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Understanding Data-Driven Marketing and Its Benefits

May 26, 2021 10 min read

Today, to develop the most effective marketing strategy, marketers need to rely on Big Data. It is usually based on answers to questions like 'when', 'who', 'what', and 'where', which then allows marketers to create repeatable, scalable, and profitable marketing processes. In this article, we covered the most important things you need to know about data-driven marketing and why is it vital for the success of companies and businesses in all industries.

What Is Data-Driven Marketing?

Long story short, it is a set of tactics and techniques that use a large amount of data obtained through customer interactions. This data allows them to better understand customer behaviors, preferences, motivations and develop effective marketing plans.

This valuable data is imperative for businesses of all types, as it helps them improve their marketing strategy and customer experience, which then results in greater revenue. Thanks to customer data, marketers can predict their goals and future actions, as well as develop personalized marketing strategies that would bring the highest ROI.

To understand it better, let’s compare it to traditional marketing.

Traditional Marketing vs. Data-Driven Marketing

The focus of traditional marketing has always been to identify the needs and wants of targeted customers. This tool's main feature is to understand the audience on a deeper level, discover their needs, and develop strategies to deliver a product/solution to meet their needs/solve a problem.

To accomplish these objectives, traditional marketers could only rely on their assumptions about their target customers and the market research available at the time. However, this marketing usually meant trial and error. Organizations had to launch multiple strategies to identify one that would help them achieve their goals.

On the other hand, data-driven marketers are able to connect to customers at the right time with the right offer. Thanks to customer insights, modern marketers can target a specific audience, personalize the customer experience, acquire new customers, and improve the company's marketing strategies in real-time.

Why Is Data-Driven Marketing Important?

Nowadays, nobody wants intrusive and irrelevant ads in front of them. It's annoying turning users away from a business offer or brand, leading to marketing failure. However, marketers who use a data-driven strategy significantly increase the likelihood that their target customers will take the desired action, such as joining a webinar, making a purchase, clicking on an ad, or reading a blog post. 

Analyzing and interpreting customer data and digital profiles of individuals helps companies understand customer needs and desires to improve brand perception and customer experience. Data-driven strategies allow highly targeted engagement and better conversion rates.

Thanks to this marketing approach, marketers can target the right audience, grab their attention and give them what they want at the right time. This means a higher ROI.

Key Benefits of Data-Driven Marketing

The most important benefits of this marketing approach include:

Improving customer experience – By using in-depth consumer profiles, marketers can personalize customer experiences, thus building trust between the company and the consumer. As a result, they create a better customer experience, which means a higher ROI.

Optimizing marketing attributionAnalytics tools used in data-driven marketing allow marketers to identify the portion of the ad budget that has the greatest impact on brand awareness or conversions. By seeing what moves potential customers and existing customers down the funnel, companies can properly allocate a budget.

Creating relevant copy and content – By gaining insight into the type of copy, visuals, creativity, and content that targeted users prefer to engage with, marketers can deliver the right message at the right time. Data-driven marketing helps marketing teams discover the types of content and messages that resonate with their audience, helping them better understand prospects and make effective product decisions.

Discovering the best channels for promotion – Data can also help marketers find out which channels they should use to target their customers. This information can help them position the ad or message where the target customers are now or will be later.

Making better decisions – Decisions based on data rather than gut feelings are always better, especially in marketing.

Personalization - An Important Aspect of Data-Driven Marketing

It's not a secret anymore that data-driven personalization is essential for marketers. They must be strategic, personal, and specific with their marketing efforts to deliver a better experience to customers.

This complex data-driven marketing aspect takes into account data, media, creativity, and other factors. Marketing teams should focus not only on the communication channel and the actual ad but also on customer behavior and trends.

In the past, marketers produced one creative or message for everyone. Only one self-contained file was needed for an ad. To grab consumers’ attention, they used rich media ads and other flashy ad formats that, known as intrusive (undesirable) marketing.

Now marketers are focusing on more user-friendly strategies that use message personalization to attract customers. With the convergence of data, media, and creative and with the help of marketing automation and programmatic advertising, marketers can personalize almost every aspect of the Buyer’s Journey.

Nonetheless, that doesn’t mean individualized messages, such as a user’s name appearing in the advertisement. That’s creepy.

Instead, it means that marketers could do differently in the creative after learning information about the targeted customer who may be part of a bigger audience with the same characteristics.

Nowadays, there are various types of marketing channels, including emails, display ads, videos, and social media, each of which requires its own type of marketing creative. Therefore, you can have different formats for one creative. Data doesn't make marketing simpler, but data-driven marketing is yielding better results.

The question is whether marketers can stay creative with the huge amount of data. Well, they not only need to be creative but should also use smart tactics.

Reasons, why marketers need personalization in their data-driven marketing strategy, include:

  • Analyzing and integrating customer data for improved service and customer experience
  • Bi-directional integration, i.e. automatic updating of customer data in existing and new tools
  • Targeting and nurturing every anonymous visitor and converting them into potential leads
  • Providing the right analytics to correct existing gaps
  • Enabling messages to be sent at the right time
  • Helping you choose the right communication platform

How Can Marketers Create a Successful Data-Driven Marketing Campaign?

