While technology has revolutionized every single industry, marketing remains that one domain that has experienced a fundamental shift due to technological advancements over the past two decades. Today, marketing is all about providing a customized experience to each customer, and in order to so, marketing professionals rely heavily on customers’ data. This is where data-driven marketing comes into play. Data-driven marketing fulfills the business need of providing customers with a truly optimized and personal experience by utilization of large volumes of customer data that is available to almost every organization today. In this article, we are discussing the basics of data-driven marketing, including its definition, benefits, and how a marketer can develop a data-driven marketing strategy to drive business growth and customer satisfaction.
What is Data-Driven Marketing?
The definition of data-driven marketing is not very different from the traditional definition of marketing, except that it emphasizes on the importance of establishing a connection with a customer. We can define data-driven marketing as, “Data-driven marketing is a strategic activity that utilizes technology to better understand the needs and behaviors of the customers, to provide meaningful answers to those needs, and to help businesses connect with their existing and potential customers.” Data-driven marketing has made decision-making easier for marketers. Today, marketers have access to customers’ data which they can analyze to identify trends and patterns and predict customers’ behavior and needs.
What are the Benefits of Data-Driven Marketing?
Data-driven marketing is of great importance in an era where customers expect businesses to offer customized products and services to them. It’s not just about sales prospecting. As a matter of fact, the primary application of data-driven marketing is to improve the customer-business relationship by providing them the content they’re looking for. A great example of how data-driven marketing can enhance customer satisfaction is of Mattersight. The company leverages on the data analysis capabilities of its advanced database that uses algorithms to match a customer with a sales representative that complements their communication style and behavioral characteristics.
How Can You Develop a Data-Driven Marketing Strategy?
The sheer amount of customers’ data that’s available to businesses today can overwhelm any marketing professional. By developing a data-driven marketing strategy, marketers can make the quantification and analysis of data easier and draw useful information from the data in order to make real-time decisions. Here is a 5-step process that can help you develop a data-driven marketing strategy for your business.
1. Centralize Your Data
In order to develop a better understand of who your customers are and what are their needs, marketers need to integrate all the customers’ data that they collected online into an offline centralized database.
2. Analyze Customer Data
Once you’ve developed a customer database, you can use the data it contains to paint a picture of your customers and make well-informed marketing decisions. You can use this data to:
Segment your target audiences.
Identify the most valuable segments.
Develop marketing messages that your customers can relate to.
3. Determine the Optimal Marketing Channels
In order to earn maximum returns from your investments, it is best that you classify your customer segments on the basis of ROI they are likely to deliver and choose the marketing channels accordingly.
4. Execute the Campaign
Make sure that you have a proper plan for execution of your marketing campaign. Use data to determine the right time and place for placing an ad. Optimize your results in a real-time manner to drive superior value.
5. Measure the Effectiveness and Make Changes
In order to better understand the results obtained by the marketing efforts and to improve the future strategies, use a data-drive lens to look back on your campaign. It can be rightly said that data-driven marketing is the future of marketing. Make sure that your marketers are making optimal make use of customers’ data to drive customer engagement and revenue.