Why Data Driven Marketing Is Important?
In the technology-infused marketing scenario of today, there really is no alternative to optimizing your product or service offerings, as well as the shopping experience, for your customers’ specific needs.
A personalized, smart, and easy customer journey is no longer a novelty but something that’s expected by default from any business and brand.
According to a survey conducted by Invespcro, 64% of marketing executives strongly agree that data-driven marketing is crucial in the economy.
This perspective has developed over recent years in marketing across different business domains through experiencing the benefits of utilizing data in marketing and also on account of the supporting technology evolving at an unprecedented pace.
The results look promising too: 75% of companies experience increased engagement when they use data-driven marketing, according to Hyper Island.
Let us look at a few ways in which you can use data to improve upon your marketing efforts:
Improving the customer experience
Staying ahead of your competition by delivering the best experience to your customers requires you to first understand these customers, and your best bet at doing so is a data driven marketing approach.
Collecting relevant data from your customers and then analyzing it in the context of your business KPIs can provide you invaluable insights about the way you can improve the customer journey.
Data captured from the various touchpoints during a customer’s journey on your website or app from the first interaction all the way to the conversion step can help you understand customer behavior at each touchpoint and accordingly strategize your marketing.
So for instance, if you observe a high bounce rate at a specific step during the journey, you can make the UI more instinctive for that step, or alternatively, you can choose to altogether omit the step and make the process quicker.
The 1:1 email strategy adopted by Coach New York, for example, enabled them to connect better with customers by matching each customer profile to modeled attributes and data-driven insights so that categories could be identified for the selected audiences.
Developed and implemented by Epsilon, this strategy resulted in performance lifts across the board, including a 9.5% lift in site visitors, 3.1% lift in revenue per recipient and a 3.7% lift in AOV across both online and offline conversion activity.
According to The Global Review of Data-Driven Marketing and Advertising, 53% of marketers claim that there is a high demand for customer-centric communication.
Another statistic along the same lines from Invescpro points out that businesses that used data-driven personalization as a part of their marketing strategy delivered 5-8x times more ROI on marketing spend.
There is no doubt about the fact that personalization is profitable for businesses. Apart from building a rapport with the customers by giving a human touch to the brand communication, data-driven personalization also makes the message more relevant for them.
For example, the clothing brand Very used customer data to recommend them products according to the weather at their location:
In addition to building Very’s reputation as an innovative brand, this marketing move also made the customers feel individually connected to it, thus contributing a fair share towards ensuring customer retention.
Recognizing channel relevance
Despite all the buzz around omnichannel marketing, a large number of businesses continue to simply upload the same content on every marketing channel and for the most part ignore the huge role that data could play in deciding their marketing strategy.
However, depending upon the nature of a business, the communication of a particular campaign, the target audience, and many other factors, different marketing channels may be optimal for different purposes.
A data-driven approach helps you recognize which channel is yielding the best results (conversions and engagement) for your campaign, thus helping you make decisions related to your marketing budget.
For a better idea about how this could play out practically, consider this infographic based on a ScribbleLive survey:
In addition to the analytical data from the different platforms on which you are doing marketing, customer data contributing to user personas could also play a role in recognizing the relevance of various channels for you.
For example, a brand that knows on the basis of its customer data that it enjoys maximum engagement with people in the age group of 25-40 would find it more profitable to choose the marketing channel which has a wider user base in the same age group.
Rewarding loyalty in a better way
Using data-driven marketing, a business can find it much easier to reward its loyal customers in a way that makes them feel special and cared for.
One of the most common ways businesses implement this is to use data for bringing personalization to a loyalty program.
Sephora, for example, uses customer data to wish their rewards program members on their birthday and goes the extra mile by giving them personalized presents and in the form of special deals and perks.
Using data and technology to provide your customers with a more human experience may seem like a paradox if you are new to data-driven marketing, but industry leaders like Epsilon regularly adopt this approach and gain extremely successful results.
Also, loyalty programs do not just utilize the benefits of data driven marketing, they can also help provide you useful data.
It has proven to be an effective means of tracking purchases and analyzing your target group’s buying behaviors or patterns because they provide an efficient way to track purchases and use this data to monitor the promotions and incentive schemes to which the customers respond most favorably.
The sooner you adopt, the better you can adapt
Easing into a strategy that makes use of data driven marketing trends to improve and optimize different aspects of your business can bring a lot of positive transformation your way.
The scope of these aspects can vary from something purely tangible like improving the content of your communication based on the analytics about customer engagement to something like making your brand identity more diversity-inclusive based on demographic data.
Implementing plans for a data-driven marketing strategy as soon as possible ensures that you start gaining experiential knowledge about the unique way your business can use the general insights discussed above.
Also, a well-executed strategy can be a source of reliable data in the future and serve your business as a self-sustaining marketing model.