Here are six important steps to help marketers create an effective data-driven marketing campaign:

1.Define Your Goal

Marketers should first define the goal of their marketing campaign, such as increasing brand awareness, improving customer satisfaction, boosting sales, increasing traffic, etc. This will guide them throughout the campaign and help them measure the success of their initiative.

These goals should be SMART, meaning:

  • Specific – The goal should be as specific as possible. Nothing vague!
  • Measurable – The progress towards the goal should be measurable. Setting a specific number for email list subscribers, sales, or website traffic are some of the examples of how to do it. These quantifiable measures are known as KPIs or key performance indicators.
  • Achievable – The goal should be achievable, not impossible. Marketers should outline a reasonable strategy to accomplish their goals.
  • Relevant – Reaching the goal is expected to benefit the organization in some way.
  • Time-bound – Every goal should have a reasonable deadline.

2.Know Your Target Audience

Marketers should know the specific audience they want to reach to achieve their goals. Targeting all people is not only ineffective but also expensive. That’s why you need to narrow it down to a specific group of people who are most likely to convert or take the desired action to bring you a step closer to your goal.

Try to figure out the type of people who need your product or service the most, or whatever you’re offering. Knowing your audience will make your message more relevant to them.

Here are three factors to consider when describing these people:

Demographics – This includes details such as gender, age, education level, marital status, location, income level, etc. Choose as many relevant details as you can to determine your target audience. You can also include psychographic information such as opinions, habits, values, and interests.

Behaviors – Research the behaviors of your target audience and compare them to your marketing goal. For example, if your goal is to increase sales, research the purchases they have made in the past. You can also consider the type of online content and ads they respond to, as well as their social media activity.

Motivations – When you know the goals of your target audience, you can figure out how to appeal to them. This way, you can offer them something that will help solve their problem or accomplish their goals, while achieving your own.

3.Get the Right Data

Successful data-driven marketing campaigns require first-party data or accurate and relevant data that can be obtained from past customers, including:

  • Sales histories, or the types of products they buy most often.
  • The behavior of your website visitors, or the actions they took while visiting your website.
  • Customer service communications.
  • Completed customer surveys.

If you need more insights or information about your loyal customers, you can expand your first-party data by purchasing third-party data from large data aggregators.

Sometimes, when you have all this data, or when you are struggling to collect it, you need a tool to work efficiently. Software like Whatagraph can make it easy for you to not only organize, analyze, and present data in an eye-pleasing way, but also make it much easier to define your target audience and their future steps.whatagraph report examples

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Customer journey optimization is necessary to make this marketing plan. This involves every interaction your customer has with your brand from the moment they heard about it to the moment they took the desired action, the communication in between and after the first purchase.

Customer journey optimization involves mapping all of these interactions, which not only helps you determine the customer's experience with your brand, but also guides them to the desired action. It also supports brand loyalty by allowing marketers to personalize the customer experience.

4.Choose Your Marketing Channels

What marketing channels do you want to use for your marketing campaigns? Is it your company’s blog, social media pages, email, PPC ads, radio commercials, TV commercials, or some other channel? If you choose social media sites, narrow it down by choosing a specific platform.

To make the right decision, use your customer data and you’ll see what type of social media they use. Don’t forget to consider the pros and cons of each channel. For example, Facebook is better for text-heavy content than Instagram.

5.Serve Appropriate Content

Factors to consider when determining your marketing content include your target audience, goals or campaign objectives, channels used, and customer journey. Combining them allows you to personalize content for each customer interaction.

6.Track Your Marketing Campaigns

This involves collecting data and measuring your success to see what is working and what is not. With these insights, you can narrow your audience, even more, eliminate ad waste, and identify patterns in high-converting content.

Examples of Data-Driven Marketing

Here are a few examples of data-driven marketing:

1.Retargeting

Most visitors don’t convert on their first visit. Luckily, there’s retargeting that provides a second or third chance to make a good impression. Almost every company gets good results with retargeting, provided that their service or product is validated by their market and that they drive the right traffic to their site.

Website visitors are the data used in this situation, as ads are only presented to people who’ve previously viewed a specific page on your website or your entire site.

2. Data-Driven Content

We’re all interested in people who are similar to us, people who share the same hobbies or struggle with the same problems. That's why B2B companies have started releasing internal data from their user base or platform.

However, B2C companies can also benefit from data-driven marketing. For example, OkCupid, a dating website, in partnership with Rosetta Stone, a language learning software, published a survey showing that 60% of singles have no problem dating a person who is not fluent in their language. This is valuable information for their marketing strategy.

3.Personalized Email Campaigns

If a user is only looking for women's clothing, there's no reason they should see ads with men's clothing, right?

Personalizing email marketing makes it much more effective. It also gives marketing teams the ability to put that personalization on autopilot. Other ways data can influence email marketing include sending follow-up emails after the initial purchase, suggesting related products, showing products for sale, and retrieving abandoned carts.

Conclusion

In an increasingly digital world, data-driven marketing is vital for the success of companies and businesses across all industries. It allows marketers to harness the power of data analytics to target the right audience and present them with the perfect solution to their problem or need at the right time.

The benefits of using data-driven marketing campaigns and strategies increase personalization, creativity, efficiency, and ROI.

Whatagraph team
Written by Whatagraph team

The Whatagraph blog team produces high-quality content on all things marketing: industry updates, how-to guides, and case studies.

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