Data-driven marketing is one of the marketing methods; Also called data-driven marketing, this method uses information or data obtained through customer interactions and from third parties to provide better insight into customers’ motivations, preferences, and behaviors. Data-driven marketing helps companies optimize their performance, which leads to greater revenue and profit. While using a data-driven marketing approach was once rare, many niche and evolving media channels have made data analysis an essential process in their marketing campaigns.
Today, marketing teams collect data using various applications or websites; Based on this data, organizations can enhance their campaigns to ensure the best customer experiences and the highest return on investment. In other words, data-driven marketing is when marketing teams build strategies based on big data analysis. This analysis provides insights into customer preferences that influence the success of a marketing campaign.
How does data-driven marketing work?
Data-driven marketing collects data and uses it to target the best possible customers for your business. This data can be collected in a variety of ways, including website data, mobile phone data, email data, telecommunications data, and location data. Once you have this data, data-driven marketing helps you determine what types of people are likely to be interested in your products and services and how you can best serve them. With data-driven marketing, companies can make decisions about everything from advertising to product promotion.
Because data-driven marketing is based on real numbers, it gives all businesses using data-driven marketing an edge over their competitors. When data is collected and used effectively, it helps businesses reach their target markets, understand what products or services to offer, and how to appeal to specific customers and increase profits. Data-driven marketing is becoming more important as it becomes easier to collect and analyze data, so if your business isn’t already using data-driven marketing, you should start now. This method is a successful future for businesses.
What is the difference between data-driven marketing and traditional marketing?
Traditional marketing can be expensive and waste your money. Data-driven marketing eliminates the risk associated with traditional marketing strategies because it provides fast feedback methods and allows you to test different approaches before making changes; This means that data-driven marketing helps you see which ideas work well for which group of people, for what purpose, and when; Also, you spend less time finding the most profit for your company.
A data-driven marketing approach generally gives consumers a better experience, increasing the likelihood of repeat purchases. In addition, data-driven marketers can communicate more directly with their target market than traditional marketers.
Let’s compare both closely to understand the difference between traditional and data-driven marketing. The focus of traditional marketing has always been to identify the needs and wants of existing customers, the main feature of which is to understand the audience, discover their needs and develop strategies to provide a product or solution that solves their needs and problems. To achieve these goals, traditional marketers can only rely on their assumptions about their customers. Therefore, this marketing tactic is often based on trial and error.
On the other hand, data-driven marketers can connect with customers with the right offer at the right time. Modern marketers can target a specific audience, personalize the customer experience accordingly, acquire new customers and improve the company’s marketing strategies in real-time. Data-driven marketing eliminates the need to launch multiple campaigns to identify the problem customers are facing.
What are the benefits of data-driven marketing?
Modern consumers are inundated with brand messaging. As a result, marketers have learned which messages consumers will be drawn to. When marketing teams employ a data-driven strategy, they can greatly increase the chances that their target audience will click on their ad, join their webinar, read a blog post, or take another action that leads to a conversion. The audience is looking for a buyer.
Data-driven strategies improve the customer experience because it gives organizations a better understanding of consumer needs and interests. They also improve the conversion rate of a target customer to a consumer or buyer, as targeted messaging enabled by data-driven marketing is more likely to attract users’ attention. About ten years ago, only a handful of companies aware of a data-driven marketing strategy were using it; It can be said without a doubt that now these companies have surpassed their competitors and have acquired more shares. Of course, more and more businesses are using this strategy to optimize their campaigns these days. Below are some of the advantages of this approach:
Personalized and targeted campaigns
Perhaps the biggest benefit of data-driven marketing is the increased ability to create targeted campaigns with personalized messages; The data gives the marketer insight into each customer’s behaviors, interests, lifestyle, and online activity. A study from McKinsey found that data-driven personalization leads to a higher return on investment than marketing spend. In addition, optimal delivery times increase overall engagement success and effectiveness, Which means data can guide you and inform you where and when to post ads and marketing materials.
Multi-channel experience
Data can be used in many communication channels. When you use data, you can extend your reach across many communication channels. Customer experience ensures that messages remain consistent and consistent. The data can also help marketers determine which channels to use to target their customers.
Simple division
Segmenting customer experiences based on behavior and action allows you to target customers more easily. Explore your data to discover the most accurate and actionable information. As a marketer, you know that you can’t send the same messages to everyone or use the same marketing tactics to all potential customers; Rather, each needs specific marketing messages to move them forward. Segmenting potential customers’ behaviors, habits, and demographics can help you organize them.
