For decades, we’ve heard the oft-repeated mantra that the customer is always right. That has sometimes been a tough motto to live by if you’ve ever had to deal with a difficult or unreasonable customer. Whether you believe a customer is always right or not, what is universally agreed on is that each customer interaction can tell a little, or sometimes a lot, about the person you are dealing with.
In today’s digital world, that information has become almost as valuable as the currency your trade-in and the market for data is one of the most fiercely fought. That’s why it is essential for any company to focus some of their marketing energy on data-based insights, and that’s where data-driven marketing comes in.
What is data-driven marketing?
Every time a customer carries out an online transaction, they leave a little of themselves behind, kind of like a data footprint. That little nugget of information may tell you what brands they like, give you an indication of their age, gender or social class. Gathering that sort of data will give you insights into your customers – or potential customers – and how you use that data to target certain groups or individuals is the basis of data-driven marketing.
Companies will construct strategies based on the analysis of the data they collect through countless customer engagements. Everything from browsing and purchasing behaviour to customer reviews can be used to develop insights.
How can it help with planning media strategies?
Planning effective media strategies require direction and focus. Insights gained by data-driven marketing can help shape the focus of a campaign. Careful studying and analysis of trends can allow marketing companies to predict future behaviour based on past engagements.
How you use the data to drive your campaign will depend on what the ultimate goal of the campaign is. Are you seeking to boost sales or simply raise initial awareness of your brand? Data insights will be able to steer you in the right direction and mean you are not wasting your time and energy working off inaccurate analysis and information.
With data-driven marketing, you should be able to quantify what success represents. Insights will tell you the potential outreach of a campaign and your acquired data should be able to allow you to measure what percentage of that total outreach needs to engage for you to deem the campaign a success.
It will be able to tell you if the market you are concentrating on is a narrow one and, as such, you will be hoping for a relatively high hit rate. Broader data won’t be able to zone in one specific demographics in quite the same way, so your campaign may lack focus and a more muddled understanding of what outcomes you are expecting.
Data-based insights will be able to give you a much clearer and accurate analysis of what goals you can set and what a realistic measure of success is.
How does it help target the right customers?
Knowledge is power, although those in power don’t always possess a great amount of knowledge. Using knowledge as a tool to target customers, however, is the key to data-driven marketing.
What data insights tell us is that not everyone is the same, but many people do fall into certain broad categories. Marketing campaigns cannot be aimed at everyone, that’s why it is always prudent to know your audience before starting out at a data-driven campaign is the best way to go about that.
First, you need to understand your audience. Insights can provide with demographic details, such as age, gender, income and education level and where they live.
Add onto that the online behaviour of your chosen audience and you begin to narrow those insights a bit. This will inform who you to target with marketing campaigns. For example, if you are seeking a sales bump, you’ll want to zero on people who show a regular purchasing pattern as opposed to the eternal browsers.
Sure, you might hook a long-term browser into a sales-focused campaign, but by concentrating on those who have shown a healthy history of buying, you will be better able to target the right customers.
What are the other benefits of data-driven marketing?
Data-driven marketing isn’t just about finding out as much you can about potential customers. You can also boost your return on investment (ROI) by paying attention to seasonal trends – for example, people will buy warmer clothes in the winter, but if a close eye on the weather forecasts may tell you that it’s going to get colder earlier this year, so you might want to consider time a campaign to mitigate this.
You should also keep a close eye on popular trends in popular culture, music and sports as these can also inform browsing and purchasing trends. For example, you may find that a certain fashion accessory becomes popular due to it being worn by a famous actor, singer or social media influencer. By keeping up a close eye on the data associated with social media followers of certain accounts, you can predict where to direct marketing campaigns to maximize ROIs.