Whenever a customer interacts with your brand, they generate valuable data you can use to refine your marketing. Marketers use this information to build a data-driven marketing strategy. Companies using this strategy have reported better customer retention and higher sales compared to those that don’t.
Learn why a data-driven approach to marketing is right for you and how you can use it to create content and campaigns that let you speak to the right audience through the right channels.
What Is Data-Driven Marketing?
Data-driven marketing involves collecting information from customer interactions to gain insights into their needs and current behaviors. Using data-driven marketing lets you create an omnichannel marketing strategy that’s tailored toward your key customers. It also helps you keep your messaging consistent, improving the customer journey at every touchpoint.
The Benefits of Data-Driven Marketing for Your Business
A key benefit of using a data-driven marketing strategy is the ability to create a personalized marketing campaign based on data-derived insights. You can track key metrics to gain valuable knowledge of your target audience.
Use these insights to determine what makes you stand out from the competition. Define your branding around what makes you different to help improve your brand recognition. When you’ve honed your branding, you can create consistent messaging.
Create More Personalized Advertising Campaigns
This lets you better personalize ad campaigns, social media posts, content, and more to improve your chances of reaching and converting target customers. It also helps you put messages out through the right platforms at the right time. For example, your data might show more people opening your emails on Wednesdays than any other day of the week. You can then use that data to change your email campaign and promote sales and other events on that day.
Improve Customer Satisfaction
Successful data-driven marketing retains more customers through providing personalized experiences. 86% of customers surveyed stated that they are willing to pay more for a good customer experience, and 49% stated that personalized messaging had influenced them to make an impulse buy.
Increase Customer Loyalty
Looking through customer reviews and feedback surveys will help you identify weaknesses in your service delivery. You can use that information to make changes that strengthen your customer experience. Perhaps clients say that your website runs more slowly during peak traffic times, and it’s harder for them to checkout. You can use this insight to fix the problem, ensuring a better checkout experience for future customers.
By using data to personalize marketing messages and improve the customer service experience, you can generate and convert more high-quality leads.
How Does Data-Driven Marketing Work?
Your business likely uses a wide variety of channels to communicate with current and potential customers, and each interaction provides a wealth of data you can use to tailor your marketing strategy. Your objectives for data collection should include:
- Identifying the right target market
- Developing a better understanding of their needs and habits
- Identifying how you can solve buyer needs and pain points
- Creating marketing messaging that communicates this to your target audience
If you want to know how to do data-driven marketing, the first step is to make sure you’re collecting relevant data. If you’re not asking the right questions or gathering the right information from your marketing and customer service channels, you can’t properly customize your messages.
Current data is the most valuable data. You can collect it through your website and social media analytics, customer surveys, online reviews, in-store traffic monitoring, and subscription data. If you have more than one department collecting data, make sure they each have access to all customer analytics, eliminating the risk of duplicating data or creating data silos that don’t benefit your company as a whole.
Collect data from multiple sources for best results. If you’re only relying on customer reviews and surveys or social media analytics, you could be missing key information about your target audience — review data from all marketing and sales channels for the best insights.
Determine Your Goals for Your Data-Driven Marketing Strategy
Once you know where to collect your data, start figuring out how you want to use it. Are you planning on tracking customer complaints to find ways to improve service delivery? Do you want to know what made your repeat customers come back and purchase a second time? Are you interested in gauging which of your paid social media ads generated the most traffic to your website?
Knowing your goals will help you extract the right data. Your goals could include all of the above, in which case you would analyze your data multiple times from different perspectives to gain insights that let you address each of your goals.
Data-Driven Marketing Examples
If you’re still wondering how you can use data to tailor your marketing, consider these examples.
Satellite TV provider DirecTV found that one of the best times to target new customers is immediately following a move. To capture this audience, the company partnered with the United States Postal Service to collect data on people who had recently moved. It then launched a moving special and targeted this demographic in social media and television ads.
While DirecTV is still experiencing a decline in subscribers due to cord-cutting and other factors, it was able to slow the decline by 13% over 2020.
Lawn care company GreenPal is a yard care and maintenance company offering on-demand mowing, snow removal, and other lawn services. The company connects customers with lawn care professionals, saving them the hassle of calling around and comparing prices.
Recently, GreenPal’s marketing teams used data demographics to create Google ads targeting users across the Nashville metropolitan area. Initially, their ads were not targeted and received a clickthrough rate of 1% with a conversion rate of 10%.