Know your customers in advance
Data-driven marketing can help you get to know your customers before they buy a service. Data can alert you in advance to your customer’s interests and preferences, so you can target them with great messaging that grabs their attention and convinces them to do business with you.
Improve your product development
Data can inform you about your audience’s needs and wants before taking action. You will have better success when you tailor the value and features of your products to what consumers are looking for. You may think you’ve created the best product in the world, but if no one needs it, you’re left with a warehouse full of manufactured products! Data-driven marketing greatly reduces product failure rates.
When you understand who you are serving, you can develop products that meet their specific needs, and your products will sell easily.
Provide a better experience for your customers
By paying attention to the experience of your potential audience, you will bring more sales and revenue to your company and provide a better shopping experience for your customers. Consumers receive numerous emails (or print ads in the mail) every day, most of which go straight to the trash bin; Because people don’t want to waste their time with advertisements that are not interesting to them.
Meanwhile, data can tell you much about your audience and what kind of advertising and marketing messages they care about. This data can be collected through customer satisfaction surveys. When your customers see that you care about their experience with your brand, they will be more loyal and more likely to do business with your company again.
Increases sales opportunities
Data-driven marketing can give you the information to turn prospects into leads and make sales faster. This data also helps you see sales opportunities that have not been seen before. Data can provide you with information and ideas to keep customers engaged after the purchase. This after-sales relationship can lead to loyal and consistent customers who will make more purchases in the future.
Have more personalized marketing
Successful marketing requires communication and timeliness. When you reach the right customers at the right time with the right messaging, you will successfully convert them into consumers. Once you know your ideal customers, you can implement specific marketing messages and tactics. Data can also give you insight into weak areas of marketing so you can improve them.
Data-driven marketing focuses on using deep consumer behaviors to improve the customer experience. This is essential to the success of a data-driven strategy; for example, almost no users will tell you that they leave your website because of a poor experience in purchasing a product compared to another site. Augmented personalization by data-driven marketing builds trust between consumer and brand while creating positive customer experiences and can have great results.
Why is data-driven marketing important?
Undoubtedly, people have preferences that guide their thinking and behavior. A company that pays attention to people’s priorities and preferences has a high chance of converting potential customers into consumers. For example, a lawnmower company distributes flyers to find new customers in a metro area but receives little response, and less than 5% of them become new customers.
Realizing that data-driven marketing might improve these results, the company researched and discovered an area where homeowners’ incomes were about 10 to 30 percent below the median income for the entire metro area.
Another group sends flyers to the area emphasizing low-cost services and attracts six times as many new customers. This company has used data-driven marketing. By understanding data-driven marketing, businesses can tailor their sales and marketing strategies to actual customers so that services are tailored exactly to what customers want.
Data-driven marketing provides a clear insight into how well your marketing activities perform. Marketers need data for everything from customer presentations to reporting to company leadership. Here are a few reasons why data-driven marketing is important:
Data-driven marketing helps you reach the right people
As a marketer, you want to find those customers who will buy from you and become loyal, repeat customers and brand ambassadors to their friends and family. Many marketers use it to get information about each person, the website, or the stores they visit. Online marketing analytics tools can provide valuable demographic information about your users’ online habits and website interactions. So, data can help you find your ideal customer.
Data-driven marketing is the future of marketing.
Data-driven marketing helps a company increase ROI and sales through the vast information marketers can obtain about potential customers. Today, many companies prefer their marketing teams to be data-driven, and this trend will continue. This, in turn, increases their sales and return on marketing investment.
In the coming years, all marketing will be data-driven. Companies that can use the information they collect about their customers will have the edge over their competitors. More importantly, the brand loyalty that data-driven marketing encourages will pay off handsomely in the future, At least until another disruptive technology comes along.
Data-driven marketing helps you know what works best.
Data-driven marketing can provide an accurate and unbiased evaluation of the performance of your marketing tactics, strategies, and campaigns. When you know what areas of your marketing have been successful and what areas need improvement, you can save time and money, and you won’t waste resources on marketing tactics that produce poor results. You also know which areas of your marketing have a high conversion rate from potential customers to consumers, Which allows you to use your resources better.
