What is Data-Driven Marketing?
- What is Data-Driven Marketing?
- The Benefits of Data-Driven Marketing
- The Challenges of Data-Driven Marketing
- Best Practices for Data-Driven Marketing
- The Steps in Data-Driven Marketing
- Data-Driven Marketing Examples
Data-driven marketing occurs when marketing teams design their strategies based on analysis of large-scale data. This analysis will provide insight into the preferences of customers and broad patterns that could impact the effectiveness of the marketing campaign.
While an approach to marketing that relies on data was once a rarity and difficult, the proliferation of channels that specialize in niches as well as changing consumer expectations have resulted in data analysis becoming an integral procedure for modern marketing campaigns.
A”data-driven” media plan** approach is now supported by the huge amounts of information organizations can access. Marketing teams collect information through the use of apps or websites, and using good”attribution modeling** which tracks each interaction between brands along the customer’s journey. Once all this data is analyzed and analysed by marketing professionals, they can discover what creative assets triggered higher engagement and which channels provided the most return on investment, and so on. Based on this information businesses can improve their marketing strategies to provide the highest quality customer experience and maximize the return on marketing investments.
The Benefits of Data-Driven Marketing
The modern consumer is bombarded by messages and marketing from brands. This means that they have become more aware of the messages they be interacting with. With a data-driven strategy marketing teams can dramatically increase the likelihood that their”target audience”** are likely to take a look their advertisement, attend an online webinar, go through their blog, or complete other actions that help achieve the goal of conversion.
Data-driven strategies** enhance customer experience and perception of brands by giving companies an understanding of the needs of consumers and desires. They also increase conversion rates because the targeted content provided with data driven marketing are more likely be noticed by users. The top benefits of using data-driven marketing are:
Better Customer Experience
Data-driven marketing is based on the use of deep customer profiles to help make the experience for customers more enjoyable. This is crucial to success because nearly half customers** have reported leaving an online store to purchase the product from another site due to the experience being unsatisfactory.
The additional personalization provided by data-driven marketing helps build confidence between the consumer and the brand, while also creating favorable customer interactions. The ability to tailor the experience of consumers can yield tangible positive results as evidenced by McKinsey concluding that personalization can bring approximately 5-8 more than** the ROI on marketing expenditure.
Better Attribution for Spend Optimization
One of the biggest challenges for marketers is to determine the areas where their advertising budgets are not being utilized. Analytics-driven, data-driven marketing tools helps marketing teams determine which part of the budget for advertising is having the most impact on brand awareness or conversions. This is accomplished by analyzing the customer’s journey using models of attribution such as UMM, which is a unified measurement (UMM )**. UMM examines multi-touch attribution as well as media mix models to give an exhaustive overview of the process leading to buying. Companies can identify what drives customers and potential customers through the funnel, and then allocate money in accordance with the funnel.
Produce Relevant Content and Copy
Analyzing consumer data provides marketers insight into the type of content images, text, and other content your targeted consumers prefer to consume. Sending the right message – one that meets their personal desires and adds value at the right moment is vital to connect with your customers. Many marketers have difficulty to ensure that their content is relevant to their target audience, as shown by two crucial information points:
- The amount of blog content has grown by 880 percent** over the last five years, yet social sharing has decreased by almost 90. This indicates that there is an inconsistency between the messages of brands and what consumers value.
- 74 percentage** of people feel dissatisfied when they see ads they feel aren’t relevant from companies.
When you look into your analytics, you’ll be able to discover what message and articles are connecting with your target audience. This will help you make more efficient product choices and help you to understand your customers.
In the end, an approach that is based on data lets teams make better-informed choices, with 2 out of three marketers** saying it is more beneficial to make decisions based on data instead of gut instincts. Data analysis lets marketers make choices based on the realities of scenarios rather than theorizing. But, data-driven marketing should not take into account the emotional aspects that influence buying decisions made by consumers. Marketing teams must assess data using a framework that takes into account the rational and emotional aspects of decision-making to ensure that they’re appropriately balanced in their campaigns.
The Challenges of Data-Driven Marketing
The data-driven marketing strategies can be beneficial for both consumers and marketers. However, there are few obstacles that prevent marketers from reaping the full advantages of their data, or from reaching their customers effectively.
