Data-driven marketing is a concept that starts at the highest levels and becomes an enterprise-wide initiative. Simply stated, it is leveraging the vast amount of data collected by the average company to reduce reliance on intuition as well as prevent "knee-jerk" reactions to what the competition may be doing.
The move to a digital enterprise has given marketers the opportunity to gain new insights into why customers react as they do making it easier to plan intelligent campaigns and determine effectiveness. However, many businesses have yet to realize that data-driven marketing helps foster customer loyalty and engagement, two critical factors for long-term, sustained growth.
In October 2014, Forbes Insights surveyed a range of executives in various industries to determine how marketers perceived the impact of data-driven marketing on their organizations. The information uncovered by the survey can help demonstrate the importance of data-driven marketing.
- Among businesses classified as having the most data-driven cultures ("leaders"), almost 75 percent reported that their efforts have provided increased customer engagement. Among businesses that do not leverage data or employ analytics for their marketing efforts ("laggards"), less than 24 percent reported increased customer engagement.
- Across all classification levels, 47 percent reported seeing positive results in the area of customer loyalty, and 42 percent reported increased customer satisfaction. Approximately 43 percent reported that their data-driven marketing efforts had helped gain new customers with 41 percent crediting their efforts for increased customer retention.
- Approximately 69 percent of the respondents expect their use of data-driven marketing to increase during the next three years with almost 25 percent classifying the projected growth as a "significant" amount.
- The types of data collected have already increased. Many respondents (62 percent) reported that they collect demographic information on the customers. However, collection of data involving other metrics is on the rise. Notable data types currently being collected for the purpose of facilitating data-driven marketing initiatives include purchase history (27 percent), social metrics (24 percent), online transactions (38 percent), and behavioral data (42 percent).
- Almost 25 percent admitted that they have postponed or cancelled a campaign after re-examining the data while 58 percent stated that they have repeated or extended campaigns due to data-based feedback. Approximately 47 percent stated that they have used the data to alter campaigns that were currently underway.
Harnessing the power of data-driven marketing also offers a number of other benefits including increased profitability, enhanced brand loyalty, improved decision-making capabilities, enhanced delivery of an Omni-channel customer experience, and improved employee efficiency.
The survey also asked the leaders in data-driven marketing to offer insights into their strategies and experiences. They offered the following tips for launching an initiative to leverage data for marketing efforts.
- Top performers have the support of senior management. Data-driven marketing involves more than just the marketing department, so having the CEO and other C-suite executives buy into the program facilitates the process.
- You need the right people on your team. They must be comfortable analyzing data, and if they happen to love working with it, that is even better. However, do not overlook the importance of natural curiosity. Curious people often look at data to gain insights into the world at large, and they may have unique perspectives to offer.
- The customers must always be the center of your attention. Analyzing your data can offer you different perspectives, but it is just as important to listen to your customers. Do not rely on data so much that you develop "tunnel vision" and are unable to see beyond the numbers.
- Do not launch a far-reaching, massive program all at once. Look for small or quick wins. Use "bite-sized" pilot programs to test effectiveness, such as small campaigns that can be accurately measured.
- Plan your strategy with the good of the company in mind. Data-driven marketing should be part of your enterprise's digital strategy rather than a stand-alone program. As such, its planning should include aspects such as interdepartmental alignment and the overall goals of the business.
- Your data-driven marketing must be flexible. Changes can happen rapidly that require you to alter your marketing plans. As you continue to analyze the data, you might detect trends that require you to make adjustments. Be ready to respond quickly and in a manner that will be the least disruptive.
Data-driven marketing is proving to be much more than just the latest catch-phrase. Companies that are doing it correctly are already reaping returns. As more time passes, expect to see an even wider gap between the leaders and the laggards.