How Digital Experience Analytics Can Help Manage Marketing Budgets During Challenging Times

Semangat Membara

Niki Hall: Chief Marketing Officer at Contentsquare, Advisor, Author.

In the past year, CMOs saw business and budgets ebb and flow. Following the tail end of the pandemic, confidence grew, but not long after, we saw indications that a recession was approaching as job reports came in, interest rates began to increase and macroeconomic factors affected global markets and the supply chain.

Now, as CMOs are in the throes of budgeting for 2023, there’s a fair amount of uncertainty and conservatism. But what’s interesting is many CMOs also hold on to optimism in ways we didn’t see in recessions past. By and large, their focus continues to be on high-value, high-return spend and a heightened readiness to accelerate activity at the earliest signs of recovery.

To no one’s surprise, the uncertain economic outlook means that marketing budgets have not fully recovered to their pre-pandemic levels. According to a recent Gartner report, while marketing budgets have climbed somewhat from 6.4% to 9.5% of company revenue, they still lag behind pre-pandemic levels of 11%.

The silver lining of the pandemic proved that brands were still willing to invest, but in areas that present greater value at scale: targeted, digital-forward marketing strategies. In fact, a study noted in Harvard Business Review cited CMOs plan to increase their proportion of spend on digital marketing to 73% in 2023, a considerable jump of 16% from 2022’s spend. CMOs are planning to fortify this approach into 2023, as agility and digital investments proved positive over the last two years and have incredible potential moving forward.

Continued digital transformation will be a marketer’s rallying cry for the foreseeable future. Digital marketing represents the future of many businesses because it allows CMOs to reduce costs during economic uncertainty while maximizing opportunities. But how?

Data, of course, plays a huge role. Digital experience analytics, in particular, have the power to inform decisions on marketing spending by taking a close look at the effort-return ratio. How much are brands investing in the experience? Is it resonating with customers? And how does that translate to the bottom line?

Fortune Business Insights predicts the customer experience market to be worth $32.53 billion by 2029, with a compound annual growth rate of 16.2% during that period. “Customer experience management solutions help enterprises to reduce their customer churn rates and improve their customer loyalty,” according to the firm, which is proof that digital and customer experience data matters. Its ability to inform decisions based on meaningful customer engagements captures not only the real potential for digital marketing but also illustrates optimism for the future.

Here are three ways digital experience analytics can help CMOs maximize marketing spend:

1. Focus on value.

With the rebalance on marketing budgets, there is less to spend on customer acquisition, which has become an astronomically high expenditure. With acquisition costs high and loyalty in saturated industries diminishing, budgetary focus is shifting toward higher-value strategies like improving experiences at scale and relationship nurturing to ensure customers build long-term loyalty with the brand.

Focusing on customer satisfaction and retention is clearly the way to maximize your return. When customers consistently have experiences they enjoy and find valuable, they’ll come back. Over time, that builds brand affinity that’s hard to break. According to Contentsquare web analysis data, 51% of traffic to websites in 2021 were repeat customers, proving that increasing repeat sales with existing customers is just as important as converting new ones.

2. Focus on experiential differentiation.

Customer experience (CX) analytics help executives refine the implementation, configuration and use of many digital technologies, especially when it comes to the digital experience. While A/B testing programs aren’t a new concept, the point of trial-and-error is to suss out winning components of a digital journey that can be applied to multiple campaigns.

On top of the data that comes from A/B testing, infusing voice of customer (VoC) technology can boost experiential differentiation by knitting together what customers say versus what they do. Another way this has been valuable is by informing recommendation engines. Digital experience analytics provide insight on ideal placements on product pages to ensure they’re not only seen but acted upon.

A great example of this is a globally recognized pizza brand we work with that ran a test over the course of four weeks around a deals page and very quickly discovered that, while they thought their promotions placement was obvious, it actually was not. To the company’s shock, customers were missing it altogether. After making important changes, the pizza brand drove $7.8 million annualized uplift in revenue through that single test.

3. Focus on operational efficiencies.

Nothing makes a CMO more frustrated than when a marketing team struggles to operate cohesively, seemingly reinventing processes and work instead of creating efficiencies through clear ownership, collaboration, management and reporting. Modern digital experience analytics (DXA) give digital marketers a full 360-degree view of engagement, including experiential, behavioral and technical performance insights. Analytics closely bridge the gap between the experience brands think they’re delivering and the ones that actually resonate with their customers.

With DXA, marketing teams can efficiently identify and prioritize tactical execution, and opportunities to boost digital marketing performance become clearer. Beyond the marketing team, informed decision clears a path for better cross-department collaboration, especially when DXA platforms and data are accessible and easy to interpret.

It’s important to note that data strategies are most effective when they are designed with intention. More data is not where the value is, insightful data is, and every company must look at discerning them. Powerful data visualizations allow organizations to break down barriers between departments, quickly aligning them on goals and strategies. It’s when that becomes a part of the collaborative DNA of an organization that data delivers the biggest business impact.

CMOs are under tremendous pressure to balance the expectations of their customers with the budgetary choices they are going to have to make for 2023. To best position their teams—and the business—for success, making those choices based on data-derived insights will crystallize ways to maximize ROI.

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