I got into the tech industry through sales in 2010. I was selling “the internet” over the phone to people that had their properties on sale in newspapers.
I was trying to convince them that they should list their properties on the internet, specifically this website I was working for, to gain more exposure and increase their chances of selling their properties for a better price.
No brainer, right? Well, for them, it was, since the audience was mostly made out of older people who were not “onboarded” into the gifts of the internet.
I knew nothing about what I was doing while grabbing the phone to cold-call people, but I knew that the internet was the future, and I was spending a lot of time on the phone with them, explaining to them what the internet could do for them.
This eventually got me fired because I wasn’t as focused on sales as much as I was on evangelizing the internet and its endless possibilities.
A lot has changed since 2010.
Heck, even I did. After more than a decade in sales and marketing, I am working as a digital analyst.
As a digital analyst, it is important to understand business principles and how they impact your work. In the past decade, the rise of smartphones and mobile devices, social media, and eCommerce has transformed how people access and use the internet, communicate and share information, and shop online. Tons of data from tons of sources.
These changes have also led to the development of new technologies and techniques, such as artificial intelligence and machine learning, which are used to analyze and make sense of large amounts of data.
However, many digital analysts do not get the opportunity to do much actual data analysis and instead focus on tasks such as tag implementation, migrations, and tech-stack optimization. These are amazing things to do (and hard for me sometimes), but many things can go wrong without the full context of your client’s or employer’s business.
To be truly impactful in their roles, digital analysts must deeply understand human behavior, the business landscape, and how their company or clients make money. This understanding will enable them to make informed decisions and have a real impact on their work.
Before I started writing this two (maybe three) part article, I asked Steen Rasmussen, what he thought about this topic, and he said:
The ideal role of analytics in relation to strategy is that of a GPS. The strategy defines the destination, analytics ensures we are going in the right direction and using the right resources.
And since we live in a world where the majority of the forces impacting the business, there is a constant need to adjust performance (crabbing) to arrive at the desired destination.
Analytics will, however, also support the goal strategy because it will help determine what destinations are possible with the available resources.Steen Rasmussen, Co-Founder, Director of Analysis, data and learning at IIH Nordic
The good part is that business principles and the main concepts behind how a business is structured to make money, the basics of marketing and going to market, and the basics of planning strategy are foundationally the same.
This article will define these foundations and uncover where the digital analyst fits in.
Table of contents:
- How is a business structured to make money?
- The 4Ps of Marketing
- Go-to-market strategy. The second GTM you must know about
- Business and Measurement Planning
- Strategic Planning
The word “business” comes from the old French word “businesse” which means “state of being busy.”
Even from the times of the ancient civilizations of Mesopotamia, Egypt, and Greece, we had trade and commerce systems. Evidence of business transactions dating back to 4000 BC has been found in the form of clay tablets and papyrus documents.
And in ancient Rome, the term “negotium,” which means “activity” or “employment,” was used to refer to business. I would know because Romania was a former colony, lol.
The rise of the modern corporation in the 18th and 19th centuries led to the development of more complex business models. The term “business” came to encompass various economic activities, including manufacturing, finance, and marketing. I suggest this as a read here.
Today, the concept of business encompasses a wide range of activities, from small, independent enterprises to large multinational corporations, and it is an integral part of the global economy.
Back in 2021, I took a Harvard Business School Online course called Disruptive Strategy. The late Clayton Christensen taught the course, and what I have learned in that course has completely changed the lenses I use to look at data, marketing, and growth in general.
And some of those things I will share with you throughout this article and other things I’ve learned in my career.
There are many things to wrap your head around when learning how business functions, but based on my experience, I will break it down to three main things that hold the rest under their umbrella.
- How is the business structured to make money?
- What are their internal and external processes that support that?
- What is the resource allocation to support those processes that support the business to make money?
Businesses function on profit formulas, internal and external processes, and resource allocation to generate profits and achieve their goals. Equally, businesses can make money in many different ways, and the specific strategies a business uses will depend on its industry, target market, and unique value proposition.
Let’s define these key terms that will help us unlock the rest of this read.
- A profit formula is a way of calculating the profitability of a business. It typically involves subtracting the costs of goods sold and operating expenses from the revenue generated by the business. The resulting number is the profit (or loss) of the business. Different businesses have different profit formulas depending on their industry, business model, and other factors.