Data-driven marketing tells you where your customers are
Have you ever wondered how people find out about your company’s website or store? Marketing data can help you answer these questions about your customers. With marketing automation and analytics tools, you can learn from which website people came to your website. It is the same with social media. Knowing which website and social media platforms each customer visits and the days and times when the user is most likely to be there can help your marketing and advertising campaigns.
Data-driven marketing can share the value of your team
Want to demonstrate how much ROI your team generated last year so the CEO can increase your marketing budget? Data not only creates beautiful and neat charts but also conveys this valuable information in a clear, concise, and powerful way.
How is data used in data-driven marketing?
Savvy marketers who use data-driven marketing have found many ways to use the data that underpins their marketing efforts. For example, if you run marketing campaigns on different channels, the data can be used to determine which channel performs best at which stage. The Weather Channel sells advertising space to companies by analyzing the geolocation of 3 million website visitors. Companies can buy advertising space for target audiences. For example, shampoo companies that sell anti-dandruff shampoos can directly target potential customers in humid climates.
Or for example, Walmart wanted to know what results in consumers were trying to find when searching on Walmart’s website. What was searched for was data that Walmart could use in data-driven marketing? Hence, the company used artificial intelligence and machine learning to analyze that data to offer the products they were most likely looking for. It led to a 10-15% increase in the target customer acquisition rate. As a third example, consider Netflix; Netflix and its competitors, as well as companies like Spotify, analyze and recommend movies and music based on past customer preferences.
How to create a data-driven marketing strategy
Marketing experts agree on the steps to implement a successful data-driven marketing strategy. Without data-driven marketing, your team won’t be as efficient as they could be. It can be said that all the things we have mentioned below are steps that almost all marketing leaders and analysts consider important.
Use data to identify goals.
You can’t have a great marketing campaign without a goal. Data from previous campaigns can provide baseline measurements for a new campaign. Your goal is to beat last year’s records. Data can provide areas where you have excelled and areas that need improvement. In addition, the data can show how effective your marketing campaign is with all the progress made.
Consider, for example, a restaurant chain that wants to sell more of its specialty steak. Looking at last year’s campaign numbers, the marketing manager can see that the customers most interested in the steak special are middle-aged Caucasian males who order steak at a business meeting or a romantic dinner. Thursday to Sunday evenings is the most popular times to order steak. Based on these numbers, the restaurant can achieve this year’s campaign goals. The restaurant expanded its steak specials for lunch and weeknights to reach last year’s goals.
Use data to make budget decisions.
Most likely, your organization has a specific budget for each department. The marketing team works to reduce that budget. Data-driven marketing provides your CEO, CFO, and stakeholders with concrete evidence of the ROI and value of your marketing activities. When you can provide data that shows you’re increasing the company’s profitability while spending less to get it, your chances are better. Data can show management costs per customer acquisition, open email rates, click-through rates, website page views, number of purchases, and more.
Use data to tailor marketing efforts.
As mentioned earlier, data-driven marketing can tell you a lot about your prospects before, during, and after they purchase your product. Here are a few ways that companies have used data in their marketing to generate marketing tactics that are tailored to each of their audiences:
Personalized email campaigns
One of the most effective marketing methods is email marketing. If an email doesn’t grab the recipient’s attention, seems impersonal, or is irrelevant, it goes straight to the trash without being opened. Organizations, especially non-governmental organizations, use personal and emotional emails to appeal to people. Data about your customers helps you understand what they care about and what they care about. Data can guide your email marketing and lead to emails that deliver the right message at the right time. Reviewing the data will give your emails a better chance of standing out.
Retargeting
Data can help you retarget customers who have already bought from you. You can show past customers ads relevant to their purchases and likes through data. Many large online stores are adept at using data for retargeting. Take a look at the Digikala store site. After purchase, other products related to your purchase will appear below as “Recommended items that others have purchased.”
Landing page
Many companies have used landing pages to collect more marketing data. For example, a neighborhood beauty salon creates a landing page with a special offer, such as 50% off manicures. The beauty salon owner knows their customers and uses the data to send an enticing email, similar to Facebook ads or website content. Once the user has filled out their information, they may be taken to a landing page to withdraw their offer, but their information is recorded and can be used as data.
Data-driven marketing is critical to the success of any marketing campaign. At every stage of the buying process, it informs you about your customers and provides them with the right information at the right time, helping them transform from prospects to customers. Data-driven marketing can help you build more valuable relationships with your customers, better adapt to their changing tastes, and help your company better compete in a changing market.