MARKETING ANALYTICS Code: KMBMK05

COURSE OBJECTIVES

To understand the basic concepts of Marketing Analytics

To study various tools to have marketing insights in various marketing areas

 through empirical data To interpret the marketing data for effective marketing decision making

 To draw inferences from data in order to answer descriptive, predictive, and

 prescriptive questions relevant to marketing managers

CREDIT: 3 Teaching Hours: 36

Unit -1: Introduction to marketing Analytics (4 hrs.)

Meaning, characteristics, advantages and disadvantages of marketing analytics, Market data sources
(Primary and Secondary). The new realities of marketing decision making Market Sizing: Data sources,
Stakeholders, Applications & Approaches (Top-down and Bottom-up)

Unit-2: Pricing Analytics (9 hrs.)

Estimating Demand Curve: Estimating Linear and Power Demand Curves, Optimize Pricing, Incorporating
Complementary Products, Using Pricing subjectively to estimate Demand Curves, Pricing Multiple
Products, Price Bundling & Nonlinear Pricing: Pure Bundling & Mixed Bundling, Determine Optimal
Bundling Pricing, Profit Maximizing strategies using Nonlinear Pricing Strategies, Price Skimming & Sales

Unit-3: Customer Analytics (9 hrs.)

Segmentation and Targeting: The segmentation-targeting-positioning (STP) framework, Segmentation,

The concept of market segmentation, Managing the segmentation process, Deriving market segments
and describing the segments -Cluster analysis, Discriminant analysis, Targeting, The concept of product
positioning, Conducting a positioning study, Perceptual mapping using principal components analysis,
Incorporating preferences into perceptual maps. Customer Lifetime Value: Concept, Basic Customer
Value, Measuring Customer Lifetime value, Estimating Chance that customer is still active, Using
Customer Value to value a business

Unit-4: Retailing & Advertising Analysis (8 hrs.)

Market Basket analysis: Computing two way and three way lift Allocating Retail Space and Sales
Resources: Identifying the sales to marketing effort relationship & its modeling, optimizing sales effort
Advertising Analysis: Measuring the Effectiveness of Advertising, Optimizing advertising, Pay per Click
(PPC) Online Advertising
Unit-5: Sales Forecasting & Conjoint Analysis (6 hrs.)

Regression model to forecast sales, Modeling trend and seasonality; Ratio to moving average forecasting
method, Using S curves to Forecast Sales of a New Product Conjoint analysis: Conjoint analysis as a
decompositional preference model, Steps in conjoint analysis, Uses of conjoint analysis.

Course Outcome After successful completion of this course students will be able to

S. No. Course Outcome Bloom’s Taxonomy 1

CO1. Students will develop the skill in marketing analytics Apply (K3), Create (K6) 2

CO2. Students will be acquainted with better understanding of real life marketing data and its analysis
Evaluate (K5) 3

CO3.Students will develop analytical skill for effective market decision making in real life environment.
Analyze (K4), Create (K6)

Suggested Readings

1. Marketing Analytics: Data-Driven Techniques with Microsoft Excel by Wayne L Winston © 2014 Wiley
India Pvt. Ltd. ISBN 9788126548620

2. Marketing Analytics: Strategic Models and Metrics by Stephan Sorger© 2013 Create Space Publishing
ISBN 1481900307

3. Marketing Engineering and Analytics by Gary Lilen, ArvindRangaswamy,and Arnaud De Bruyn© 2017
Decision Pro, Inc. Skills Measuring tool Ability to understand and analyze markets with numbers and
analytic tools.

Assignments + Case study + Workshop Ability to understand real life marketing data and its analysis
Assignments + Case study + Workshop Ability to use analytical skill for effective market decision making
in real life environment

Case study + Workshop

Marketing Analytics

What it is and why it matters

Marketing analytics comprises the processes and technologies that

enable marketers to evaluate the success of their marketing
initiatives. This is accomplished by measuring performance (e.g.,
blogging versus social media versus channel communications).
Marketing analytics uses important business metrics, such as ROI,
marketing attribution and overall marketing effectiveness . In other words,
it tells you how your marketing programs are really performing.

Marketing analytics gathers data from across all marketing channels and consolidates it into a
common marketing view. From this common view, you can extract analytical results that can
provide invaluable assistance in driving your marketing efforts forward.

Why marketing analytics is important

Over the years, as businesses expanded into new marketing categories, new technologies were
adopted to support them. Because each new technology was typically deployed in isolation, the
result was a hodgepodge of disconnected data environments.

Consequently, marketers often make decisions based on data from individual channels (digital
marketing and website metrics, for example), not taking into account the entire marketing
picture. Social media data alone is not enough. Web analytics data alone is not enough. And
tools that look at just a snapshot in time for a single channel are woefully inadequate. Marketing
analytics, by contrast, considers all marketing efforts across all channels over a span of time –
which is essential for sound decision making and effective, efficient program execution.

What you can do with marketing analytics

With analytics, you can answer questions like these:

How are our marketing initiatives performing today? How about in the long run? What can we do
to improve them?

How do our marketing activities compare with our competitors’? Where are they spending their
time and money? Are they using channels that we aren’t using?

What should we do next? Are our marketing resources properly allocated? Are we devoting time
and money to the right channels? How should we prioritize our investments for next year?

Marketing Insights

Explore insights from marketing movers and shakers on a variety of timely topics.
Where do you stand?

Take our 10-minute assessment that will identify your organization's marketing strengths and
weaknesses in data management, analytics use, process integration and business
alignment. Click the button below.

Marketing Confidence Quotient

More on marketing analytics

Customer loyalty in a digital world: A new approach

Digital transformation: What it is and why it matters

Three steps to marketing analytics success

To reap the greatest rewards from marketing analytics, follow these three steps:

Use a balanced assortment of analytic techniques.

Assess your analytic capabilities, and fill in the gaps.

Act on what you learn.

Use a balanced assortment of analytic techniques

To get the most benefit from marketing analytics, you need an analytic assortment that is
balanced – that is, one that combines techniques for:

Reporting on the past. By using marketing analytics to report on the past, you can
answer such questions as: Which campaign elements generated the most revenue last quarter?
How did email campaign A perform against direct mail campaign B? How many leads did we
generate from blog post C versus social media campaign D?

Analyzing the present. Marketing analytics enables you to determine how your

marketing initiatives are performing right now by answering questions like: How are our
customers engaging with us? Which channels do our most profitable customers prefer? Who is
talking about our brand on social media sites, and what are they saying?

Predicting and/or influencing the future.  Marketing analytics can also deliver
data-driven predictions that you can use to influence the future by answering such questions as:
How can we turn short-term wins into loyalty and ongoing engagement? How will adding 10
more sales people in under-performing regions affect revenue? Which cities should we target
next using our current portfolio?

Assess your analytic capabilities, and fill in the gaps

Marketing organizations have access to a lot of different analytic capabilities in support of
various marketing goals, but if you’re like most, you probably don’t have all your bases covered.
Assessing your current analytic capabilities is a good next step. After all, it’s important to know
where you stand along the analytic spectrum, so you can identify where the gaps are and start
developing a strategy for filling them in.

For example, a marketing organization may already be collecting data from online and POS
transactions, but what about all the unstructured information from social media sources or call-
center logs? Such sources are a gold mine of information, and the technology for converting
unstructured data into actual insights that marketers can use exists today. As such, a marketing
organization may choose to plan and budget for adding analytic capabilities that can fill that
particular gap. Of course, if you’re not quite sure where to start, well, that’s easy. Start where
your needs are greatest, and fill in the gaps over time as new needs arise.

