they more or less price sensitive? Analytics enables hotel brands to gather data that can answer these questions. If utilized correctly, it can be a tremendous asset to improving a revenue management and building a customer relationship management (CRM) system.
Analytics in the hospitality industry provides a way to better understand guests’ purchasing and staying behavior, as well as audience engagement across a variety of marketing channels. MaassMedia works with a variety of clients in a range of industries. If you’d like to know more about how your organization can use marketing analytics to find Transformative Insights™ about your audience, contact us today.
In today’s world of Big Data, simplicity is being lost. Every day, analysts and marketers are inundated with enormous amounts of information about consumers, including shopping patterns, attrition, engagement, annual spend, and more. Then there’s product data, which allows retailers to know which items generate the most margin or brand loyalty. And we can’t forget competitor data, which is essential for keeping tabs on the industry and staying one step ahead of the rest. There’s customer survey data, which can measure brand awareness. Then on top of that, you’re regularly being offered new tools to measure all of these metrics.
Sometimes, we need to slow things down to find clarity. Step back from the noise and take a look at the Big Picture, not just the Big Data. When you see things from afar, you can discern the kind of information that matters to your business from the information that doesn’t produce actionable insights.
In this post, I will outline my process for developing a marketing plan across multiple channels based on ROI. This is not intended as an “End all, be all” formula. It’s more so a way to get you thinking about your marketing and guide some of decision-making when it comes to your marketing budget.
Historical data is an analyst’s best friend. When you know what happened last year, you can easily use that data for future planning purposes. Keep in mind, one data point does not make a trend. You can’t count on that new promotion to keep returning high response rates just because the first campaign was successful. It may have been one and done. I like to use at least three data points for directional purposes, but more are always better.
Although different marketing channels often have very different KPIs, there can be common metrics (Pay attention, because this is where we remove the noise!). With email, you have opens, click throughs, bounces, etc. With direct mail, you might look at metrics like in-home rates and coupon redemptions. You get the point, but to calculate ROI, you’ll need to tie the marketing contact back to a purchase. I know this can be difficult, but once you tie back the purchases you can then use common metrics like response rate, average order, margin % and cost per contact to do comparisons across channels.
Most businesses are affected by seasonality in some way or another. Just because your mobile campaign performed well over summer doesn’t mean customers will respond the same during the holiday shopping season. Use data from comparable time frames year-over-year. I like to build my plans quarter by quarter, but you may need to use different time periods based on your business strategy.
This is where things can fall apart. Let me guess, you need more sales and margin, more customers and higher retention, but your budget was cut this year. That might be a problem, but it doesn’t have to set you back. Ask yourself this: Do you need sales today, or can you afford to spend a few dollars on branding? As marketers, we tend to address the immediate needs of the business, often pushing aside the long view. This is where ROI can really help. Take a look at the chart below.
Let’s say you have $500K to spend for a month-long campaign. Where would you put it?
Here’s what I would do:
Print is not being utilized in this campaign due to its low ROI and low margin per contact. This plan is really looking at the “short run.” The business requires sales now and can’t spend funding on print. Although this might be a tough pill to swallow, your ROI analysis could spur a conversation with higher-ups about branding, which may necessitate a future budget increase.
Google Analytics has a plethora of features that most users only begin to explore. One of the more unique features that GA offers is Real-Time Analytics, which shows you what is happening on your site at that current moment. To access this feature, go to the “home” tab in GA and select “Real-Time” from the left hand report navigation.