Modern marketing is data-driven. But what does that mean, what are its benefits, and how do you develop a data-driven marketing strategy? Let’s dive in.
What is Data-Driven Marketing?
“Data-driven marketing” is any marketing effort backed and guided by data and the interpretation of that data.
It’s not enough to collect and view data. To enable data to inform your marketing strategy, you must also interpret what that data means. This is why data-driven marketing involves continuous testing and improvement.
Data-driven marketing methods include email marketing, blog posts, digital ads, social media marketing, websites, and more.
For perspective, consider traditional marketing as the opposite of data-driven marketing. Traditional marketing typically includes TV, magazine, newspaper, billboard, and radio ads, as well as postcards, brochures, and flyers – all avenues where data collection is limited.
In short, data-driven marketing helps you reach the right people with the right message at the right time in order to sell your product or service.
Benefits of Data-Driven Marketing
Interpreting data helps you get the benefits of having it in the first place. Without interpreting data, your marketing efforts cannot be data-driven.
Reach the Right People
Not everyone is your ideal customer.
When you remember this simple fact, it makes it easier to optimize your marketing efforts to reach your ideal customer rather than spreading your net too wide and your marketing budget too thin by trying to reach everyone.
When you cater all of your marketing efforts specifically to your ideal customer, you will be able to reach and convert them.
If you only reach an audience but have few conversions, then it might be time to adjust your messaging or strategy to reach your target audience.
Personalized Marketing Efforts
Data-driven marketing helps you reach the right people at the right time in the right way. When you request specific data points so you can personalize your marketing efforts, you can cater your messages, campaigns, and more to the requests and needs of your customers.
Essentially, you are asking your customers what they want, so you can serve them what they want. And you are looking at what they are telling you through the data to further personalize your marketing. When you meet your customers’ wants and needs, they are more likely to convert.
Increased Conversions and ROI
When you interpret your data and use those insights to drive your marketing decisions, you are listening to your customers. Whenever your audience engages or doesn’t engage with a campaign, they are telling you that they are or are not interested in that campaign. We don’t always know why they are or aren’t interested, but with the data, we can make educated guesses on how to make more of your audience interested in your campaigns. When you do that, you convert more leads, and your ROI increases.
Optimized Marketing Spend
When you use data-driven marketing, you are able to see what platforms and campaigns have the best ROI. You’re also able to track customers through the marketing funnel and see where there are holes in the funnel itself. From there, you can optimize what is already working, which is another way of putting your money in the most profitable places.
For those platforms and campaigns that have low ROI, you may choose to put them on pause for a short period of time or indefinitely so you can focus your marketing spend on the efforts that work. Then, once the high-performing campaigns and platforms improve and stabilize, you can test more on the platforms and campaigns that previously flopped, which enables you to further diversify your marketing efforts again.
If you have holes in your marketing funnel, you can patch them and see a higher ROI on the marketing funnel as a whole.
At SharedTEAMS, we recommend starting small and scaling from there. But if you find yourself with a massive marketing funnel or complex marketing strategy that isn’t working, it’s best to dive into the details for each phase of the funnel to see what is working so you can optimize each of those first before fixing or building out anything new.
How to Perform Data Analysis
Start with a Question
To start analyzing data, you first need to know why you’re looking at the data in the first place. Marketers already know to start with a goal, but let’s simplify it: start with a question.
Do you want to optimize your entire marketing strategy? Then you need to look at all of the analytics. Do you want to see how your social media pages have grown over the past year? Then look at your social media analytics.
When you know what question you are trying to answer, you know what data to look at – or at least where to start. This is key to being able to sift through vast amounts of data effectively.
Collect data
Once you have your question, you know what platforms and tools to start your data collection process.
Depending on your question, you may want to collect a variety of data points, which could include these metrics:
- Sales revenue
- Customer retention rate
- Social media engagement
- Open rates
- Click-through rates
- Cost per click (CPC)
- Site traffic
- Return on ad spend (ROAS)
- Conversion rates
- Cost per acquisition
- Return on investment (ROI)
If you are looking to optimize your entire marketing strategy, then you will consider multiple metrics. If you are focusing on seeing how your social media pages have grown and benefited your sales, then you’ll look at the follower count of each page, the engagement rates (likes, comments, shares, and clicks), organic mentions, impressions, reach, website referral rate, and conversions.
It’s also important to recognize that no marketing effort exists within a vacuum, so your social media efforts will affect your email marketing, advertising, sales, and other efforts. With this in mind, you may want to collect other data points for a fuller picture of how one aspect of your marketing efforts fits into your entire strategy.
Analyze Data
After you collect your data, it’s time to analyze it. Depending on how much data you have, you may be able to review the numbers and compare them directly. Did your social media pages gain more followers? Did your email marketing program receive more clicks and fewer unsubscribes? Are there patterns or trends that can help us anticipate future marketing efforts?
If you have a lot of data to analyze, it’s best to analyze data sets by place in the funnel. That way, you can look for holes in the funnel as well as patterns and trends in each phase and throughout the funnel as a whole.
Interpret Data
Once you’ve analyzed your data, you may want to create visualizations, such as charts and graphs, to help you interpret and share the data.
To interpret data, you need to connect different data points that are correlated to each other in an effort to explain why our metrics improved or worsened.
If you’re looking at your entire marketing strategy and see that all of your efforts except social media are converting prospects, then it might be time to adjust your social media strategy. If your social media pages gained followers but didn’t see an increase in engagement, then it might be time to adjust your strategy.
As you interpret your data, consider external factors, such as algorithm changes, a global pandemic, or a natural disaster.
Don’t Forget About Customer Feedback
Throughout this process, it’s important to consider customer feedback. See if you can back up a customer’s claims through the data. Typically, if more than one customer shares the same problem with you, and the data backs up that concern, then it might be time to find a solution.
Need Help Developing a Data-Driven Marketing Strategy?
Data can be a bit intimidating. If you want help diving into your data to create a data-driven marketing strategy, see if our membership would be the right fit for your organization.