- Besides the obvious meaning of a formula, the profit formula also refers to how that business is making money, which can be explained by how, what, and who they sell to, in what industry and market, and at what level.
- Internal processes refer to the systems, procedures, and processes a business uses to operate and achieve its goals. These include supply chain management, financial planning, and HR management.
- External processes refer to how a business interacts with its external environment, including customers, suppliers, etc. These processes can include things like marketing, sales, and customer service.
- Resources allocation refers to deciding how to allocate a business’s resources (such as time, money, and personnel) to achieve its goals. This can involve deciding which activities to invest in, which resources to allocate to different activities, and how to optimize the use of resources to maximize profitability.
But because having the definitions is not enough, let’s try to transform these four notions into a practical example: A retail business.
A retail business’s profit formula might involve calculating each product or category’s profit margin. This could involve subtracting the cost of goods sold (including the cost of purchasing the product from the supplier) from the sale price and then subtracting operating expenses (such as rent, utilities, and labor) from the resulting number.
Internal processes for them include inventory management, financial planning and budgeting, and HR management. For example, the business might have systems in place to track inventory levels, forecast demand, and place orders with suppliers to ensure that the right products are in stock at the right time.
External processes are marketing, sales, and customer service. The retailer might have a marketing plan to promote its products to potential customers and a sales and customer support team to help customers with purchases, complaints, or any issues they might have.
Also, they might have a community component where they build a bridge to ensure a direct relationship between themselves and their customers or potential customers.
When it comes to resource allocation, typically, the business would allocate the budget for marketing, allocate staff time between different tasks, and optimize the use of storage space and inventory. For example, the retailer might allocate a larger budget to marketing campaigns that are expected to be more effective or allocate more staff time to tasks that are expected to generate higher sales (Black Friday – Cyber Monday).
How does this fit with digital analytics and measurement
First, understanding a business’s profit formula can help digital analysts understand which metrics are most important to track to measure the business’s profitability. This can inform the implementation of tags and analytics tools and help to ensure that the data collected is relevant and useful for measuring the performance of the business.
If you get familiar with a business’s internal processes, you can use this knowledge to implement tracking and analytics systems that align with the business’s systems and procedures. Suppose the business has a robust inventory management system; you might implement tracking that allows the business to measure the performance of different inventory management strategies.
Also, understanding external business processes, such as marketing, sales, and customer service, helps implement tracking or choose analytics tools that support these processes.
The analytics/ measurement component that supports the optimization of resources is extremely important. For example, you could implement tracking that allows the business to measure the return on investment of different marketing campaigns or that allows the business to track the effectiveness of different inventory management strategies. But you need to know the why and the context for that, right?
But how do you get that context?
It’s important for the digital analyst to have a clear understanding of the business context and goals to ensure that the implementation of the tag management and analytics tool is effective and aligned with the needs of the business. This might involve working with business-focused team members or seeking out training or resources to help them understand the industry, market, and business goals. You don’t want to work in isolation.
You should work closely with business-focused team members, such as marketers, consultants, and account managers, to ensure that the implementation is aligned with the business goals. These team members can provide guidance on what data needs to be tracked and how the data will be used.
You could also collaborate with them to test and iterate the tag management and analytics tool implementation. This will help ensure that the tool effectively tracks the data most important to the business needs.
Depending on the industry and location of the business, specific regulatory or privacy considerations must be considered when implementing tags or choosing analytics tools. You must understand these considerations to ensure compliance and protect customers’ privacy.
But before you can work on collaborating better with people from different departments, I think it’s good to give you some competitive advantage by giving you a crash course on the main principles of marketing, product, and strategic planning and seeing where you fit in.
I wrote a guide for non-technical people to help them speak the same language as technical people, but now, I need to do the reverse. So this takes me to my next chapter. And I promise you, most of you already know more than you thought you did.
The 4Ps of marketing, also known as the marketing mix, is a framework for understanding the key elements of a marketing campaign. The 4Ps are product, price, promotion, and place.
This framework was proposed by E. Jerome McCarthy, an American marketing professor, in the 1960s. The concept has since become a widely accepted framework for understanding the key marketing elements and has been used by businesses and marketers worldwide.
Many people love to talk shit about this and come up with different reiterations of this framework that say the same shit repeatedly. We don’t need more Ps for the love of all that is sacred.
So, let’s break down the 4Ps.
- Product refers to the goods or services that a business is selling. It covers things such as the product’s design, features, and branding.
