You’ve heard it countless times:

Data is the new oil.

For many years, oil has been one of the most valuable resources in the world. And now, data is in more demand than ever.

Similarly, data has the potential to be your most valuable marketing resource if used effectively. So...

What is Data-driven Marketing?

On the surface, data-driven marketing is simply taking the focus away from what you think is right to concentrating on consumers’ desires, needs and wants. In other words, you’re positioning the customer as the hero in your brand’s story.

To achieve that, you have to effectively use customer information. The data can be acquired through customer interactions and the aim is to gain insights about buyers’ behaviours, motivations and preferences.

Some of the tools used for data-driven marketing are Google analytics, customer relationship management (CRM) platforms, heat maps, social media analytics, pay-per-click analytics, and search engine marketing (SEM) analytics.

Let’s now look at...

Types of Data-driven Marketing

Technological advances have increased the quality and quantity of marketing data. As a result, the world of data-driven marketing is broad. Irrespective of how expansive it is, the two main types of data used are:

a)  Contact information

Allows you to track prospects and target them through channels such as email, phone calls, direct mail or even paid social.

b)  Performance metrics

This is information that allows you to polish up your marketing activities to effectively reach more potential customers.

On the flip side, embracing data-driven marketing has its fair share of difficulties. Let’s look at them in detail.

The Challenges of Data-driven Marketing (And solutions!)

Some of the concerns are:

#1. Finding the right data

Today, there are massive amounts of data and it will only increase as technology advances. Sorting through this sea of information is overwhelming and time-consuming.

Additionally, the information should conform to data quality dimensions such as accuracy, timeliness and completeness.

Solution

Identify the metrics that matter to you. It’s easy to get drawn into what others are doing, but different companies have distinct goals and hence will have varying benchmarks. Also, avoid vanity metrics. They may make you feel like you’re making progress but are not that important.

For instance, it’s electrifying to have a viral piece of content — Tons of likes and countless shares on social media platforms. But if that doesn’t move your sales needle, then it’s the wrong metric to build on.

#2. Interpreting data

Most of the data collected by organizations is unstructured. And the information is only growing in volume.

The challenge?

Converting the data into insights.

Solution

First, you need to have relevant information. This is only possible if you have marketing objectives. Focus on the wrong goals and you will only waste time and make inaccurate observations.

Additionally, use a data visualization tool to help you identify patterns, relationships and correlations between different data sets.

#3. Data modeling

It’s critical to remember that no two customers are the same and therefore they will produce different data.

Again, in spite of the growth in digital penetration and the resulting surge in data, some companies still don’t have a better understanding of their customers. This is because a firm’s outdated data modeling isn’t capturing the shifts taking place with the necessary speed.

Solution

Data-driven marketing is only as good as the data behind it.

During data collection, cast a wider net by also incorporating third-party analytics on your business, consumers and competitors to complement your customer in-house data.

Next, choose a data platform that allows you to organize your collected data and can also keep track of your data sources.

#4. Collecting real-time data

Sometimes the data streams are not updated in real-time.  As a result, you will not be able to compare the previous marketing campaigns with current ones. Simply, decisions will be based on outdated and inaccurate information.

Solution

Find the proper marketing tools that allow you to collect the right data. In fact, having a single source of truth where all your team members can access information will allow you to gain valuable marketing insights.

#5. Privacy concerns

Yes, consumers want personalized experiences, but they also want the ethical use of their data. Aggressive data collection is a big turn-off because prospects don’t want organizations to know everything about them.

Solution

You should be transparent about how buyer information is collected and used. In other words, in light of regulations such as GDPR and CCPA, you should give customers the ability to opt out of data collection.

And now...

Putting it All Together

You don’t have to use the spray-and-pray marketing approach. When used strategically, data helps you to make smarter decisions and also create remarkable customer experiences.

And no, data-driven marketing is not a substitute for creativity. You need both. In fact, marketing is part science and part creativity. It’s about striking the balance to ensure effective and successful marketing.

All in all, there’s no doubt that this customer-first marketing strategy will increase your ROI.

So go ahead and try it today.