GreenPal decided to target ads by using census data to determine average income and home values. It then tailored personalized AdWords ads for each area. In neighborhoods with lower income and home values, ads using headlines like “Cheapest Lawn Mowing in Nashville” were run instead of the more generic ads.
These segmented ads led to a 200% increase in clickthrough rates and a 30% increase in on-page conversions.
Online dating has emerged from the fringes to become one of the primary ways couples meet. As such, there is a lot of competition between apps trying to connect people and forge relationships. OkCupid recently used customer insights to develop an ad campaign promoting inclusivity.
OkCupid routinely improves its product based on customer insights. When marketing leaders noticed more users identifying as pansexual, bisexual, non-binary, and other demographics, they improved the platform to help these users feel more welcomed.
To communicate the wealth of dating options available to customers, OK Cupid created an ad campaign featuring many different romantic personality types to communicate its inclusivity to potential users.
Marketing software company Simplero used existing customer analytics to solidify its unique value statement and better craft its messaging. Before the company switched to a data-driven approach, Simplero ads referred to potential customers as “leaders.”
However, this language was unclear and confusing to potential customers. Not only did previous ads not appeal to the company’s target audience of coaches, consultants, and entrepreneurs, there was no language communicating what the company could offer them.
Simplero used client insights to tailor its marketing message, developing a more detailed tagline highlighting how each of its core customer types could use the platform to improve their businesses.
Using traditional marketing strategies, luxury retailer Versace learned that the bulk of purchases consisted of entry-level items, lower-priced items. The company analyzed its most valuable customers to improve engagement and increase sales.
By creating user personas based on their data, the company created marketing campaigns that led to a 35% increase in online sales with a 300% increase in the average order value.
How You Can Use Data-Driven Marketing
Firstly, you can use data and customer insights to plan your marketing campaigns. Like the businesses mentioned above, you can use this information to develop user personas and create digital campaigns that speak to your target audience.
Demographic data and other insights will help you refine your marketing messages to appeal to the right user base. In the GreenPal example, the company personalized its Google Ads. Instead of targeting all people in Nashville, they targeted homeowners who might not have an extensive budget for lawn care but who would still be interested in having a professional tend their yard.
You can similarly segment your messages through different channels. Google AdWords, Facebook ads, and other digital channels let you choose different targets for your ads. Use your customer analytics to identify your core demographics and create segmented ads that appeal to each. If you run an email newsletter, segment those customers and send out blasts with deals and content that appeals to them.
Learn From Your Ads
Data-driven marketing isn’t something you just do once and stick with over time. Consumer behavior is constantly changing, and you need current data to keep up with their needs and habits. One way to collect data on current user behavior is to learn from your ad campaigns.
Once you’ve launched data-driven campaigns, use the results to inform other marketing channels. If you’ve run a digital ad, look through the pay-per-click statistics to see which headlines generated the most traffic. Use this information to create content that resonates with your target audience.
Use Successes to Create Future Goals
Analyzing your ad campaigns allows you to understand which techniques work. Celebrate your successes and use them to develop future advertising campaigns. Use your consumer insights to more accurately predict future behaviors. If you find that your revised marketing tactics are consistently meeting your site traffic goals, aim higher.
You might decide that you want to improve your conversion rate now that more people are clicking through to your website. Set a specific goal, such as improving conversions by 10% in quarter 3, and then start developing strategies you can use to achieve it.
Make Sure You’re in Compliance
Customers are increasingly concerned about their privacy. Most companies have promised an ongoing commitment to client security, which could potentially impact your ability to track relevant client data. While the landscape is changing every day, customers are still interested in personalization.
Be responsible with customer data. Use your marketing campaigns to clearly communicate how you provide value for various customers. When people sign up for your email newsletters and social media feeds, give them a way to opt-out and honor their decision if they do. Don’t bombard customers with information — instead, use each message to clearly describe the benefits and advantages you can offer them.
Refine Your Budget
There is plenty of software on the market to provide you with insights into your customers. Some of these tools are great, but they can be pricey. If you are committed to data-driven marketing, increase your marketing budget for analytics reports. Shop around to find the tools that best fit your needs and your budget.
How to Get Started
If you’re ready to implement a data-driven marketing strategy, get started by coming up with a list of goals. Through establishing goals, you’ll have a better understanding of what data-driven marketing tools you need.
Soon, you’ll have a better understanding of your customers, which you can use to create marketing strategies that appeal directly to them. With all the consumer data available at your fingertips, you no longer have to create ads blindly and hope that they engage the right customers. You can use the tools at your disposal to develop well-informed ad campaigns that will offer you a better return on investment.