- Price is the cost of the product or service, as well as any discounts or promotions that are offered.
- Promotion encompasses all marketing activities that are used to communicate the value of the product or service to potential customers. It includes advertising, public relations, and social media marketing.
- Place means the channels through which the product or service is sold, such as physical stores, online marketplaces, and distribution networks.
Let’s try to explain these Ps using the same retailer example above.
A retailer might focus on developing a product line that meets the needs and preferences of its target market. Like selling avocado on toast in California or coliva in Romania.
Pricing strategies are meant to attract customers and drive sales. Let’s say that this retailer might offer special promotions or discounts to encourage customers to purchase or use price points to differentiate their products from those of their competitors. It’s no shame to play with pricing until you nail it. Pricing is an art form of its own.
Retailers will use (and over-use for my taste) many promotional tactics to communicate the value of their products to potential customers. This might include advertising campaigns, social media marketing, email marketing, or in-store events and promotions. See, this is coming close to home to what you might be implementing or helping with 😀
And, of course, we have – place. Retailers use various channels to sell their products, including physical stores, online marketplaces, and distribution networks. They might also consider the location of their stores, as well as the layout and design of their stores, to create a shopping experience that is appealing to their target market.
The 4Ps framework is very useful for businesses because they provide a structured approach to thinking about the various aspects of a marketing campaign and how they fit together. It gives clarity and helps with planning and strategy.
Suppose a business focuses solely on promotion without considering other aspects of the marketing mix, such as the product itself or the price. In that case, their efforts might not be as successful as those of a more holistic business.
The digital analyst’s role here is to support these efforts by implementing a measurement plan that makes sense for the business plans and their strategies.
While we can find tons of content on best practices to implement almost any tool these days, it’s not enough to be impactful and support your client or employer to succeed.
Again, you need the full context before you start “chopping.”
I won’t go deeper on the rabbit hole here with the 4PS, but if you want to learn more about this, I would suggest a better article that covers only this topic – Mark Ritson has a fab article on this topic I suggest you take a look at.
First is, of course, Google Tag Manager. We know and love it.
But there is another “GTM” you need to know about, and I promise it will unlock meaning for many things that happen inside a business.
“Go-to-market” (GTM) is how a company plans to introduce and sell its products and services to the market. And now that we covered the 4Ps, this will be very easy to break down.
It usually involves identifying and segmenting potential customers, developing marketing and sales materials, and implementing strategies to reach and sell to these customers. Companies will use a variety of channels, such as online marketing, direct sales, retail stores, or distributors, to do so. Normally, the person in charge of this part of an org is a Product Marketer.
Sure, there will also be people that think knowing things like these doesn’t matter. Many people will be stuck in their old ways, and the more time you spend in a comfort zone, the more narrow your views will become.
Knowledge is power, and knowledge will set you up for long-term success and help you differentiate in a market solely obsessed with tools and technology.
Where does digital analytics fit best with go-to-market strategies?
As mentioned, quite a few things are going into this process of “going to market,” and this is when you, the digital analyst, come in.
Market research means gathering and analyzing data about potential customers, competitors, and the market in general. Some common market research methods include surveys, focus groups, and secondary research (such as analyzing data from industry reports). Market research helps a business understand the needs and preferences of its target market and the competitive landscape.
This is the process of designing, prototyping, and testing a new product. It involves creating a product that meets the target market’s needs and can be produced and sold at a profit. During product development, a business uses data to identify customer needs, assess the product’s feasibility, and optimize the design for cost-effectiveness.
Dividing a market into smaller groups of consumers with similar needs or characteristics is market segmentation. By segmenting the market, a business can tailor its marketing efforts to specific groups of consumers and increase its chances of success.
Data can be used to identify key market segments and understand each segment’s characteristics and needs. The more active and engaged a segment is, the better the business will do.
This is the specific group of consumers a business is trying to reach with its marketing efforts. A business’s target market is defined by factors such as age, income, geographic location, and interests. Data can be used to understand the target market’s characteristics and needs and identify the most effective marketing channels and tactics.
As the marketer, I have to note that these attributes for a specific market are correlating factors, not causality factors. It’s a huge difference in terms of meaning and effectiveness when you are using correlation vs. causation in your marketing efforts.
Check out this podcast episode I recorded with Tim Wilson last year, where we cover this topic and more.
We already covered this above, and we know this covers the elements a business can control to influence the demand for its products or services: product, price, promotion, and place. Data can be used to understand the preferences and price sensitivities of the target market and identify the most effective promotional channels and tactics.