Avoid Being Invasive
Although consumers are looking for individualized experiences, they do not wish for companies to have all the information about their personal information. And, even more importantly should they choose to share personal information they would like to know how this information can be utilized to their advantage. The majority of consumers are concerned about the transparency of their data With 79 percent of consumers** saying they will quit doing business with a company when they discover that their personal information is collected and used without their consent.
When contacting customers via personalized or messaging strategies it is important to consider whether they are delivering the customer with value. Examples include helping customers to purchase products, or showing your customers the extent to which you know about their personal information. Furthermore, marketing teams must be incredibly transparent with how data is collected and used – giving consumers the ability to opt out of data collection, especially in light of regulations such as GDPR(https://www.csoonline.com/article/3292578/california-consumer-privacy-act-what-you-need-to-know-to-be-compliant.html) and CCPA(https://www.csoonline.com/article/3292578/california-consumer-privacy-act-what-you-need-to-know-to-be-compliant.html).
Poor Data Quality
If you want to create plans that are that is governed by data, you have to have the appropriate procedures for data in place. This will make sure that you’re base your decisions and strategies on data of high-quality** that accurately reflects the needs of your customers. If your data doesn’t match the quality criteria for data like accuracy, timeliness of data, completeness, representativeness and so on. You risk making decisions using data that offers no insight into the actual needs of your customers. In fact, almost half of new data records have at least one critical error in them and an HBR study could only loosely rate 3 percent(https://hbr.org/2017/09/only-3-of-companies-data-meets-basic-quality-standards) of data quality scores to be acceptable. In this regard prior to implementing strategies based on data, marketing departments should ensure that they have quality standards for data and guidelines in established.
Extracting the Right Information
A lot of companies have invested on big data (often investing in millions) but are in a position to earn a tangible benefit from the investment. If you’re collecting massive amounts of databut not the correct information – it’ll not be able to help you formulate how you market. 70 percent of marketing and sales executives have reported data-driven marketing as an important initiative, yet only about 2 percent(https://www.forbes.com/sites/bernardmarr/2016/06/27/why-investments-in-big-data-and-analytics-are-not-yet-paying-off/#12a6e2a07963) have seen a positive impact when investing in these solutions.
To make the most value from their data, organizations require the proper personnel, policies as well as infrastructure** in places. Data scientists can draw conclusions from large databases, processes to ensure data is kept clean and the appropriate software partners to organize and correlate massive amounts of data. It’s all about having people with the appropriate capabilities and the appropriate software capabilities to aid in making the right choices.
Implementing a data-driven marketing plan requires time and effort since marketing teams have to ensure that the appropriate policies and procedures is in place. Although many marketing professionals aren’t comfortable with the process however, the results are worth the effort.
If your company does not have the right expertise and the right technology however, it may be difficult to know where to begin. Marketing teams must make sure that they have a thorough plan before they start out, or should collaborate with a third-party team** who can help their efforts to get the most value from their information.
Best Practices for Data-Driven Marketing
In determining a strategy to implement a data-driven approach to marketing, particularly at a time where global data collection policies are getting more strict (especially with regard to GDPR, and CCPA) Consider the following aspects:
Data-driven marketing is about enhancing the success of marketing** through the customer experience being enhanced, which is made possible by data-driven insights. Customer experience is the key element in this equation. Every campaign designed using information should provide an elucid solution to “what is in it for the customer?”
In this regard, making a brochure that promotes your product does not suffice to spur downloads. Take into consideration the needs of the customer and what they might appreciate. Based on the information you have What is the issue your client is trying solve? What stage of the buyer’s journey do they stand? Then, you can determine the most useful piece of information or content you can offer.
Outline Clear Advantages
Consumers are more likely give their personal details when they believe that they will receive better deals or greater value from their interactions with brands. Let customers know that they will get something valuable if they let your company to use their information and build profiles of their users. It could be customized product recommendations or information that is insider-only in the form of a newsletter. Marketers should highlight the benefits that consumers will benefit from.
