Data-Driven Marketing: Strategy and Metrics
Marketers have been in back-to-back crisis meetings over the past few years. Hackneyed solutions reached a dead end — a long time ago. Consumption patterns are erratic, and brand loyalty is fluid like never before. For these and other woes that bedevil the marketing department, experts preach one solution — data-driven marketing.
What Is Data-Driven Marketing? Why Is It Important?
This is using customer information to optimize business advertising and marketing communications. In data-driven marketing, marketers collect consumers’ data and run them through data analytics tools to predict what the buyers need, why, where, and how.
Data-driven marketing is used by many brands to better segment their audiences. When brands have the right data, they can identify which consumers participate in their marketing efforts, identify the best channels and narrow down the times of the day customers are most receptive.
In addition, through data-driven marketing techniques like A/B/n testing, brands can test-drive twin campaigns and choose one with the best reception among customers. This saves companies a lot of money in the long run and guarantees a bigger return on investments.
A key advantage of data-driven digital marketing is personalization. Brands can now create personalized marketing strategies using the data gleaned from customer interactions. The end goal is to maximize the return per dollar of advertising.
When businesses gather and analyze customers’ data, they can discover trends and customer needs. The new information then helps to determine what kind of advertising and selling methods to employ.
A daily life example of this is OTT platforms. To suggest other movies, films, music videos, and videos to their subscribers, Over The Top media platforms such as Netflix and YouTube constantly analyze their customers’ preferences.
Data-driven marketing also played a significant part in the Lion King campaign’s success. In November 2018, more than 2M mentions on social media as well as more than 5,000 media mentions revealed the importance of highlighting James Earl Jones’ return!
How to Build a Data Driven Marketing Strategy?
The challenges of data-driven digital marketing are also numerous. Many conditions must be fulfilled for such a strategy to work effectively. The most crucial step is to build a foolproof data-driven marketing strategy—for this, you need to map out your sales funnel, find the right data-driven solutions and assemble a competent team, including professionals who specialize in audience amplification or predictive analytics.
The main actions in designing a data driven marketing plan are:
- Find your target audience. Identify who your target market is in this section of the project. You will need to specify demographic information such as location, age, gender, and interests of your target audience.
- Define goals. There are many potential objectives you can choose from, such as increasing sales, growing brand awareness, driving more traffic to your website, or improving customer satisfaction.
- Collect data. You can get data from your CRM, sales histories, message applications, and customer survey results. If you are looking for a tool to unify profiles and store customer data in one place, pay attention to a Customer Data Platform (CDP).
- Analyze data. According to Forbes, almost 36% of companies do not use their big data to the full extent, and 47% plan to introduce a data analysis tool in the future. You need to analyze the harvested data to identify the answers to your research questions.
- Implement the insights. After the data-driven analysis follows implementation. This stage uses insights from digital marketing data to optimize the customer journey. Study findings show that 80% of respondents prefer companies that offer personalized experiences. This is possible through data-driven content distributed across different channels.
- Analyze results. The data-driven approach requires regular and rigorous measurement of results. Tracking the behaviors of your customers is the only way to tailor your strategy to their needs. Remember to keep testing after reviewing the first results and refine your campaign approach as appropriate.
Data-Driven Marketing Metrics
Do not fly blind. For your company’s data-driven strategy to succeed, it is essential to select key performance indicators (KPIs). These are the crucial data-driven analytics metrics that warrant your precious attention, efforts, and finances as a marketer.
Your business has a lot of opportunities to convert traffic (website visitors) into customers, so it’s essential to measure your traffic month after month. Setting realistic conversion goals can help you achieve them.
What is the source of your website visitors? Your website may receive traffic from various sources, including organic keywords, direct traffic, links social media, or email. Focus your efforts on your biggest source of traffic.
- Return on investment (ROI)
Simply put, calculating your ROI means answering this question: did we make a profit after all our marketing expenses? You can calculate ROI by subtracting expenditures from gains.
- Customer acquisition costs (CAC)
You can measure how much money your strategy costs per customer to convert. Customer acquisition costs can silently destroy your business if they are too high.
- Customer lifetime value (LTV)
LTV represents a customer’s lifetime spending capacity on your product. As a result, this can be a powerful metric to help you decide how much money to invest in customer acquisition – if you spend more than you earn, you’ll lose money.
A company’s customer churn rate means the number of customers who leave the company. This metric is also known as the customer rate of attrition. It is critical for digital marketers to track this measurement as it is a litmus test of marketing efforts.
- Customer satisfaction (CSAT)
Customers’ satisfaction is a metric that shows how pleased customers are with a company’s products or services. With this data at hand, marketers can improve customer experience or feedback insights to teams in product design. There is nothing better to find out if the client is happy with your product than to ask him about it. That’s why it’s really important to collect customer feedback correctly.
A data-driven marketing approach can lead to extraordinary business growth. Big data is captured, marketing metrics are used, data science and analytics are harnessed. Success follows soon!
Originally published here.