Act on what you learn

There is absolutely no real value in all the information marketing analytics can give you
– unless you act on it. In a constant process of testing and learning, marketing analytics
enables you to improve your overall marketing program performance by, for example:

Identifying channel deficiencies.

Adjusting strategies and tactics as needed.

Optimizing processes.

Gaining customer insight.
Without the ability to test and evaluate the success of your marketing programs, you would have
no idea what was working and what wasn’t, when or if things needed to change, or how. By the
same token, if you use marketing analytics to evaluate success, but you do nothing with that
insight, then what is the point?

Applied holistically, marketing analytics allows for better, more successful marketing by enabling
you to close the loop as it relates to your marketing efforts and investments. For example,
marketing analytics can lead to better supply and demand planning, price
optimization, as well as robust lead nurturing and management, all of which leads to more
revenue and greater profitability. By more effectively managing leads and being able to tie those
leads to sales – which is known as closed-loop marketing analytics – you can see which specific
marketing initiatives are contributing to your bottom line.  

Meaning of Marketing analytics 

Marketing analytics is the practice of measuring, managing and
analyzing marketing performance to maximize its effectiveness and optimize return on
investment (ROI). Understanding marketing analytics allows marketers to be more efficient at
their jobs and minimize wasted web marketing dollars

Marketing Analytics: Definition, Importance & Tools

When you run a marketing campaign, its performance can be tracked via Marketing Analytics.

It is only because of marketing that a business can actually proceed with its main operations i.e.
lead generations, conversions, sales and profits.

As per a report of Convince and Convert, around 44% of CMOs say they prefer measuring
ROI via analytics.

So, with marketing being so important to facilitate the operations of the business, it becomes all
the way important to evaluate the marketing performance and Marketing Analytics empowers
you to do this adeptly.

What is Marketing Analytics?

The answer to the question of what is marketing analytics is simply the measuring, managing
and analyzing the marketing performance. The concept of marketing analytics facilitates not
only to improve the effectiveness but also allows the marketers to take a successful shot at
optimizing the return on investment.

Marketing analytics portrays the customer insights and trends.

It is shocking to see that most of the organizations tend to ignore the concept and importance
of marketing analytics. It is surely a great way to obtain a picture of as to how the marketing
efforts are deriving revenue.

The importance of marketing analytics is not only depicted from the fact that it provides a clear
picture about the marketing efforts, but also from the fact that it also allows you to monitor
campaigns that can easily facilitate the saving of resources.
The below-mentioned points efficiently portray a picture as to why marketing analytics is the
need of the hour for every business no matter what the field is:

Why Marketing Analytics is Important?

(i) Understanding the customer and market trends is really important in today’s time. Marketing
analytics easily allows understanding of big picture trends that too by focusing on every single
detail.

(ii) With the aid of providing you with a clear picture of the efforts and the returns, it allows you
to easily depict that which programs worked and also depicts the reasons why it failed or even
succeeded.

(iii) The market study is also an important part of the business. Marketing analytics allow
monitoring of trends over time.

(iv) Marketing analytics allows understanding the return on investment by providing a clear
picture of the working and the reports of each programme.

(v) By easily helping to study the market trends, marketing analytics facilitates to proficiently
forecast future results.

Turning to search marketing, keywords also allow understanding what even the mindset of the
customers is. Analytics help you find the keywords that can easily be used to optimize business
processes by –

(i) Customer surveys — One can easily infer the relative priorities of competing interests by the
examination of keyword frequency data

(ii) Industry trends — It becomes really easy to understand and predict trends in customer
behavior

(iii) Product design — It is vital to understand what are the solutions that a customer is looking
for. Keywords can easily facilitate the understanding of what the customer actually wants

The main questions that strike the mind of the marketers after evaluating and understanding the
importance of marketing analytics, is where to start and how to work proficiently with marketing
analytics tools.

With the easy availability of search engines, search engine optimization, paid search marketing it
has become easy to implement the concept of marketing analytics.
There are many Marketing Analytics tools that are available for the marketers to easily use for
their aid. Below are some of the most famous tools that can be effectively used for the concept
of marketing analytics-

Marketing Analytics Tools

EVENT-BASED TOOLS

This is one of the effective tools of marketing, also known as click analysis.

This tool mainly focuses on the things that matter the most to the business, like shopping cart
matters to an e-commerce website. This tool helps to track the actions of individual users within
an app, website.

The main and best tools of marketing analytics mostly have broad-ranging capabilities.

The marketers can also integrate more offers with the aid of tracking more devices and
channels.

Some of the tools that facilitate the collection of marketing data are website analytics tools, app
analytics tools, marketing automation, and data platforms.

Some of the best event based marketing analytics tools are-

1. Mix Panel

What do you expect from a top quality marketing analytics tool? It should focus primarily on
tracking different events related to you on your website and mobile app, yes you heard it right,
it can very well track the events on the mobile app as well.

You just feed in the details about what you want to track and MixPanel will handle the rest on its
own. Though MixPanel was originally created for Product managers, it has so much for
marketers as well. The base package starts from $99 per month and you can enhance it
accordingly.

2. Heap Analytics

This is a newcomer in the field of marketing analytics but you won’t be able to complain about
its performance. The working of this platform is much similar to that of MixPanel and can
automatically track actions on your website and your app.
You can manually set the preference and Heap Analytics will accordingly manage the rest.
Funnels can also be created by using Heap Analytics. You can further view the analysis report
and work accordingly on your website or app and enhance your marketing campaign.

3. Oribi

When it comes to simplicity Oribi excels its competitors and provide its users with the easy user-
interface. The main focus of this tool is on faster data-driven decisions.

One of the best features of this tool is that it will automatically track the data on your website
and there is no need to manually set everything. Even a small change in your website will be
tracked by Oribi and it will highlight it in the dashboard. You can choose the subscription plan of
$79 per month or $799 per year.

4. KisMetrics

KissMetrics ranks among the toppers in the list of marketing analytics tools and it deserves that
as well. It has been designed to track the activity on your website and you can further use its
analysis report to enhance the user’s engagement and improve your business.

It will also let you know about what impact will your changes in the website will cause hence you
can tweak that at the same time to enhance the results.

TESTING TOOLS

This tool allows the marketers to test multiple variants of a feature or a message.

Testing is considered an important part of product development as it helps to collect real data.
No marketer would fancy the idea of working on the basis of assumed data no matter how
strong the gut feeling may be.

These tools even facilitate contact with users using channels like emails, push notifications, in-
app notifications, and even web-hook. Some of the AB testing tools for you here are-

1. Optimizely

It is best used to test different variations of any page or any element related to your website.
You can further decide which variation is going to suit your requirement depending upon the
analysis report of optimizely.

You can lead experiments on your website and test which is the best variation for your
marketing goals.
2. VWO

Visual Website Optimizer or VWO works in a similar fashion as Optimizely. It can also provide
you with the best results about different variations on your website and you can then analyze
which variation suits your marketing goals.

One of the best features of this tool is that it offers a visual editor hence you can create visual
changes and test them accordingly to pick the best one for you.

VISUAL BEHAVIOR TOOLS

 Such tools allow outlining that how much time the user spends at looking at the screen and
what he actually looks on to.

The basic aid that helps in the collection of the data is cursor movement as a proxy. These tools
also help the users to segment the data and find that how down the user actually scrolled too.

Marketers can use the data to proficiently rearrange their interfaces and successfully bring a
positive change in their services. Best Marketing Analytics tools in this category are-

1. Hotjar

Hotjar offers many analytics features that you can use to enhance your overall marketing
campaign and eventually improve your business. The main features of it are – Feedback polls,
conversion funnel analysis, surveys and registration form analysis.