A lot of consumers are concerned about the way that organizations use their information, ranging from invading messages to the possibility of losing their information through a breach on your network. Marketing departments must be transparent with regards to the data they collect and how they plan to make use of that information and the way in which it is stored and protected. Furthermore, provide customers with the ability to alter their personal data or to deactivate their account. This is required under GDPR and CCPA. The ability to have a clear view to where data is stored allows marketing teams to monitor and alter information as requested by customers.
The Steps in Data-Driven Marketing
The process of the process of creating a data-driven marketing program isn’t easy. The complexity increases when an essential process is missed, which causes teams to reverse their course and extend their time to market for the plan. Before you begin your marketing strategy take a look at these important elements of the process and ensure you have a strategy as well as the resources required to complete each step.
Determine Which Data You Need
It will be contingent on the objective the program is aiming for. If you’re seeking to build user-level profiles, you’ll be focusing on collecting information from consumers. If you’re trying to monitor the journey to purchase and the customer’s journey, concentrate on attributes information. When you’ve determined your objective ensure that you’ve set up KPIs which will enable you to gauge the effectiveness of your plan.
It’s crucial to comprehend the purpose of what you want to achieve with your data. Collaborate with your team of data scientists to identify any gaps in your current data set and then determine the best way you can fill them in to establish KPIs, and then advance.
Implement Data Quality Best Practices
Also, if your program’s data-driven model is based on insufficient or insufficient data, you’ll not be able to see the desired results. In fact, you could be changing your campaign to diverge from what your customers desire. To avoid this ensure you have precise data quality guidelines. This will help ensure that you are making decisions that are based on the most up-to-date and reliable information available. Set up policies across all departments to ensure that each team records the same information using the exact format. The most important dimensions of data quality** to be considered are:
Completeness / Comprehensiveness
Data-Driven Marketing Examples
Data-driven marketing can be utilized effectively to help inform short-term and long-term performance strategies as well as”brand building” campaigns to build brand**. Here are some ways marketing teams can make use of data-driven strategies in their plans:
Attribution information can give your team an insight into which types of content are most effective in grabbing interest of your audience. The information is used to inform the user’s profile with details such as “responds to humor in ads” or “responds to humor in ads. Marketing teams can create these types of content, and then, AI-enabled systems** can serve this message to the appropriate audience at the right moment – giving them a more personal experience.
Data collection and analysis allows marketing professionals to monitor the efforts to build brands that, while essential, are harder to measure. Through brand initiatives, businesses have greater insight into the values they can appeal to as an entity. Brand recognition and loyalty are crucial to maintaining customer loyalty and long-term growth** However, it isn’t always easy to prove this ROI to people in the business – since they don’t always correspond with a specific, quantifiable sales.
Utilizing information such as “leading indicators** helps marketing teams determine what makes a brand be popular with consumers and identify areas where they can take swift steps to boost their brand’s health.
The Right Media Channels
As marketer, your responsibility is to get your message to your viewers wherever they are. For younger generations, this could be through television or Snapchat. The older age groups, it could be found in newspapers or magazines. Knowing the specifics of which channel to choose to reach certain viewers is vital for optimizing media spending efforts. It will ensure the highest engagement at the lowest cost of budget.
With the help of attribution data marketing teams can identify the most valuable channels by observing the frequency with which an advertisement or asset was used and what impact it played in helping them move down the funnel of sales.
The Right Time
Also, make sure you make use of analytics and data to figure out the best time to conduct your marketing campaigns. This is a crucial aspect in personalizing your message to your customers and optimizing spending. It is the answer to this question “What time of day or what time of the week are your customers most receptive to ads?”
For the B2B business, this could be during work hours when customers are actively searching for a solution that can help them solve a problem they face. For retailers, it could be during the weekend, before shoppers head to the mall to look for new fashions for the season or perhaps for Black Friday shopping. When you understand when your customers are more likely to respond to ads and offers, you can better provide information to potential buyers at the time they are most eager to get it.
Nowadays, consumers expect an era of data-driven marketing, particularly when combined with the increasing amount of channels, applications and devices to connect with consumers on. Once these plans are in place, they enable you to leverage the power of your data , providing personalized customer experiences as well as optimizing spending, generating higher ROI.