These are the ways in which a business gets its products or services to its customers. Distribution channels include retail stores, eCommerce websites, and distributors. Data can be used to understand the preferences and purchasing habits of the target market and assess the feasibility and cost-effectiveness of different distribution channels.
As you can see, data plays a key role in each of these steps, helping businesses to make informed decisions about their product development, marketing, and distribution strategies.
Businesses can better understand their target market and the competitive landscape by collecting and analyzing data. They can adjust their efforts to meet the needs and preferences of their customers. This takes me to the next step, measurement planning.
Developing a measurement plan and tracking strategy is important in bringing a product to market. It allows a business to track its progress and adjust as needed to achieve its goals.
And this is where you can come in as a digital analyst and how you can approach it having the business’ best interest at heart:
1. Define your goals. What are you trying to measure, and most importantly, WHY? It’s important to have clear, specific goals in mind when developing your measurement plan.
2. Identify the key performance indicators (KPIs) that will help every team track progress toward your goals.
3. Decide how you will collect and analyze data. There are many different ways to collect data, including surveys, focus groups, analytics tools, etc.
4. Choosing the most appropriate methods for the business and goals is important.
Once you have decided on your KPIs and data collection methods, you will need to set up systems for tracking and analyzing the data. This is the step where tools can come in 🙂
5. Create a plan for using the data to make impactful decisions. Plan for the outcome.
It’s not enough to collect and track data – you also need to use it build confidence in the decisions you and your team will make.
This might involve using data to identify trends, optimize marketing efforts, or make strategic decisions about product development.
Keep in mind:
Different businesses have different goals, and what might be a relevant KPI for one business might not be relevant for another.
For example, a business that is focused on increasing revenue might prioritize metrics such as sales and customer acquisition costs, while a business that is focused on improving customer satisfaction might prioritize metrics such as customer satisfaction scores or retention rates.
It is also important to consider the size and scale of the business and the specific needs of its target market.
A small business operating in a niche market might have different data needs and goals than a large corporation operating in a highly competitive market.
By considering these aspects you can develop a measurement plan and tracking strategy tailored to business’s specific needs and goals. This will make your work as a digital analyst have a real impact for your employer or client.
I asked Tim Ceuppens what he thinks about measurement planning, and he shared:
Instead of convincing someone of your story, it’s easier to plug it into theirs. Everyone already believes theirs to be true, and you can provide a different angle on how that’s the case. I’m not talking about cherry-picking data but finding where your data can add to their objectives. Even if it seems to contradict them at first.Tim Ceuppens – Digital Marketing Linchpin
One framework I love, and I have spoken about quite a lot, is called Q.I.A and I learned about it from Chris Mercer from MeasurementMarketing.io.
The QIA Model
The QIA model is a framework you can use to narrow down all possible metrics to grow only the ones your business needs to grow.
Start by asking these 3 questions:
- What question do I want to answer?
- What information do I need to answer this question?
- What action will I take when I answer my question?
This is an example of QIA in action.
While we are on the topic, try to measure with purpose and always towards the outcomes.
What are you trying to accomplish with your measurement plan to support the business you are working for or serving?
In the growth phase of a business, it’s important for the business to be able to distinguish between opportunities and threats to make informed decisions about how to pursue growth. Digital analysts can play a role in helping the business to do this by providing data and insights that can inform decision-making.
Here are some ways digital analysts can help a business distinguish between opportunities and threats in the growth phase:
- Use data and analytics tools to identify market trends and business trends. These trends help the business identify opportunities for growth and potential threats that need to be mitigated.
- Implement web analytics and social media monitoring tools to track competitors’ performance and identify potential threats or opportunities.
- Use customer data, such as demographics, purchasing habits, and feedback, to identify growth opportunities. For example, they might identify segments of the underserved customer base with high growth potential.
- Run A/B testing and user testing to experiment with different strategies and approaches and gather data on their effectiveness. This can help the business identify the best efforts to invest in to improve its products and services and how customers embrace them.
By actively participating and understanding how their employer or client “functions,” digital analysts will make an impact on helping the business “skate” where the money will be.