It provides you with a heat map which can be used to track how visitors are interacting with your
website and what actions do they take on it.

2. Crazyegg

Just like Hotjar, crazyegg also offers a heatmap through which you can understand the
performance of your website. It will let you know what actions people are taking on your
website, how they scroll, where do they click and so on.

Their analysis report is so rich in terms of information that you can optimize your website in the
best ways to enhance the user’s engagement and get better conversions as well.

DIGITAL MARKETING ANALYTICS

These tools collect data from the aid of marketing and advertising channels. These tools can be
easily grouped into five categories

Search Engine Optimization tools help to understand how likely the website is to show up on
the search results.
Social media platforms offer free analytics that allows marketers to understand how users react
to their profile and online appearance.

Search Engine marketing tools allow marketers to improve their ad performance to gain an edge
over the competitors for better performance and outcomes.

Display ad platforms allow marketers to help marketers improve their success rates.

Predictive-scoring model platforms allow marketers to score users or prospects primarily on the
basis of likelihood to buy or renew.

Some of the tools for these purposes are-

(i) Google Search Console

(ii) MozPro

(iii) SEMrush

(iv) Google Analytics

MARKETING DASHBOARD TOOLS

These are mainly related to the unification of data.

The consolidating of analytics is always considered to be a good idea. It easily saved time and
efforts caused due to duplicity and even being bogged down. This allows the marketers to
manipulate data quickly due to one consolidated dashboard and answer the queries easily.

These tools are a hit among the people who love the simplicity and avoid ad hoc systems due to
complexity. Dashboards even allow to automatically refresh data which is evidently missing in
use of excel sheets. Top rated dashboard tools are-

1. Cyf

You can view the data from different marketing tools on a single dashboard of Cyfe. Tracking
data from different social media platform is a cakewalk while you are using Cyfe. It is a great
tool for marketers who want to see different variations of results on a single dashboard.

2. Klipfoli

Here you can build your own dashboard and it will provide you with all the marketing analysis
data that you need. You can manually put the data from different tools on its dashboard and it
will show you accordingly.
Some of the major tips that should be the point of focus when using marketing analytics tools
are listed below-

Top Tips for doing Marketing Analytics like a Pro

(i) Repeat Ad Nauseum — To ensure your advertisement displays for applicable searches, the
use of negative keywords can help to a great extent. The use of negative keywords is
recommended by almost most of the profession or even the newbie marketers keeping in
context how advantageous this technique can actually be.

(ii) Results and analysis — It should be a common practice to display keywords in ad text
which portrays that the ad is relevant to the search. An ad which is solely related to the search
surely gets more clicks and is obviously great for the website and even the business.

(iii) Implementing natural search — The habit of inculcating the best keywords into your
website increased the chances of clicks more than even a paid advertisement. This surely
facilitates the generating of new content.

(iv) Keyword research — It is important to know how to do keyword research as the aid of

stagnant keywords can affect the online appearance as it neglects the information and even the
trends on new products.

(v) Using paid search marketing — Taking the aid of paid search marketing, lowers the bid
and also improves the ad position. Having said that, it does not mean that you should only rely
on paid marketing but yes you can’t choose to ignore its importance. This can easily be one of
the proficient marketing analytics examples.

(vi) Messing with the data — It should always be kept in view that the reports and information
which is gathered from the search marketing provides aids in all aspects of the business and
even the offline revenue and primarily the product development. You should always provide
proper attention to the implementation of search efforts.

Paid Campaigns & Marketing Analytics

The improvement of marketing strategy of PPC advertising campaigns can be easily done
through the aid of the AdWords campaign.

It is only the strength of this campaign that facilitates and portrays that how well the ranking is
in the search engine. The fact that your site would never be seen by prospective clients without
a decent ranking should always be kept in context.

It offers expert analysis on to the site and obviously the performance of the efforts that the
marketers put in. Let us have a look on some of the marketing analytics examples to understand
the concept in more comprehensive manner-

Marketing Analytics Examples

AMAZON FRESH AND WHOLE FOODS

This campaign is one of the best Marketing Analytics Examples that showcase how analytical
data helped Amazon gauge how customers purchase groceries. It also updated the company
about how suppliers would do their interaction with the grocer.

NETFLIX USE OF MARKETING ANALYTICS FOR TARGET ADVERTS

Netflix used the analytics data to find out specific inclinations of their audiences. Accordingly,
company sent emails to their subscribers about the programs that would be best fit for them.
These marketing analytics examples facilitate the smooth operation of an online marketing
campaign. Online marketing campaign depicts how the online appearance of your site is and
that is solely responsible for how your website fares among the users.

IN CONCLUSION…

The advantages depicted above for a great conclusion about how fine the concept of marketing
analytics actually is. This concept of analytics always helps marketers to a great extent to review
the performance of their campaigns and obtain reports. These reports directly provide aid in the
representation of the data accordingly.

The analysis helps in the formulation of the strategies in such an order that it ensures proper
returns with minimum efforts. Now, who wouldn’t want a strategy or a programme that allows
the marketers to put minimum efforts and also obtain desired maximum returns?

Hopefully, you must have got your answer to what is Marketing Analytics. Good luck with your
stint with marketing analytics and seeing it do wonders for your business!

Want to learn and master marketing analytics? Then Web Analytics Course would be the right
pick for understanding the concepts in a practical manner.

In case of any doubts about the concepts associated with Marketing Analytics, feel free to write
us in the comments.

Advantages of Marketing Analytics

More choices, price points, and purchasing modes exist today than ever. Some would say we’re living in
the consumer golden age. As such, companies across industries battle it out for the right to attract new
customers and turn existing ones into lifetime advocates.

Companies will need the best in marketing analytics software to get there though. Learn more
about Thought Spot below.

Granular Segmentation
Marketing departments depend on the right segmenting to deliver impactful messaging and relevant
communications to leads and customers. After all, one email that targets males aged 20–55 probably
won’t incite as much engagement compared to a message targeting a smaller age bracket, an audience
with a shared interest or audience with similar spending activity.

But there’s a reason many marketing analytics teams don’t go as granular as they’d like in their
communications. It’s because they don’t have access to marketing analytics dashboards that instantly
group customers based on different metrics.
For example, a marketing assistant could search ThoughtSpot for customers that have purchased six or
more times this year in the Southwest region to gather contacts for an upcoming joint promotion with a
business chain in the area.

Tailored Messaging
Effective marketing has always been about persuasion. But instead of trying to persuade the masses,
marketing today is about delivering personalized messaging and offers to both customers and potential
customers alike.

Send something irrelevant to a lead and they’ll disregard the message and probably your business along
with it. Do the same thing to an active guest and they’ll think you’re not paying close enough attention,
damaging your rapport.

Marketing analytics tools can also play an integral role in the timing of communications and the mode
through which they’re sent. This gives businesses the best chance of reaching customers in a good state of
mind.

Multi-Channel Customer View

The more a marketing department interacts with leads and customers, the better understanding they have
of their audience base. This is especially helpful in our digital age because, just like the preference of
communication medium, consumers tend to spend time in different places.

Tracking customer behavior, including engagement and buying activity across channels, gives marketing
a comprehensive understanding of how to interact with a customer. This includes what kinds of
communications they respond best and worst toward, as well as strategies that can increase their lifetime
value.

Marketing Analytics with Thought Spot

Leveraging a marketing data analytics tool offers knowledge at scale for an entire marketing department
and beyond. Platforms like Thought Spot allow marketing teams to better segment audiences, deliver
tailored messaging and gain a complete view of customers across channels.

But these things are just the start with marketing analytics software like ThoughtSpot.

