In theory, data driven marketing is about putting customer related data in optimizing and integrating marketing efforts. At the end, it’s all about being able to optimize the customer experience, his relevance and perceived value of the brand/business.
If deployed well, data could bring about huge growth in digital marketing transformations and connecting customers to the brand. A 2015 report by Teradata suggests that there has been dramatic growth in the way marketers, companies and brands are “deriving business value from data”.
One of the key findings indicates that 90% of modern marketers look to step beyond segmentation and towards a “one-to-one” personalization. Data promotes accurate and faster decision making wherein two-third of the respondents cite more accuracy and speed. In 2015, 78% marketers had used data wherein the number was just 36% in 2013.
Marketers have in fact been using customer data in various ways for some time now. However, the convergence of modern technologies and tools has changed the game completely.
Today, marketers have access to even individual transactional level information that can be used to match a specific customer’s exposure to ads and other marketing activities. Given the above facts, it is also disappointing that data is still being used by many in a piecemeal fashion, without understanding the full advantages available.
As Bruce Rogers, Chief Insights Officer and head of the CMO Practice for Forbes Media, aptly stated, “Effective data driven marketing draws on resources from across the enterprise and not a singular department.”
Measures That Drive Data Enabled Marketing
Data-driven marketing ensures that organization not only get to identify the best strategies and resulting campaigns but also secure their investment and buy-ins by demonstrating the ROI from impending campaigns.
In simple words, if a marketing department seeks to be data-driven, ROI measurement should be at the fore. Businesses, however, face several obstacles that can undermine the potential. They may include:
- Inability to access necessary data that accurately measures ROI since the data has been held in silos
- Inability to collect the right type of data from channels including mobile, web, social media, SMS, print, etc
- Failure to analyze data to arrive at sufficient insights
- Undermining the associated marketing costs
So, what would be the right steps to ensure that data is put to maximum use?
Setting SMART objectives
SMART here stands for “Specific, Measurable, Achievable, Realistic and Timely”. The choice lies in whether you are looking to increase your revenues and profitability or increase your brand retention or build brand equity, brand awareness and a brand identity.
The payback in each case varies in duration, but businesses need to ensure that they have set a realistic timeframe for the ROI measurement.
It is highly necessary that you identify what you want to measure and how. This involves experimental testing to ensure that the campaign response rate is backed by a high level of statistical confidence. Also, it is important that the data collected is consistent, continuous, comparable and comprehensive.
Small test campaign / pilot campaign
Pilot campaigns or beta testing in a limited division of the demographics will help determine how the campaign is playing. It is after this initial success that you can choose to make a larger investment.
Analysis and review
Experts advise us to zealously collect data to analyze it and gain detailed insight into performance. It is also necessary to periodically collate the information to create a “holistic” story. Stakeholders could act as perfect commentators in this step.
To fix things that are not working, successful brands change and experiment with their “calls to action” and channels. This evaluation will inform the marketer to understand improvement and the needs of redeployment.
Redeployment and scaling up
The moment you realize the success formula catering to your industry and target demographics, it’s time to start investing more resources. Adoption of a “test and learn” policy will gradually raise the bar of ROI effectiveness over time.
This should help you answer questions like:
- Should I invest more in Facebook advertising?
- Should I plan a daily deal?
- Should I include press in my campaign promotions?
- Do direct mails do any good to my type of campaigns?
Another thing that may complicate ROI measurement further is whether the marketing goals are in line with the company wide goals. It has indeed become harder now to measure ROI, since it requires to be aligned with sales ready leads.
Marketers consequently require having a singular and consistent view of how to describe the customer and especially who is a “high valued customer”.
Organization can break down the silos between departments and bring data from all of CRM, marketing automation, finance, and service into a single view and agree on commonly shared definitions.
This also puts forwards a single source of trustworthy and workable data, allowing long term decision making for the company.
Catalysts For Data Driven Marketing In 2016
Most organizations are looking for actionable and data driven marketing catalysts to improve their performance and focus.
Invest in a scalable database program
This would provide information into what customers bought, how much they bought, when they bought and their frequency of buying. It connects these transactional data to the individual experience.
Methodically ID VIP and ‘Gold’ customers
A smarter database helps identify special customers that would be a long term asset for the brand. Keeping them happy through personalization, than using multiple but scattered targeting, will give you more returns.
Targeting customers with the “next most likely purchase”
There are several times when you know that the customer will come back to buy again. Take, for example, a novel that has an upcoming sequel to it. Calculating purchase patterns such as these can create more effective sales opportunities.
Targeting customers with the “next most likely product”
Someone who has bought a punching bag, is also likely to want to purchase boxing gloves or other related fitness gear.
In the “Age of Information”, Big Data is a crucial component of your marketing plan. For marketers, every small shift is important and needs to be calculated. Big Data gives us the tools to do that.