Data-driven marketing: the future of marketing

Marketing has undergone a fundamental change recently. We are moving further and further away from the old approach - working on the basis of assumptions or a gut feeling. Today, marketers turn instead to the most reliable source of information: customer data.

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Unfortunately, we see that many are still struggling with the data-driven approach. Many people often ask us where to find relevant data. Others complain about the lack of tools. And the biggest problem is not knowing how to access, analyse and compare the information you have.

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In this post, we'll go a little deeper into what data-driven marketing is and how it differs from traditional marketing, as well as how you can start working with a data-driven strategy and what the benefits of it are. 

What is data-driven marketing? 

The term "data-driven" was already used in the late 1990s, when it was used to describe how companies used databases to analyse the behaviour of their customers. In the early 2000s, this concept became more popular as companies realised that they could use these databases for customer relationship management (CRM) and customer insight management (CIM). Later, it was realised that the same data could be used to streamline and optimise our marketing efforts.

In short, data-driven marketing is the process of analysing past, present and emerging customer data to identify key trends in consumer behaviour, predict future consumer behaviour and generate insights that can be used as a basis for making better business decisions. The key here is precisely that these analyses need to result in actionable insights, i.e. knowledge that we can use to optimise our marketing strategies. 

How does data-driven marketing differ from traditional marketing?

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Data-driven marketing moves from using gut feelings and personal assumptions to building actionable insights from customer data. 

Here is a concrete example: 

Traditional marketing:
You want to send out a Christmas greeting/campaign to your customers, but "nobody reads their email on Christmas Eve", so you send the greeting/campaign on New Year's Eve instead.

Data-driven marketing:
Either we look at data from previous years to see the extent to which customers open their email on Christmas Eve, and more importantly how well they convert. If we don't have data from the past, we do a test, to half of the customer base we send on Christmas Eve and the rest on New Year's Day. Then the most important thing is that we analyse the results and learn from them, i.e. build on our insights to work smarter in the future. 

What are the benefits of data-driven marketing?

If you apply a data-driven marketing strategy correctly, some of the benefits can be: 

• Increased return on investment
• Increased customer satisfaction
• Reduced churn
• A better understanding of customers

Data-driven marketing helps marketers to better target their campaigns and reach their customers with relevant messages. It also helps them understand their customers better and make decisions based on that understanding.

It gives marketers a way to measure the performance of their content and ads, helping them to know what's working and what's not. In this way, they can save money by eliminating wasted spending on ads and campaigns that don't work.

The good news is that this can be used by companies of all sizes and in all sectors.

Start small, it's better than doing nothing! 

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How to work with data-driven marketing: 

To succeed with your data-driven marketing strategy, you can use a variety of technical tools that can collect and analyse data from different sources. For example, you can use Google Analytics to track website visitors' demographic information and online behaviors, CRM and Marketing Automation to track how they interact with your communications, and various social media tools to analyze how they interact with your organic and paid posts.

Start by analysing the customer data you already have and try to identify patterns. Then use these insights to tailor your marketing efforts.

Here are some examples: 

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 Insight: You see that 50% of people who visit your website never come back. Investigate what campaigns are driving traffic to your site, obviously 50% of that traffic doesn't think your website was relevant to them. 

What you can do with that insight: It might be worth trying to advertise in new channels, and finding out which audience your products/services are most relevant to. 

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Insight: You see that your most profitable customers (the ones who spend the most) are usually those who have been recommended by another customer or come in through a referral campaign.

What you can do with that insight: Think about how you can increase your referral marketing? Can you reward those customers who refer you for something sweet to encourage that behavior further?

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Insight: You see that the email campaigns sent on payday don't convert as well for the under-18 audience. Instead, this audience converts best in the middle of the month. 

What you can do with that insight: Make sure to personalize communications to this audience by changing the timing of your campaigns. This will ensure that you are relevant to that specific audience. This may mean more work, but also higher conversion, consider whether it's worth it in your case. 

The most important thing to take with you is: don't forget to do tests. What your long experience in the industry has proven to work all these years, may not work now, or not for your specific target audience. Something that worked two years ago may not work the same way today. The success of data-driven marketing is combining gut instinct and experience with data. Don't be afraid to challenge your own assumptions. 

Learn more about how we can help you get started with data-driven marketing here.