Schedule a personalized 1:1 demo today to learn how relational search, AI-powered insights,
and engaging visualizations can revolutionize your marketing department.

The Disadvantages of Marketing Analysis

by BILL WEST
The Fournaise Marketing Group conducted a survey in 2011 that revealed that 70 percent of
CEOs endlessly produce marketing data that means little for their companies. It also revealed
that 72 percent of CEOs think marketers ask for a lot of money but cannot explain how the
marketing investment will benefit the business. Although a market analysis can help you
formulate an effective marketing campaign, it has several disadvantages.

Unguaranteed Success

A market analysis does not guarantee an accurate diagnosis of a market. It merely analyzes a
fragment of the market covered in the research, which would not be a fair representation of the
whole market. It may not also be possible to have a single market analysis covering all the
parameters in the market such as price, demand and consumer preferences.

Data Misinterpretation

Data misinterpretation from a market analysis can be detrimental to your marketing campaign. It
can lead to wrong marketing decisions or create unrealistic financial projections. Therefore,
before making decisions based on the information gathered from a market analysis, you should
seek the advice of a professional market analyst. The analyst can identify any pitfalls and help
you avoid an inept marketing strategy based on a flawed analysis.

Inappropriate Data Collection Methods

Inappropriate data collection methods can lead to inaccurate information. For example, using
questionnaires to retrieve data can be unfruitful when you construct questions in the wrong way.
The structure of the questions can influence the response from the respondents, which would
make the market analysis invalid. Poor data collection also occurs when using interviews if an
interviewer is biased. A respondent’s perception of the interviewer can also affect his responses
toward the questions.

Huge Expenses

Market analysis is financially taxing because it involves expenses such as data collection,
processing and hiring of market analysis experts or research agencies. Such costs can be
discouraging and unnecessary. A small business may not have adequate resources to hire
experts and conduct a comprehensive market survey. Therefore, small firms may opt to use
secondary data, which is not customized to their marketing needs.

5 Must-Have Data Sources to Improve Your Marketing Team’s Efficiencies

AUGUST 9, 2018 CHANELL ALEXANDER

While creativity is a significant component of a marketer’s profession, the skill of utilizing data is
just as important. Data gives you insight into your audience. In turn, it allows you to use
creativity in your approach to adequately reach your target group. According to the below stats,
having access to the right data is pivotal to success: 

- 42% of B2B marketing professionals state that a lack of quality data is their most significant
barrier to lead generation.

- 24% of marketers don't know whether their efforts resulted in closed-won deals.

- Only 16.3% of marketers use marketing analytics to inform multi-channel marketing

To be successful in developing marketing strategies that strike a chord with your target
audience, you have to introduce your team to data sources that will help them make well-
informed and strategic decisions. Read on for five must-have data sources that can increase the
efficiency of your marketing team. 

Web Analytics 

One of the best ways to determine how customers are interacting with your brand is by
monitoring their engagements with the company webpage. Web analytics allow you to
understand the content that is resonating with customers, mediums that are bringing them to the
site, and the exact pages they are visiting while they are there. Web analytics can inform any
digital marketing strategy, especially when it comes to creating content. 

Census Data 

Creating personas based on demographic and location information is essential to any marketing
strategy. Having access to U.S. Census Data enables marketing teams to analyze who
their target market is, and the external factors that could contribute to who these people are.
Teams can use sample data to define who their ideal customer should be, and can also
combine location data with demographic information to zero in on where they should put their
efforts. Go even further by combining this data with that from your customer relationship
management (CRM) solution to understand how your current customer set compares with the
nation. To do this well, make sure your CRM can import census data or that you can export
customer data sets to a BI tool to manipulate. Need suggestions? Find a recommendations for a
flexible CRM here.

Keyword Trends

Mastering SEO is crucial to getting your company’s web material in front of your target
audience. To do this correctly, it makes sense to take a look at keyword trend data to find out
which keywords your website can rank for. Programs like Google Trends and Moz can provide
vital insights into related keywords that are popular among your target audience. It keeps
marketers from flying blind when they create a new blog post or website copy. 

Social Media Analytics 

Are you posting information at the right times? When is your target audience the most active on
a particular platform? How often should you post? Taking a look at social media analytics can
help your team create an effective and well-informed social media marketing strategy. To gain
even more detailed insights, it makes sense to connect this data with web analytics to see which
social media platforms are attracting the most attention to your web content. 

Business Statistics

While micro-level stats are vital, it does not hurt to take a macro approach to market research.
You might be rolling out a new product, but economic and employment conditions could make
you narrow your target or alter your research. Data from the Small Business
Administration website provides valuable insight into the current state of the economy,
population trends, and small business conditions. 

Pro Tip: Market Share pages from Datanyze is another great source for market research.
There you'll find accurate and up-to-date information & insights into industry trends, rising
technologies, and key competitors. 

Final Thoughts 

Data is one of the most valuable resources a marketer has at their disposal. It is challenging to
move forward with any marketing strategy without insight into your audience. Having access to
the right sources of data enables you and your marketing team to compose content, intelligently
conduct product rollouts, produce email marketing campaigns, market events, and broadcast
offerings that your audience will respond to. Any savvy marketer knows that data is their friend,
and having access to the correct sources will take any marketing strategy to new heights. 

USING MARKETING ANALYTICS & MARKET RESEARCH TOGETHER

Sep 20, 2018

Marketing analytics is set to grow tremendously over the next five years. Why such growth?
Marketing analytics has a critical impact on a marketing organization’s activities, but also on a
brand’s overall understanding of their entire company’s success. Market research has a similar
impact.

From focus groups to mix modeling to big data, the methodologies can vary drastically in style,
execution, and results when it comes to both market research and marketing analytics. But the
objectives of these exercises remain pretty universal: gather accurate data, analyze it for
insights, and turn those consumer insights into better business decisions.

Market Research vs. Marketing Analytics

Many of us already know that market research is the process of gathering information in order to
answer strategic business questions. Such information could include everything from consumer
segmentations to reactions to stimulus to purchasing behavior. Often this research is done
through the use of statistical methods or practices that collect and analyze data to make
inferences about something. Of course, in today’s digital landscape market research has
evolved to encompass far more, such as behavioral targeting insights and social media
listening.

Marketing analytics is a result of the technology and influx of data we use as marketers. Early
on marketing analytics was a relatively simple concept. It encompassed the process of
evaluating marketing efforts from multiple data sources, processes, or technology to understand
the effectiveness of marketing activities from a big-picture view—often through the use of
metrics. Marketing analysts’ objectives can be an endless list of how to understand or increase
ROI, monitor trends over time, determine campaign effectiveness, forecast future results, and
so on.

Market analytics has now come to mean the information captured by all the relevant online data
that has been gathered and integrated into a consumer’s profile, like purchase history and
contact information. And it is this valuable addition to customer knowledge that drives our
reasoning for coupling it with market research.

Leveraging the Two Together

Together, market research and marketing analytics drive an industry that’s changing the way we
work and the type of work we do. The reason why is, together, both not only measure the
impact of marketing efforts on our consumers, but the varying impact of a variety of efforts from
product to sales. That’s not to say that either of the two cannot function on their own. Maybe a
company prefers the intimacy of qualitative studies, or perhaps they only have the budget for
mining social data.

But thinking of both disciplines on different playing fields only limits their potential.
Market research and market analytics should be wielded as a two-pronged weapon to
build an even more comprehensive view of the consumer, ensuring you are delivering
the right messages to the right consumer at the right time.

For example, instead of focusing on the differences between market research and market
analytics, it makes a lot more sense to think of them as two separate phases of consumer
investigation. Market research is a form of primary research, taken from the source and
providing firsthand evidence; market analytics is a form of secondary research, a summary of
descriptive documentation and synthesis of data drawn from a number of sources.

