What is Data-driven Marketing?
Data-driven marketing is a term used to describe marketing techniques based on insights from the analysis of data. Marketers pull data from different sources and departments. They use data from customer interactions, past sales, third-parties data, and many other resources. The main goal of data-driven marketing is to analyze data at a deep level, enough to make predictions about future behavior.
Data-driven marketing requires knowing what data is available and what data we must get to look at the big picture. Organizing and analyzing data assists your decision-making and consequently improves your marketing efforts.
Three Benefits of data-driven marketing
It optimizes your budget allocation
Firstly, data-driven marketing helps you identify what content guides leads along the sales funnel. Marketing data will assist in smart budget allocation. Therefore, the process of choosing where to spend your time and money should start with customer data. Analytic approaches can disclose where your marketing dollars are most effective.
Also, it can save you money by identifying which channels are costing you money. Using data-driven marketing, your budget splits based on what customer data reveals. Exploring customer data on how to split resources in a way that increases your marketing ROI.
Marketers can create more personalized campaigns and strategies
Secondly, technology makes customer data more accessible than ever. You can explore data on customers’ interests, lifestyles, and online activities. Then, data-driven marketing can use this data to create targeted campaigns with customized messaging. You can produce marketing content that resonates at a deeper level with your customer! Customer data can help you plan your content, marketing strategy, and where to post.
Improves product design
You can use data to improve product design or ad features based on customer preferences and ever-changing needs. Companies are using customer data and conjoint analysis to uncover customer preferences.
Data-driven marketers select product features and assess price sensitivity using customer data. At the same time, data-driven product management helps us offer the most profitable bundle of product attributes. At the same time, we account for customer needs and preferences in product design.
Three challenges of Data-driven Marketing
It depends on the quality of our data
First, the accuracy of our decisions will depend on the quality of our data. For marketing to become data-driven, there must be guidelines in place to get good data. High-quality marketing data is accurate, timely, and gets updated over time.
Data-driven marketing requires keeping an eye out for duplication and inconsistencies in data. If not, information could be missing and the consumer models you’re using to make decisions might not be accurate.
It requires getting rid of data silos
Another problem with marketing data is how massive and fragmented it is. Data scientists and marketing analysts aren’t collecting data on a daily basis. The reality is that data comes from different sources, departments, and teams. As a result, data-driven marketers end up dealing with many data sets called silos.
Silos are a data-driven marketer’s worst nightmare. They don’t provide a unified view of all available output. Also, they make it harder to spot marketing data irregularities.
It requires expertise on how to bring everything together
Data integration is essential for your marketing strategy. Marketers cannot see the big picture and get actionable insights without data integration. In an optimal scenario, data would flow between teams in the organization. It is expensive and time-consuming to structure our business process around a data-driven approach. It also requires experience in data management. Therefore, managers must know the implications that could affect the marketing data integration.
Applications of data-driven marketing
It can be used to improve customer experience. Data from Google Analytics helps marketers understand consumer behavior and preferences. You can use marketing data to identify leakages in the customer journey. Data helps you identify where to start working to improve your customer experience.
As doctors need test results to diagnose what’s not working, Marketers review campaign results and web metrics to understand why their strategies aren’t working. In data-driven marketing, you don’t rely on subjective approaches to measure success. Instead, reviewing key performance indicator metrics tells data-driven markers if their strategies work.
Use Data-driven marketing to improve targeting. New analytical tools and big data are allowing marketers to improve targeting in their campaigns. Data-driven marketing help select your channel, time, and budget easier and faster. Budget allocation is smarter aided by data-driven marketing techniques.
For instance, Google advertising networks allow targeting customers based on location, keywords, interest, and radius. Marketing data opened the door to personalized advertising. Nowadays, marketers have access to a great extent of customer data. It allows them to deliver more personalized and relevant content.
Personalized advertising goes beyond using data to select the right customer demographic. Data-driven marketing approach also helps you target customers depending on their stage in the conversion funnel. Customers at the bottom of the conversion funnel are more likely to convert. Data-driven marketers need different marketing communications than those at the top of the funnel.
Data-driven marketing tools
One most popular tool in data-driven marketing is Google analytics. This data-driven tool tracks different metrics from your website traffic. Google Analytics tracks website performance and gathers information about its visitors. It assists businesses in determining the top sources of user traffic. It also helps assess the success of their marketing activities and campaigns. Data-driven marketers use Google Analytics to track goal completions and identify patterns. It shows trends in user engagement and obtaining other visitor data such as demographics.
Adobe Analytics is an analytics solution that can help your team become data-driven. This software captures data from almost every device connected to the web (Kiosks, mobile apps, websites). The best part is that you can onboard any offline data too. Marketers can add data from CRM and integrate third-party platforms.
This marketing platform shows real-time and historical data available. It gathers data from many channels, even the ones that are offline. Adobe Analytics records information coming from brick-and-mortar stores, wearable devices, and other internet of the thing’s devices.
Another powerful tool is SEMrush. SEMrush is a data-driven SEO marketing platform. Keywords for SEO aid in the discovery of your content, products, and services. SEMrush helps you locate the proper keywords for your content. Your target audience can find you when they go online and search for you. They do also provide several useful SEO tools to help you develop your plan and outperform your competitors. The basic subscription is $119.95 per month, with other tools available as needed.
Crazy egg is a data-driven marketing tool. It shows a heat map of how customers interact with your website. You can see where your visitors click, tabs, or links on the website. This tool is a great option for data-driven marketers who want to improve user experience and web activity.
A last quick note about data-driven marketing
Technological advances made customer data accessible and easier to gather. Using data to aid our decision-making has always been part of the equation in other fields. This shift towards a data-driven focus on the marketing community brought a structured way to measure the effectiveness of marketing strategies. Data-driven marketing challenges managers to learn data management skills. Marketers must be aware of the implications of data-driven marketing and how it has changed the game.
