What is data-driven marketing and how can it help you?
Shifting to a more scalable and data-driven marketing strategy can be a challenge for many organisations. In fact, Marketing Week found that only 37% of CMOs feel they are capable of using analytics to tailor their communication strategy in a recent survey.
Getting to grips with data-driven marketing is fundamental to executing a modern, proactive marketing strategy, and yet, taking the leap can still feel extremely daunting.
What is data-driven marketing?
Data-driven marketing is the ability to build an optimised and agile marketing strategy based on internal and external customer insights. Marketers who use customer data to deeply understand their target audience and let this understanding influence and guide their marketing programmes to deliver the best return-on-investment possible can consider themselves “data-driven”.
Behavioural, geographical and socio-demographic insights can all inform marketers of the potential need for products and services from a particular consumer base. Ensuring marketing communications are then tailored effectively can improve performance, customer loyalty and brand affection.
Why is data-driven marketing important?
Data-driven marketing is important because it allows marketers to hyper-segment their audiences, tailor their communications and benchmark the performance of specific marketing activities to specific target audiences.
Without data insights guiding marketing programmes then performance can be varied, and opportunities missed.
Data-driven marketing in action
Below we consider two scenarios in which data has been utilised to improve the accuracy of targeted communications and has improved performance as a result:
1. Analysing customer segments
Analysing your current customer base to identify trends and behaviours can unlock a wealth of insights. For example, looking at your customer purchase history, your largest customer segment may be women, aged 25-34. So all logic would suggest you should continue to target this group with tailored communications.
If we look at the data more closely and apply more advanced analytics you may discover that another segment is indexing even higher than this one but due to this segment making up a smaller percentage of the population, on the face of it, it looks less appealing. This is called ‘over-indexing’. In fact, you may find that men aged 55-64 are twice as likely to purchase your product as the original “top” segment. Over-indexing versus the population is a useful data analysis method that all marketers can apply with a platform like Mosaic from Experian.
2. Location-based targeting
Similarly to the approach in the first scenario, it’s important for marketers to deeply understand “where” their best audience is. Whether that is for deciding a physical shop location, direct or digital marketing.
By analysing the socio-demographic traits and behaviours of consumers we can learn many things. For example, how many bedrooms they have in their house, potential household salary, whether they live in urban or regional areas. If, for example, you supply a high-end, premium product or service, then understanding these traits can be invaluable when targeting and tailoring your communications.
Data-driven marketing tools
Ensuring you have all the building blocks in place to deliver effective data-driven marketing is important. From housing your data, to being able to effectively interrogate it, it’s important you have the right insights at your fingertips. Below are a few of the technological building blocks you should consider:
An effective data repository is essential. The most popular CRM providers, such as Salesforce, SAP and Microsoft, all have off-the-shelf capability to help you store and manage your data. Experian also has a range of data quality tooling to help you keep your data fresh.
Is your marketing data driven?
Hopefully we’ve given you some guidance today on how to get started with your own data-driven marketing campaigns. If you’d like to learn more about the insight we can provide with Experian Mosaic, then please don’t hesitate to get in touch.