When the two are leveraged together, their advantages amplify each other. While market
research captures what your consumers want you to hear by verbalizing an experience or telling
you why, market analytics offers the online behavior and patterns that consumers might not
think to share, and keeps it all in a consolidated database. You can use the two together to
validate that your online data matches your offline data; that is, your analytics reflects your
research, and vice versa.

We challenge brands to use marketing research as a tool to push their marketing analytics from
just learning about metrics to actually understanding customers in the context of their
consumers. To learn more about combining marketing analytics specific to big data with survey
data, download the report below. You’ll see an example deliverable of what combining these
two disciplines provides.

Primary Data vs. Secondary Data: Market Research Methods

by Alison Wolf, on May 5, 2016

There are more data sources than ever. Just googling a search term may not be sufficient, as
the googled data may be inaccurate and/or biased. You want to avoid making important
business decisions based on unreliable data. So which data sources should you use?
We’re here to help you navigate them all. Read on for a quick breakdown of secondary and
primary data and tips for finding valuable insights for your market research needs.

At the highest level, market research data can be categorized into secondary and primary types.

What Is Secondary Data?

Secondary data is public information that has been collected by others. It is typically free or
inexpensive to obtain and can act as a strong foundation to any research project — provided
you know where to find it and how to judge its worth and relevance.

Secondary Data Examples

Sources of secondary data include (but are not limited to):

Government statistics are widely available and easily accessed online, and can provide
insights related to product shipments, trade activity, business formation, patents, pricing and
economic trends, among other topics. However, data is often not presented explicitly for the
subject you are interested in, so it can take some manipulation and cross-checking of the data
to get it as narrowly focused as you’d like.

Industry associations typically have websites full of useful information — an overview of

the industry and its history, a list of participating companies, press releases about product and
company news, technical resources, and reports about industry trends. Some information may
be accessible to members only (such as member directories or market research), but industry
associations are a great place to look when starting to learn about a new industry or when
looking for information an industry insider would have.

Trade publications, such as periodicals and news articles, most of which make their
content available online, are an excellent source of in-depth product, industry and competitor
data related to specific industries. Oftentimes, news articles include insights obtained directly
from executives at leading companies about new technologies, industry trends and future plans.

Company websites can be virtual goldmines of information. Public companies will have

investor relations sections full of annual reports, regulatory findings and investor presentations
that can provide insights into both the individual company’s performance and that of the industry
at large. Public and private companies’ websites will typically provide detail around product
offerings, industries served, geographic presence, organizational structure, sales methods
(distribution or direct), customer relationships and innovations.

Published market research reports are another possible resource, as anyone who’s

ever googled the name of the industry they’re interested in and “market research” can tell you.
For a fee, they can provide a great overview of an industry, including quantitative data you might
not find elsewhere related to market size, growth rates and industry participant market share.
The downside is that you might not be interested in an overview — you might be interested in a
niche, and that niche is only discussed on three of the report’s 300 pages. 

With all these sources of secondary data, you should be all set, right? Well, maybe not. If you
are interested in a niche product or a new technology, there may not be a lot out there in the
public sphere. The most current information you can find might be a few years old. You might
not be sure if the material you found online reflects an accurate portrayal of the whole industry.
You might be asking a question no one’s ever asked before, let alone answered. Now what?
What Is Primary Data?

Now it’s time for primary data, new information collected specifically for your purposes, directly
from people in the know. Methods of primary data collection vary based upon the goals of the
research, as well as the type and depth of information being sought.

Primary Data Examples

In-depth interviews present the opportunity to gather detailed insights from leading

industry participants about their business, competitors and the greater industry. When you
approach a company contact from a position of knowledge — thanks to all that secondary data
you’ve already collected — you can have a free-flowing conversation about the topics of
interest. You can guide the conversation toward your research objectives, but also allow
yourself to be led down unexpected paths by interviewees — some of the most valuable insights
are the ones you didn’t know you should be looking for.

If you’re seeking data you can quantify, surveys are an excellent way to collect a large
amount of information from a given population. Surveys can be used to describe a population in
terms of who they are, what they do, what they like and if they’re happy. You can then forecast
the population’s future behavior in light of these identified characteristics, behavior, preferences
and satisfaction. Surveys yield the most meaningful data when they ask the right questions of
the right people in the right way, so care should be taken both to develop survey questions
respondents will find relevant and interesting, and to determine which method of conducting the
survey (online, telephone or in-person) is most appropriate.

Looking to get consumers’ thoughts on a new product or service offering idea when you’re in the
early stages of the development process? A focus group can get a small group of people
that fit your target demographic in a room to discuss what they like, dislike, are confused by,
would do differently — whatever. The group’s leader encourages honest, open discussion
among participants, collecting opinions that can further direct your development efforts.

Prefer to eavesdrop rather than ask questions outright? Social media monitoring can

help you keeps tabs on candid conversations about your industry, your company and your
competitors. How much are people talking about your brand compared to competitive brands?
Is what they’re saying positive or negative? Is the public clamoring for something the industry
currently doesn’t provide? How are your competitors portraying themselves via social media,
and what does that say about their strategy? Social media monitoring shows that you don’t
always need to participate in the conversation to learn from it.

Sources of Marketing Research: (A) Internal, (B) External Sources of Marketing

Research

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There are two sources of information from where data for marketing research can be obtained.

(A) Internal Sources:

These refer to the sources of information within the organisation. In certain cases internal
sources are indispensable without which the researcher cannot obtain desired results. Internal
sources include accounting information (Trading Profit & Loss A/c and Balance Sheets of
different years), salesmen’s reports, statistics in relation to advertisement expenditure,
transportation costs etc. Information from internal sources is easily available and no financial
burden is involved in gathering the information.

(B) External Sources:

In order to study marketing problems in detail the need of external sources of marketing
research arises. External sources are of immense importance and utility in case where research
needs detailed and thorough investigation. External sources data can be divided with two
categories (a) Primary data (b) Secondary data.

Primary Data:

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This refers to the information collected by the researcher from original sources. It is not a
published data; it has to be gathered by the researcher himself by tapping various resources.
Primary data is usually collected for specific purposes.

The main sources from where primary data can be obtained are (a) Salesmen (b) Dealers; (c)
Consumers etc. It is a very slow process of collecting data and involves huge costs. But results
obtained from this data are original and tend to be more accurate and reliable.

These sources are explained below:

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(a) Salesmen:

Salesmen are the most important source of providing first hand information. They are
appointed by the owners for the sale and promotion of its products. They have a direct link with
the consumers understand tastes, preferences and buying habits of the consumers.

They can also know about the dealer’s reaction (especially of retailers) towards the firm’s
products by taking into consideration price, design, packaging and size etc. of the product. The
marketing manager may direct the salesmen to prepare periodical reports containing the
information collected by them.
The information collected in this manner is original and more meaningful. This will further
enhance the morale of salesmen as they feel that they are contributing towards the formulation
of marketing policies of the organisation.

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But sometimes information provided by salesmen is not accurate and upto the mark. The
salesmen are not properly trained and do not know the methodology to collect the information
properly.

(b) Dealers:

This is another source of collecting primary data. Valuable information can be collected with
regard to demand of the product from retailers. Information about the marketing policies of
competitors can also be gathered from the dealers.

It has been observed that sometimes this method does not prove to be fruitful as dealers do not
keep proper records and they do not want to waste their time in supplying information.

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(c) Consumers:

This source of collecting primary data is of great importance. Representative samples of

consumers may be selected for conducting thorough investigation with regard to price, quality
and use of the product. This method of collection data is very reliable as it establishes direct link
between producer and the consumer.

