You’ve heard it many times before: big data is changing the world. But how many companies actually use big data in their day to day operations – and more specifically, in the process of building their marketing strategies?
Here are some numbers that give a better overview of the current situation:
- 83% of the marketers who exceeded their revenue goals were using data to personalize their offerings
- 64% of marketing executives agree that data-driven marketing is the future
- 49% of marketers feel the need to increase the role of data in their current strategies
- And yet, 87% of marketers have stated that they consider data as the most underutilized asset in their companies.
These numbers show that most companies are aware of the importance of data and its role in maximizing their revenue, BUT the theoretical knowledge does not match the current practice.
So, if the world struggles to implement data-driven marketing strategies in their companies, how can you do it successfully?
We’ll get to that later on. First, let’s take a look at the reasons WHY data-driven marketing is becoming increasingly important.
The What and Why of Data-Driven Marketing
The term “data-driven marketing” is pretty self-explanatory: it points to the marketing strategies that companies create utilizing the insights they get from collected and analyzed market data. In other words, by looking at past customer behavior and current best practices in the industry, companies can make more precise predictions of the future and make better and more informed business decisions.
A data-driven marketing strategy allows a company to:
- Target the right customers
- Find the right channels to reach them
- Understand customer needs and pain points
- Improve the user experience
- Convince visitors that your offerings are the answers to their needs
In other words, by understanding what your biggest competitors do to reach and nurture their leads, where your customers spend the most of their time, and what they are looking for, you’ll be able to create more personalized and compelling offers.
How to Build an Effective Data-Driven Marketing Strategy
Although the numbers above might be discouraging, don’t worry – building a marketing strategy rooted in data from scratch is hard only because you haven’t done it before. Or, you have tried to do it but didn’t know the exact steps you should take to implement it successfully.
So, here are a couple of things you should have in mind when you decide to transform your marketing and integrate data analysis into your organization.
Get the Right People and Automation Tools
Two of the greatest challenges companies face when deciding to utilize data in their operations is the lack of expertise and lack of technologies.
Even if you gather enough data to be analyzed, if you don’t have people who know how to analyze it and make relevant and actionable conclusions, that data will not serve you.
So the first step is to create a team of people who will know how to handle the collected data. There are three models you can use to create a data-driven marketing team:
- The Center of Excellence Model. One team consisted of people of various profiles: marketers, analysists, data scientists, data engineers who are responsible for handling all the data.
- The Distributed Team Model. A decentralized approach where the company includes analysts and data experts in each sector or team across the company. Although this approach allows analysts to gain more in-depth knowledge of what each team needs, communication might be a challenge.
- The Hub and Spoke Model. This model is a hybrid of the previous two: a central team is accountable for creating guidelines and processes, while the analysts in each division are responsible for gathering and analyzing the data, which then, they return to the central team. This model allows for better coordination but is only possible to implement in big companies that have the needed resources.
After you choose your model and create your team, you should select the automation tools that’ll help those in charge of data analysis to spend less time finding their way through the gathered data and focus on drawing actionable conclusions.
Set Your Objectives
What are you trying to accomplish? Do you want to decrease the bounce rate on your website, or you want to make those clients that abandoned your carts before making a purchase get to the bottom of the funnel? Or, maybe you want to reach an entirely new audience?
You have to know your final goal, as not all data will be useful to you. If you tell your team what you are trying to accomplish, they’ll be able to focus their energy on finding the data that’s relevant to your current goal. Moreover, knowing your objectives will allow you to set your KPIs and know how successful your marketing strategies have been.
Gather the Data
Okay, now that you have the other things in place, you should start gathering the data. Based on your objectives, you might want to gather competitor data, customer data, or focus more on social media analytics. The list of choices is long.
Once you gather the data, it is time that your team analyzes it. Here are a couple of ways you can employ your data to create a more effective marketing strategy:
- Follow your competitors’ strategies
Your company is not isolated on the market, and other companies operate just as well, or even better than it does. Finding out what your competitors are doing can give you an insight of the best practices of the industry, so instead of finding out what works through trying and failing, and trying again, you can take a shortcut to success. Of course, that does not mean that you should copy your competitors’ marketing strategies – just find the pattern that works.
- Gain insights into the demographics of your target customers
The demographics of your customers will give you a clear look into what your target audience might be interested in. That way, you can segment the audience, and personalize your offers.
Moreover, the demographic data will help you improve your content marketing strategy, and, without too much trial and error, find the kind of content that will boost your audience’s engagement.
- Tend to your customers’ pain points
The data you gather will give you a clear overview of your customers’ buying journey and the hurdles they face by the time they make the purchase decision. Pinpointing the problem is half the solution – knowing where the biggest problems happen, will allow you to optimize your funnel for more conversions.
- Choose the right marketing channels
Data allows companies to compare various marketing channels, and choose the one that fits their business. Following where data leads you, you might be able to find opportunities for various partnerships or affiliate programs or discover a way to boost sales through social media and so on.
A/B Test Your Strategy
Finally, to ensure that the strategy you come up with is as effective as it can get, you can’t avoid constant testing and tweaking according to the results you get.
Remember, even if you find a strategy that works, don’t forget that there is always room for improvement, and testing will open the door to it.
Danielle Canstello is party of the content marketing team at Pyramid Analytics. They provide enterprise level analytics and business intelligence software. In her spare time, she writes around the web to spread her knowledge of the marketing, business intelligence and analytics industries.