Clearly, companies competing in an integrated market face very different challenges from those competing in a fragmented market—the ball game changes fundamentally once components become modular and customers’ thoughts turn to speed or convenience rather than functionality. Sources of profitability change as well.Skate to Where the Money Will Be – Harvard Business Review
As a digital analyst or technical professional, you can use data-driven insights and analysis to help a business identify new opportunities for growth and adapt to changing industry conditions. You can work with other departments, such as marketing, sales, and product development, to gather insights and ideas and inform purposeful decisions. This can help the business build a strong intuition for “skating to where the profit will be” as the industry evolves.
Types of strategic planning
I wanted to share two types of strategic planning with you in this article. And I am talking about deliberate and emergent strategy. So let’s define them.
I have to again mention the Disruptive Strategy HBSO course I’ve taken 2 years ago, that completely changed my perspective on how to grow a business. If you can afford taking that course, I promise it’s the best money you have ever spent on self-growth.Disruptive Strategy course
Deliberate strategy refers to a planned and proactive approach to strategic planning. It involves setting long-term goals, developing a plan to achieve them, and implementing the plan in a systematic and controlled way. A deliberate strategy is typically based on a detailed analysis of the external environment and the internal resources and capabilities of the business.
On the other hand, emergent strategy refers to a more flexible and reactive approach to strategic planning. It involves being open to new opportunities, learning from experience, and adapting and changing course as needed. Emergent strategy is typically based on a more flexible and adaptive approach to decision-making and may involve trial and error, experimentation, and learning from mistakes.
Both deliberate and emergent strategies have their strengths and weaknesses. A deliberate strategy can be effective in helping a business to achieve its long-term goals and maintain control over its operations. Still, it can be inflexible and slow to adapt to changing circumstances. An emergent strategy can be more flexible and adaptable, but it can also be less predictable and may be more difficult to control.
In practice, many businesses use a combination of deliberate and emergent strategies, depending on the specific circumstances and goals of the business.
Let’s look at two examples of a retail business (yes, that is all I know) that employs each type of strategic planning.
Established eCommerce retailer selling footwear globally
- Deliberate Strategy
Their long terms goals could be expanding into new markets or introducing new product lines. To support this mission, they might conduct a detailed analysis of the external environment, including market trends, competition, and regulatory considerations, to develop a plan to achieve these goals.
- Emergent strategy
With an emergent strategy, the retailer might use data analytics to identify emerging customer needs or preferences trends and then use this information to adapt their product offerings or marketing strategies. Also, this can help them with unexpected challenges, such as changes in the market or supply chain disruptions, by adapting their operations and making quick decisions to minimize any negative impacts.
Ecommerce retailer just getting started in the same industry
- Deliberate strategy
Following a deliberate strategy, this retailer will set short-term goals, such as establishing a strong online presence and building a customer base. They would conduct an analysis of the external environment to understand the market and competition and develop a plan to achieve these goals.
- Emergent strategy
Like the established retailer, this upcoming one can use data to discover and identify emerging customer needs and preferences and adapt their products, offerings, and marketing strategies. Because they are just getting started, this would be easier and lighter than it would be for a bigger brand.
As you can see, both retailers can use either each strategic planning type or both; it all depends on the business context. Remember, context is queen and goddess with it comes to measurement.
Where do you come in as a digital analyst?
As a digital analyst, you can support both types of strategic planning by providing access and support with purposeful data collection and analysis that can help the business adapt to changing circumstances.
When you are building the measurement plan, make sure to collaborate with all stakeholders and teams; remember, each team has its own KPIs, and they measure progress differently. And nonetheless, the company’s needs and progress should be the centerpiece of your measurement plan. Not best practices.
After the measurement plan is in place, define the best implementation and tools to support the business’s direction by ensuring it’s flexible enough for all the changes happening in the industry and your team.
As strategies tend to change a lot, it’s important that the measurement plan and tools you choose are flexible and can also “skate” as the business does.
Understanding the structure of a business and how it generates revenue is essential for success in any role, including the digital analyst role.
We covered the 4Ps of marketing (product, price, promotion, and place). We discussed how they are important to take into account for any business looking to reach and sell to its target market effectively.
We also discussed the second GTM – Go to market strategy and how a strong go-to-market strategy is crucial for bringing a product or service to market and generating sales and where the digital analysts come in to support the business.
And lastly, we covered how measurement planning and strategic planning are important processes for helping a business achieve its goals and stay competitive in its market and that digital analysts can greatly support a business to skate where the profit will be next.
As a digital analyst, understanding these concepts and being able to apply them in your work can help you make a significant impact on the success of a business.