In today’s world data is the new oil. By optimising data many organizations and industries are understanding various aspects of the business. Thus, managing data properly i.e. accounting and the reports generated from it will help you to create an effective and efficient marketing strategies and campaigns. Though accounting and its related reports are traditionally related to fiscal and operational management but if analysed properly will help in understanding the marketing indicators such as targeted customers based on geography or products. In this blog we will go through how the accounting data and its financial reports help marketing team in optimizing its strategies and campaigns.
What is Accounting Data & Financial Reports?
Before digging dip that how accounting data and financial reports leverages marketing strategies and campaigns, let go through what exactly is the accounting data and financial reports means:
What is Accounting Data & Financial Reports?
Before digging dip that how accounting data and financial reports leverages marketing strategies and campaigns, let go through what exactly is the accounting data and financial reports means:
1)Accounting Data:
The term as sounds means accounting or recording of data in a systematic and categorised manner.
This data includes financial information related to the performance of the organization.
Eg.: Sales or revenue, Purchases or expenditures, profit, or losses.
2)Financial Reports:
These are the reports which are generated from the accounting data. Thus, financial reports are dependent on accounting data.
This report gives us a comprehensive view of the company’s financial performance.
This generally includes balance sheet, income statement, cash flow statement.
Now let’s dig into understanding…
How the Accounting Data and Financial Reports can be leveraged:
1)Realistic Marketing Budget:
Proper analysis of financial reports like income statements or cash flow statements will help in understanding the company’s actual availability of resources or funds.
This will help in deciding the realistic marketing budget.
Thus, these financial reports ensures that marketing spending is in align with financial viability of a company or not.
2)Identify Selling Points:
Going through the financial reports we can identify which goods, services, regions, or time are generating higher revenue or sales.
This will help in identifying the area in which marketers can focus to gain maximum results from marketing.
For Eg.: If product A’s demand is more in south side of city during summer, then marketer can plan its marketing accordingly.
3)Calculating ROI:
The marketers can see the revenue generated after a specific marketing campaign from the financial reports.
When the revenue generated from marketing campaign is divided from the marketing campaign cost, the marketers can know the ROI of such campaign (ROI = Revenue / Cost of Marketing x 100).
This will help in gauging whether the respective marketing campaign should be continued or not.
Further, can help in setting future strategies related to the similar marketing campaign.
4)Setting Pricing Strategy:
Financial Record give us the insights of cost structure of goods or services.
This helps marketers in formulating effective pricing strategies.
Understanding pricing helps in beating the competitors and taking the control over the market share.
For Eg.: If we a product is having good margin then marketers can set a discount policy which will lead in increase in sales in terms of quantity thus will increase overall profitability.
5)Managing Risks:
Excess spendings on the marketing or less ROI from a marketing campaign can be assessed by the financial reports.
This information helps in managing the risks related to marketing.
Using this information marketers can make plans and policies to mitigate risks.
6)Analysing Customer Lifetime Value (CLV):
Customer Lifetime Value (CLV) is nothing but how much profit a company earns from a customer during his lifetime.
It varies from sector to sector or industry to industry.
Categorising the CLV data will help in getting information related to high, medium, and low value customers.
By analysing this data, the marketers can get clever insights in relation to high value customers.
The marketers can also come with different strategies based on the customer's CLV.
Thus, this will optimise the overall campaign.
7)Forecasting and Planning:
Perfect marketing strategies or campaign requires data related to future demand and trends.
Financial reports help in getting this type of data by proper analysis of same.
By analysing the financial reports, we can get the past and current performance which will then help us knowing what strategies worked and how.
This then helps us to forecast precisely which leads to proper marketing strategies.
8)Performance analysis of Product and Services:
Financial data provides us the performance result of the goods and services.
This gives us insight of which products are performing and which are underperforming.
Using this information marketing team can focus more on high performing products and modify or discontinue the marketing campaign for low performing products.
This will help marketing team to optimise the marketing strategies which will then get maximum results.
9)Combo Marketing:
Analysing financial reports can also show the marketing team product or service wise sales.
They can use this information to know which products or services are selling high or less.
By combining low selling products with high selling products by way of combo discount or 1 on 1 free, these will increase the sales of low selling products.
This type of information will help marketing team to increase sale of products which are struggling.
10)Inter Departmental Collaboration:
Marketing team can join hands with accounting team.
It will create a synergy to improve performance of both the departments.
Getting proper insight of financial reports from accounting team will help marketing team to understand the performance of marketing.
Whereas the accounting team will gain valuable insight related to latest market trends and customer behaviour.
This data will help accounting team in making precise predictions related to forecasting and planning.
11)Marketing Performance Tracking:
Integrating accounting data with the live marketing analytics will give the valuable insight related to ongoing marketing campaigns.
This will help in tracking the performance of marketing campaigns live.
Using this data marketing team can update the marketing campaigns to get required results.
This will save not only money but also time.
12)Understanding CLV-CAC:
We have understood CLV above that is refers to Customer Lifetime Value.
CAC refers to Cost of Customer Acquisition
CLV:CAC refers to multiple of how many times do we earn in value terms from a customer compared to the cost which we incurred to acquire him.
It is an extremely important metric to understand what is the true outcome of the marketing and advertisement spends and help the business to take appropriate decisions.
Formula: Customer Lifetime Value/Cost of Customer Acquisition.
Conclusion:
Collaborating financial data with marketing strategies is a masterstroke in the marketing strategy. This will create a synergy which will highly optimise the marketing campaign. Taking decision based on the analysis of financial reports will give an edge to the marketing team compared to competitors. This will also increase customer acquisition and retention. Aligning marketing strategies with company’s financial objectives and goal will also results in company’s overall growth.
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