Secondary Data:

Secondary data is already existing which has been collected and published by some individuals
or institutions. This data is available at a very low cost and it requires lesser time to collect it.

The main sources of secondary data are:

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(a) Periodicals and Newspapers:

Business magazines and journals published periodically contain data which is very useful for
marketing research; Newspapers such as Economic Times and Financial Express also contain
data regarding business trends and market reports. Important trade journals are Industrial
Times, Commerce, Capital, Market, Indian Finance, Business India, Business World and others.

(b) Govt. Publications and Reports:

There are innumerable publications brought by Central and State Govts, which contain valuable
data for conducting marketing research. Census reports of the Government of India,
Publications of Planning Commission; periodical publication such as Indian Review, various
markets bulletins.
Reserve Bank of India bulletin, publication of the Statistical Departments of various State
Govts., supply valuable information extensively used in marketing research.

(c) Trade Associations:

Various trade associations like Chambers of Commerce, Export Promotion Council etc, publish
useful data which is of immense help to the res warmer.

(d) Published Surveys Of Markets:

This is another useful source of supplying secondary data. Market surveys and reports are
important instruments in the hands of researcher for conducting marketing research. These are
published by business houses or independent research organisations. These pertain to specific
lines of products.

(e) Foreign Govts, And International Agencies:

Publications of foreign Govts, with regard to trade and other important aspects of economy of
respective countries and information published by UNO, ILO, IBRD (International Bank for
Reconstruction and Development) serve useful purpose in making comparison of Indian
conditions prevailing in other countries of the world.

(f) Other Sources:

Besides the above mentioned sources of marketing research, there are many other sources of
supplying secondary data e.g., colleges and universities stock exchanges and commodity
exchanges, specialised libraries’, internal sources such as sales and purchase records, salesman,
reports, sales orders, customer complaints and records of other companies.

The secondary data collected from above mentioned sources suffer from certain limitations. The
basis undertaken by different agencies for collecting data may not be comparable. In other
words, uniform basis may not be adopted for data collection. The data may be based on
incomplete records under secondary source; data is collected for purposes other than marketing
research.

Discuss the Different Types of Marketing Decisions

April 30, 2016 by Umar Farooq

The marketers should manage all the types of marketing decisions by taking into account the
environmental aspect as well. The marketing decisions should not only be right but they should
also be taken at right time. The marketing decisions are mainly divided into four categories.
You may also say these categories the different types of marketing decisions taken by the
management at the making marketing plans for the products.
Types of Marketing Decisions

There are four categories or areas, which always kept in mind, while making different sorts of
marketing plans for different products and services.

Product

Price

Place (Distribution)

Promotion

In the 60s, the term “marketing mix” became familiarize. There are certain activities that are
included as the ingredients of marketing mix like branding, distribution channel, product
planning, pricing, advertising, packaging, promotions, personal selling, display, physical
handling, servicing and fact finding & analysis.

The Marketing Mix

The marketing manager should control the parameters of 4Ps of marketing keeping in view
the external & internal constraints of marketing environment. The main objective is to take
decisions that focus 4P’s on target market customers in order to develop perceived value &
produce favorable response.

Product Decisions

Product is related to physical, tangible products as well as services. There are certain decisions
that are related to the product like

Functionality

Brand Name

Quality

Safety

Warranty

Packaging

Styling

Repairs & support

Accessories & services

Price Decisions:
Following are some of important Marketing Decisions related to pricing.

Pricing Strategy (penetration, skim etc)

Suggested retail price

Seasonal pricing

Cash & early payment discounts

Bundling

Price discrimination

Price flexibility

Volume discounts & wholesale pricing

Place (Distribution) Decisions

The availability of product to the customers is referred to as distribution. Following are some of
the examples of distribution decisions.

Market coverage (Exclusive, inclusive or selective distribution)

Distribution channels

Inventory management

Specific channel members

Order processing

Warehousing

Distribution centers

Reverse logistics

Transportation

Promotion Decisions:

Marketing decisions include promotion decisions which are important content of the marketing
mix in which different aspects of marketing communication occurs. The information about
the product is communicated with an objective to produce positive customer response.
Following are some of the important promotion decisions.

Promotional strategy (pull, push etc)

Sales promotion

Advertising

Public relations & publicity

Personal selling & sales force

Marketing communication budget

Limitations Framework of Marketing Mix

In the early days of the marketing concept the framework of marketing mix was particularly
useful when larger portion of economy is represented by physical products. In today’s era
marketing is more integrated into the organizations and with various categories of products &
markets, there are certain marketers that added further P into the Marketing Mix which may
represents Packaging, Process or People element. But mainly marketing mix is composed of
only the above mentioned four Ps.

The Product element is the starting point of the marketing mix because it represents the
offering that organization made to its target market. It is big fact that the organization always
seek to provide solution to the problems of the target market. The organization can market
both tangible & intangible offerings.

All types of products include the distribution decisions. The physical goods are influenced
greatly by the distribution decisions like truck parts or laundry detergents. Moreover digital
goods & services are equally affected by the distribution decisions like downloadable music,
television programming, income tax services etc. The product distribution is changed through
major role of Internet which provides more opportunities for contacting the customers. But
same distribution issues & obstacles are faced by the online marketers as faced by offline
marketers.

 
WHAT IS MARKET SIZING?

Market Sizing is the process of estimating the potential of a market.

Understanding the potential of a market is important for companies looking to
launch a new product or service. Using a wide variety of secondary market
research sources and databases, we synthesize results from previously published
research and other data sources to help define:

The total size (or potential size) of a market

The major competitors in a market by category

The composition and profile of a target customer

The products/services available in the market

The most significant trends in the market

MARKET SIZING ANALYSIS

To estimate the potential of a market we often use a “bottom-up approach” —

breaking the unknown pieces down into granular sets of assumptions and then
roll it back up to an overall market size estimate. Due to the highly distinct nature
of each Market Sizing project, they require a great deal of consulting and special
attention to produce an accurate Market Sizing analysis.

MARKET SIZING APPROACH

We typically start with a quick estimate – a “back of the envelope” market size
estimate that can provide marketers with enough information to decide if further
investments in product/service development even make sense. A second pass at
the market sizing question involves much more granular analysis. Often we’ll
develop 2 or more estimates using diff erent approaches. When these approaches
“triangulate” – confidence in the estimated market size range is increased. When
the approaches provide widely disparate results, we use sensitivity analysis to
understand which assumptions are most critical. Additional research or risk
reduction is sometimes recommended to narrow down the range of market size
estimates.

THE VALUE OF MARKET SIZING

Developing a Size of Market estimate is a critical first step in building the business
case for any new product development initiative. The amount of investment
required to be successful needs to make sense given the potential return that the
market offers.

By being explicit about the facts and assumptions used to generate a market size
estimate, we are able to identify critical factors that need to be addressed in
downstream development business planning activities.

Defining and sizing your market.

