Today we are awash in digital data. Something that will only rise as we saw a 70% increase in Internet sales and an 11% increase in digital marketing spending in 2020, which is expected to grow another 17% in 2021. This can be both a blessing and a curse. After years of working in the marketing industry, researching and teaching, there is a strategic mistake that I continue to see. It is the tendency for marketers to treat surface-level symptoms when there are often deeper level problems causing an issue. Michael Porter said, “Strategic thinking rarely occurs spontaneously.” Realtime 24/7 marketing data dashboards have not helped with this propensity for expedient remedies.
A benefit of digital marketing is that nearly everything is measurable. Google Analytics tracks over 200 metrics. Facebook Analytics adds another 100 and that doesn’t include your email, social media monitoring, CRM and POS software. A typical marketer can collect hundreds if not thousands of data points across digital and general marketing systems. Yet studies indicate 21% of marketing spending is still wasted resulting in inaccurate targeting (35%) and lost customers (30%). Added metrics does not equal added results.
With all this data it is easier than ever to spot a problem metric which marketers want to resolve as quickly as possible. Yet, the first problem noticed, such as a drop in website traffic, often doesn’t have a quick fix digital solution. It is merely a symptom masking a larger problem. This calls for some guidelines for marketing managers inundated with digital data. I suggest pausing for a root cause analysis that considers both digital and general marketing factors. Even though your symptom suggests a digital marketing issue, the root cause may be a general marketing problem that needs to be solved first.
With over 50% of advertising spending today going to digital marketing, it is useful to organize individual symptoms and problems into digital and general marketing. They usually require separate solutions and separate experts or teams. Below is a visual representation of a root cause analysis process for digital marketers. It is a modified Ishikawa, or fishbone cause-and-effect diagram, that outlines a process of asking a series of questions modeled after the Five Whys iterative interrogative technique. Like a physician, marketers can assess a set of symptoms to arrive at a diagnosis.
Identify related symptoms
To start this process you or someone on your team notices the first symptom. Maybe a dip in website traffic is what caught your attention, but what else may be declining? You may find other symptoms that can help identify the cause. Perhaps your email open rate is down in digital marketing metrics and in your general marketing data you notice new customer signups are starting to slip. Most of what you find will be signs or symptoms of problems. Make a list and sort into digital marketing symptoms and general marketing symptoms.
Identify contributing causes
Start asking “why” questions for each symptom. Why is website traffic going down? Why is the email open rate declining? Why is the number of new customers slipping? Contributing causes can be internal and external. External problems could include digital marketing causes such as Google changing their search algorithm or general marketing causes such as a new competitor, competitor strategy, or availability of substitutes. Internal problems could be digital marketing specific such as a change in your content strategy or general marketing such as customer service issues.
Identify the root cause
Keep asking “why” questions descending through a correlated list of digital and general problem causes. The root cause process “Five Whys” indicates that five “why” questions can get you to the root cause, but it may only take three or it could take more. Eventually, your contributing digital and general marketing problem causes will lead to one root cause. The root cause could be a digital marketing problem such as a significant Google algorithm change or a general marketing problem such as new competition in the form of a substitute product or service.
Plan actions for each problem
Create an action plan to address each digital marketing and general marketing problem starting at the root cause. If the root cause is a general marketing problem of substitutes drawing away protentional customers, a new product positioning should be developed to address this target audience’s needs. Then contributing digital marketing problems should be addressed with a new keyword, SEO and SEM strategy. New content should be created with the new product positioning. If repositioning isn’t enough, a new product or new services may need to be added.
Without pausing to find the root cause you could waste time and money on a product message and digital strategy that is not relevant to the customers that competitors are stealing away. You could end up investing in general best practices of optimizing content with infographics, videos, and increasing digital spending to no avail.
Today Porter’s five forces of competition can emerge quickly and are constantly changing. Adding a new product or service isn’t easy or a quick fix. However, discovering this larger problem sooner gives you more time to work on a solution. In that way, your digital marketing metrics can serve as an early warning system. Early detection enables your business to pivot promptly saving wasted resources on misguided action plans.
Sometimes a drop in website traffic is just a technical website issue or it could be a symptom of a larger problem. A root cause analysis may not be a simple solution but it can reorient your marketing actions away from short-term survival to long-term success.
Flip the analysis to plan for an opportunity
Finally, sometimes there may not be a general business or digital marketing problem and you are simply wanting to take advantage of a new opportunity. Perhaps you are trying to reach a new target audience group, launch a new product line or service, or move into new geographic territory.
To plan for an opportunity flip the root cause analysis and begin with the root cause as the intended end goal. Then work backward identifying general and digital marketing problems and symptoms that need to be addressed (adjusted or added) to help take advantage of the new opportunity.