The Importance of Data In Powering Marketing Strategy
A few years ago, I ran across an article written by Greg Asman called “Data is a Fuel not a Strategy”.
In the post, Asman compared Big Data to Big Oil and asserted that what the two industries have in common is that they are about producing fuel that enables the production of an end-product or the formulation of a strategy. With the proliferation of data sources, this is more true today than ever before. However, that doesn’t mean we should all rush out and hire a bunch of “big data experts”. As Asman points out, what you really need are “data strategy experts”, people who understand how to “effectively stoke the flames that drive the business forward and not alchemists who store data like wildfire in barrels in the basement”.
Business leaders who have invested more into understanding their customers, gleaning insight from customer data, formulating more targeted marketing strategies and adopting strategic analytics, are exploiting more opportunities to sell and win in the markets where they compete. Any business that doesn’t use data in its marketing operations misses out on countless opportunities to achieve exponential growth and have greater impact with their marketing communications.
“You need data strategy experts who understand how to effectively stoke the flames that drive the business forward and not alchemists who store data like wildfire in barrels in the basement” -Greg Asman
When your marketing department sets out to launch a new product, there are several things that they have to understand. The only way they can effectively feature the selling points of products or services and form genuine connections with their target audience is through a series of extensive data collection and analyses. If you’re looking to learn more on this subject, check out this guide to structuring your data to measure your marketing activities and produce actionable insight.
So, how exactly does customer data make a difference for your business? Here are a just few examples of how data can be used to improve customer experience, increase marketing campaign conversion, and transform your relationship with your customers:
Personalize Your Campaigns – One of the best marketing strategies is personalizing your marketing messages to appeal to individual customer personas. Customers will appreciate messages that connect with them at a personal level. This way, they’re motivated to believe that the products are created to solve their problems and pain points. An effective way to personalize your marketing campaigns is by collecting customer data. The data will help you understand the different needs of your target customers. When your team sends marketing messages to prospects, they can then use the information they’ve collected and tell potential customers how your product will solve their problems. This encourages productive and profitable brand-customer relationships.
Direct More Focus To Loyal Customers – Even though a company may want to explore new markets and increase its customer base, it should also focus on retaining clients. After all, retaining customers who are already loyal to your brand is more cost-effective than looking for new clients to convert. Fortunately, customer data will help you identify the customers who have been with your business for a long time.
Using this data, you can then focus more on these loyal customers because they’re highly likely to continue buying your products and patronizing your brand. They can form a good testing ground for your marketing strategies as they better understand your business culture. You can then apply what you learn from your engagement with your existing clientele when you try new approaches with your prospects. Always remember that when you focus too much on generating new leads and neglect your loyal customers, you risk losing both of them. Let customer data help you identify your brand advocates and build your marketing strategy around them.
Improve Customer Experience – When launching products in the market, you need to provide your customers with a better experience than what they previously had with other products in the category. However, you can’t know how to improve their experience if you have no baseline to measure it against. A business that collects data through surveys can identify areas that need improvement. The marketing team can then focus on these customer experience opportunities as they reach out to clients, introducing them to a better experience with the products you’re offering. Anticipating, not just reacting to, target customer needs will help your business sell more stuff, more often for more money. Moreover, creating an excellent user experience helps you foster loyalty among your customers.
Better Customer Segmentation – Customer segmentation is vital in making more targeted communication to prospects and customers. You can divide your customers according to demographics such as age and gender or through behavioral analysis made through your online interactions with them. You can also segment your customers according to the frequency with which they make purchases from your business. When you segment customers, it becomes easier for you to group your marketing team so that each group can focus on a particular segment. They’ll then be able to better design messages and use channels that target that specific segment. This will achieve better results than handling all your customers as one large group.
Develop Customer-Centric Products – One way to ensure you stand a chance in achieving your goal of implementing a successful marketing campaign is by asking customers what they want. Through surveys, you can identify gaps in the market that customers would want to be filled. So, instead of blindly trying out different possibilities, you create the exact products customer need and fill the “white space”. Paraphrasing the great Peter Drucker, the aim of marketing is to use data to understand the customer so well that the product sells itself. By creating customer-centric products, businesses won’t have to struggle with marketing and convincing people that it’s the right product for their needs. People will readily accept your products because that’s what they’ve wanted in the first place. Moreover, when they spread the word about how good your product is, more people will buy it.
“The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.” – Peter Drucker
As Greg Asman suggested in his article, we all need to be “smarter about how to burn the data we have more efficiently and when it is worthwhile to gather more”. As a marketer, you must start with your market objectives and align data to them instead of trying to craft a brand story to support objectives with whatever data we have. Like fuel, data can burn hot and guide your brand story with pure truth, or it can burn cool and dance like campfires where stories of fiction are told. Used effectively, customer data will help you know what to do and when to do it. It helps eliminate the uncertainties that you face and enables you to analyze trends and make informed decisions about how to give your customers a reason to care, a reason to listen, a reason to engage, a reason to buy and most importantly, a reason to stay.