 Now this is a really important step to the overall process. This is really going to be key to your
overall business strategy. Now, I see entrepreneurs make a mistake all the time and I want to
make sure you don't make the same mistake. And I call it kind of the 1% rule, where they
basically say if I just get 1% of the market, I'm going to be a millionaire, or maybe a
billionaire, for those that think really aggressively. Now the important thing is I don't want you to
go in to an investor and say all we need is 1% of the market. We're going to all make a lot of
money. They will throw you out very quickly 'cause it really affects your credibility overall, so you
don't want to do that. What we want to do instead is we actually want to get into a segmenting
exercise where we start at the industry and we actually start to segment down from the
industry, to start defining our market, right? And then more and more, we're just simply
narrowing things down, until we actually get to our core market, which is really where our sweet
spot is, and that's what we want. We want this nice, beautiful core market that then we can
actually market to and sell lots of products and services. That's what investors want to hear. So
defining a market can be a bit tricky, but it's really important that we nail this one down. It's tricky
because sometimes the information that's out there is not exactly how you want it packaged or
you might define it in a different way. Don't worry though, because you get some freedom in
how you actually define your industry and your market. As you get smaller and smaller, as it's
get more meaningful to your business, you can control more of how you define it. The key,
though, is the narrowing down process, and that is going to reign supreme in terms of how this
actually works. Now, why is this important? Well, if you don't define your industry and your
market effectively, you really can't size it. Also, you can't calculate your growth rates, and you've
got to be able to calculate your growth rates in your business plan. And finally, your competition,
your competitive landscape, becomes very difficult if you don't have a really good definition.

Skin care market case study: market size:

 So for organic male, let's take a look at their TAM … and see how large their total addressable
market is. … Now, for them I would, … I first have to make sure I define the market properly. …
So I'm going to define it as adult males … who buy skincare, right. … And that market size is
actually … 36.8 million people, right and that's their TAM. … That's your total addressable
market. … Next, we're going to define SAM. … And remember SAM is the segmented
addressable market … and this really is your qualified market. … This is the people they have to
qualify … in order to buy your product or service. … So it's not the potential we going to narrow
it down … to a qualified buyer. … Some of the things that you can look at … while you're
narrowing this down, … how you're narrowing this down, … is first of all your demographics,
your geography … and if you're in B2B the size of the business … or type of the business, those
are some tools … that you can work to narrow this thing down. … Also I ask you to look at your
business, …

Stakeholder Analysis Defined

A company doesn't operate without the help and input of numerous people. Those people
are called stakeholders, and they can be anyone from owners, creditors, suppliers,
employees, and even the community in which business is conducted. Stakeholders have an
interest in the company, and they are the focus of stakeholder management.
Stakeholder management is the act of winning over the stakeholders so they support the
company and continue to be a successful asset to both the company and any project the
company is working on. But long before you can manage the stakeholders, you need to
identify just who has an interest in your company or project, which is known
as stakeholder analysis. In this lesson, we will learn the details of stakeholder analysis
and just how to perform one.

Stakeholder Analysis First Step

Companies that are successful and complete successful projects know who the key players
are that contribute to the company's success. Thus, the very first step in stakeholder
analysis is identifying who the stakeholders actually are. This involves creating a list of
everyone who is affected by the company and the project they are working on as well as
anyone who can influence the project or company. Some examples of common
stakeholders include:

Shareholders

Government

Suppliers

Lenders

Coworkers

Customers

The community

Executives

Stakeholder Analysis Methods

The process of knowing who your stakeholders are can be complicated. This is because
many people can be involved and not all of them come to mind immediately. Let's look at
some of the methods of identifying stakeholders.

1. Knowledge Based

One way to identify stakeholders is through research. Oftentimes subject matter experts
are grouped together so they can discuss all of the people who have an interest in the
project or the company.
2. Personal Experience

Sometimes the people working on the project have previous experience from other
projects that can help them identify stakeholders. For example, they may have learned the
hard way of who has interest in the company when they forgot about them in a previous
project.

3. Interviews

Interviews help get questions answered. When you interview someone, you can find out
what their involvement is and how they feel about the company or the project.

4. Agreements

Many times a company will have an agreement with another person or company. When a
company makes an agreement with someone, that someone becomes a stakeholder. For
example, when a company makes an agreement with a supplier for supplies, the supplier
has power because if they do not deliver the supplies, projects might not get finished. The
same can be true for a lender. The lender holds great power over a company and projects
because they get to decide if they want to offer a loan.

5. Historical

We all know that history helps us better understand the future. If we know what happened
in the past, we can use that information to better understand outcomes in the future. In
addition, stakeholders that have been involved in past projects may be involved in current
projects. A simple comparison of previous projects and current projects can help identify
suppliers. A good point to remember also is that history can help not only identify who the
stakeholder might be, but how much interest and power they have had previously in the
company or their projects.

Prioritizing, Learning & Managing

Once you know who the stakeholders are, the next step is to prioritize them based on their
involvement or power. Those that work for the company, like executives and coworkers,
have high influence and power over the company and their projects. The community may
have high interest, but they probably do not have high power over the company or project.

Stakeholder

By JAMES CHEN
 Updated Jun 30, 2019
What Is a Stakeholder?
A stakeholder is a party that has an interest in a company and can either affect or be affected by
the business. The primary stakeholders in a typical corporation are its investors, employees,
customers and suppliers. However, the modern theory of the idea goes beyond this original
notion to include additional stakeholders such as a community, government or trade
association.

Volume 75%
 

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Stakeholder

Understanding Stakeholder
Stakeholders can be internal or external. Internal stakeholders are people whose interest in a
company comes through a direct relationship, such as employment, ownership or investment.
External stakeholders are those people who do not directly work with a company but are
affected in some way by the actions and outcomes of said business. Suppliers, creditors and
public groups are all considered external stakeholders.

Example of an Internal Stakeholder

Investors are a common type of internal stakeholder and are greatly impacted by the outcome of
a business. If, for example, a venture capital firm decides to invest $5 million into a technology
startup in return for 10% equity and significant influence, the firm becomes an internal
stakeholder of the startup. The return of the company's investment hinges on the success, or
failure, of the startup, meaning it has a vested interest.

An Example of an External Stakeholder

External stakeholders are a little harder to identify, seeing as they do not have a direct
relationship with the company. Instead, an external stakeholder is normally a person or
organization affected by the operations of the business. When a company goes over the
allowable limit of carbon emissions, for example, the town in which the company is located is
considered an external stakeholder because it is affected by the increased pollution.

Conversely, external stakeholders may also sometimes have a direct effect on a company but
are not directly tied to it. The government, for example, is an external stakeholder. When it
makes policy changes on carbon emissions, continuing from above, the decision affects the
operations of any business with increased levels of carbon.

Problems With Stakeholders

A common problem that arises with having numerous stakeholders in an enterprise is their
various self interests may not all be aligned. In fact, they may be in direct conflict. The primary
goal of a corporation, for example, from the viewpoint of its shareholders, is to maximize profits
and enhance shareholder value. Since labor costs are a critical input cost for most
companies, a company may seek to keep these costs under tight control. This might have the
effect of making another important group of stakeholders, its employees, unhappy. The most
efficient companies successfully manage the self-interests and expectations of their
stakeholders.

Stakeholders vs. Shareholders

Stakeholders are bound to a company with some type of vested interest, usually for a longer
term and for reasons of greater need. A shareholder, meanwhile, has a financial interest, but a
shareholder can sell a stock and buy different stock or keep the proceeds in cash; they do not
have a long-term need for the company and can get out at any time.

For example, if a company is performing poorly financially, the vendors in that company's supply
chain might suffer if the company no longer uses their services. Similarly, employees of the
company, who are stakeholders and rely on it for income, might lose their jobs. However, share
holders of the company can sell their stock and limit their losses.

How to Define Stakeholders for Your Software Development Project

A good discovery process is critical to software development. The

requirements generated here set the stage for the entire project, laying the
groundwork for success or failure.
Involving all stakeholders from the beginning is the single most impactful step developers can take- but
identifying those stakeholders isn’t always easy.

Companies who rush through this phase might overlook a group whose support they need down the road.
That’s why defining the stakeholders should be a deliberate process during the early stages of discovery.

What Do Stakeholders Do?

