Everyone has their individual reasons as to why they measure their marketing efforts. The way I see it, we all fall into four categories: Justification of Budgets, Evaluation of Tools and Tactics, Insight into Customer Behavior, and Predicting and Projecting Results. Similar to Maslow’s Hierarchy of Needs, we need to satisfy the most basic reason before we can move up to the more complex reason, and no matter how high you have progressed, the levels below are still extremely important. I like to call it the Hierarchy of Analytical Needs.

Here is a quick look at each of the levels.

Justification of Budgets
The lowest level of Hierarchy of Analytical Needs can best be explained with the following scenario: The CFO of your company walks into your office to discuss the need for budget cuts. Are the thousands of dollars you are spending on a campaign really necessary and benefiting the company? At this point, having lots of numbers and charts showing increased web traffic and conversion rates would come in real handy to save your funding.

Evaluation of Tools and Tactics
Next up is using analytics to get a better understanding of what is working and what isn’t. Last year you invested a sizable portion of your budget on a certain media purchase and it is up for renewal. Should you purchase it again? The goal at this level is to collect data to help make these types of decisions easier.

Insight into Customer Behavior
As important as the lower levels are, metrics really start to provide value when they help you learn what your customers do in different marketing situations. Maybe they are always more willing to convert when you offer educational information or are more likely to click when your call to action is written in a blue font.
 
Predicting and Projecting Results
Once you understand customer behavior and the results generated by different tactics and media, you can begin to predict the results of future efforts. If your company has a particular sales goal, you know how many leads it will take to achieve it, and what kinds of marketing tactics you will need to get those leads. You will be able to confidently promise results and predict what will happen. And you will be able to present your case to management with the same level of credibility as manufacturing or accounting.

What level are you at?