The term “stakeholder’ refers to the people or groups affected by a software development
project. Stakeholders exist both within the organization and outside of it.
They may be end users, or they might simply be affected by the process. Either way they have a vested
interest in the final product.

Input from stakeholders tells the company what kind of software is needed, suggesting ideas for features
or problems it needs to solve.
They construct use-case diagrams and map workflows which guide the new software’s UI design. As a
group they evaluate the merits of each others’ ideas, assigning an initial priority to the prospective feature
list.

Stakeholders are in the best position to offer specific input on needs at their
level. They know what will or won’t work within their workflows.
Plus, as representatives of their category’s interests they have a handle on any unique needs that may
conflict with other stakeholders. Having that knowledge early helps developers find a compromise before
serious problems arise.

Collaboration doesn’t stop after discovery, either. A more limited group of stakeholders is active during
development to review prototypes and provide recurring feedback throughout the development process.

Why Are They Important?

Neglecting stakeholders is a risky proposition. First and foremost, without their input developers are
working from an incomplete list of requirements. Surprise needs are bound to pop up during
development.

These sudden additions cause scope creep, where the project grows past its original boundaries.
The initial time and budget requirements are forced to stretch to cover the new requirements. That isn’t
always possible. It’s much more likely that some features have to be cut to meet
deadlines.
Even when deadlines and budgets are satisfied, missing contributions have consequences. Lack of
adoption is a serious risk. Sometimes software turns out exactly as leadership wants but isn’t used by
employees.

They might already have more effective tools or find the new software doesn’t have features they wanted,
or they’re just not sold on the software’s value.

Whatever the reason, their lack of enthusiasm translates into a wasted investment . This
is especially true for smaller and niche groups whose needs tend to be overlooked.

There is room within development to add new requirements. However, those should come in response to
ongoing feedback instead of being a band-aid for a weak discovery process.

Who Is Considered a Stakeholder?

While every development project is unique, there are some universal categories that can be used to guide
stakeholder identification.

End users and beneficiaries

These are the people who will be most directly affected by the software. Their buy-in is essential. No
matter how flashy or efficient software is, if end users don’t like it they won’t use it.

End users fall into three main groups:

Direct users
Those who will use the software directly are usually most concerned with how it will fit into their current
workflows. They want to know that it solves a significant problem or otherwise makes their job easier.

Secondary users
Direct users interact with the software itself. Secondary users rely on the products of the software. New
software needs to produce results in a format that fits into secondary users’ workflows.

Forgetting about this group can cause one problem while solving another, like suddenly generating
reports in a format secondary users can’t integrate into their analytics.

Beneficiaries
These are all the people affected by the software’s products. The term encompasses a huge base of
customers and vendors who focus more on results than process.

Their input should revolve around the services or information the software will provide.

Project build team 

Good software development is a balancing act between dreams and reality. End users
sometimes create an unrealistic list of features and requirements.

The build team serves as the voice of reason that keeps the project within a manageable scope.

Their job is to find a way to fulfill as much of the “wish-list” as possible while meeting business goals
and hitting time and budget targets.

Each member of the build team has a different focus:

Managers and company liaisons  make final decisions about timeline, budget, and scope.
They’re the ones authorized to add time or cut features.

Project managers  shape the development process. They keep track of all the moving parts to
maximize efficiency and serve as the point of contact for other stakeholders. Their primary interest
is creating a solid product and leaving clients happy.

Developers  build the software based on feedback from other stakeholders, but they’re also
stakeholders in their own right. They have the technological expertise necessary to advise
executives on which features are feasible and how long each would take to build.
Partners  refers here to outside groups involved in the actual development process. They may be
owners of third-party tools or a client’s business partners who need to ensure compatibility with
their systems.

Authorities
Some people aren’t directly involved in the project but do have authority over it in some way. This
includes legal and regulatory bodies, shareholders, and company owners.

Although they don’t have daily interaction with the software, they govern its usage. Be sure to get
their input during discovery to avoid being shut down later.
Each of these categories can be further divided into internal versus external stakeholders.

Internal stakeholders are part of the client company: executives, employees, board members,
and shareholders.
Their goal is to solve pressing business problems through optimized processes, increased sales, better
insights, or some other measurable benefit.

External stakeholders lie outside the client company, such as customers, regulatory bodies, legal officials,
and surrounding communities. They want to gain the most benefit from the project with the least risk to
their own interests.

Both groups have what seem like conflicting motives, but in practice there’s a middle ground where
everyone can find value. Collaboration by a diverse group of stakeholders is key to finding this middle
ground.
Source: Concepta, Inc.

Defining Stakeholders
Including every individual stakeholder in discovery would be insanely costly, both in time and resources.
Fortunately, that’s not necessary.

Choosing representatives from every relevant group provides a good working picture of a

project’s needs.

Look at all stages of the project from conception to actual usage to identify stakeholders.

Consider these questions when building the stakeholder list:

Who will use or be affected by the final product?

Who uses the current tool or software that the new software will replace?

Which departments use the products of both the current and proposed
software?

How will workflows change? Will positions be modified or created?

What legal restrictions and regulations apply? Who knows enough about
them to advise the development team?

Who has authority to make changes to the development plan once it’s
finalized?

Are there any people whose support is absolutely vital to the project’s
success? Whose buy-in is needed?
Stand-ins are often used for external stakeholders. Legal counsel can cover regulatory bodies and local
government, for example, and focus groups serve as barometers of public opinion.

It’s also useful to consider who wants the project to succeed and who isn’t on board yet.

Bringing someone who’s reluctant to adopt new technology onto the stakeholder team can be a way to
give them a sense of ownership that might change their mind.

Similarly, enthusiastic supporters can lend energy to a project others aren’t sure about.

Key Players for Ongoing Support

Interim progress meetings don’t need to include every stakeholder whose input is used during discovery.

Developers can gather requirements and suggestions from a larger group in the beginning, then identify
key players to provide running feedback during development.

What sets key stakeholders apart? Look for those with two or more of these characteristics:

Will have direct contact with the final product (project managers and end
users)

Are the senior representative of a group of important stakeholders

(department heads)

Have unique knowledge or insight to offer which can shape development

process (Subject matter experts)

Are so vital to success that the project can’t easily succeed without their
support (executives, business partners, end users)
Think about whose input or approval is needed on an ongoing basis as opposed to those who simply want
to approve the concept.
Also, keep in mind that stakeholders don’t have to show up in person to be included. For instance, agile
development practices like continuous delivery open the door for gathering regular feedback from
end users in the form of feature requests and reviews.

Sample Stakeholder Selection

What does stakeholder selection look like in practice?

Imagine a mid-level retailer – call them ExampleCorp – who’s working through digital transformation.
ECorp wants to make their sales, marketing, and inventory data accessible by leaders throughout the
company.

They decide to build a unified reporting dashboard that collects incoming analytics streams and displays
them in an intuitive, easily understood format. Who are their stakeholders in this project?

ECorps starts by compiling a list of everyone whose input should be considered during discovery.

For this analytics project, they should consult:

Executives

Company liaison

Marketing team

Social media manager

Sales staff

Customer service department

Legal department (for advice about data protection regulations)

Administrative staff who currently pull reports

IT department who will maintain and train on the dashboard (including the

database manager)

Company shareholders

Project managers

Development Team
Their key stakeholders, who come to progress meetings during development, are a smaller group.
The project manager, IT team, and company liaison still attend themselves. The sales, marketing, and
customer service departments simply send representatives to report on how the most recent updates are
being received by end users.

If a particular feature leans heavily towards a certain department more employees might want to come,
but otherwise the representatives can carry concerns to the meetings instea