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The Rise of Data-Driven Marketing: Definition and Benefits
More and more companies of all sizes and industries are realizing that data is a critical resource for their marketing campaigns. 87 percent of marketers believe that data is their organization’s most underutilized asset.
So what is data-driven marketing, exactly, and how and why should you use data-driven marketing in your business? We’ll answer these questions and more in this article.
What is data-driven marketing?
As the name suggests, data-driven marketing is a form of business marketing that uses your enterprise data to make smarter choices about your marketing tactics and techniques. From the choice of creative assets to which audiences to target for your next campaign, data-driven marketing makes use of the information at your fingertips to better inform your decision-making.
Why should you use data-driven marketing?
Data-driven marketing is an innovative marketing technique with a variety of advantages. There are many good reasons why data-driven marketing is such a powerful tool, including:
Quantitative, not qualitative: Many marketing decisions are made purely on guesswork or gut feelings. Data-driven marketing, however, allows key decision-makers to back up their choices with cold, hard facts and figures.
Greater visibility: Data-driven marketing gives you more insights into your most successful lead generation initiatives. For example, you might discover that your most valuable customers are small and medium-sized businesses who download one of your white papers. You can then focus on generating more white papers that target the needs of this audience.
Smarter personalization: Customers these days expect businesses to cater to their needs and desires with personalized marketing campaigns. Data-driven marketing helps you target key subgroups and even individual customers, boosting your conversion and retention rates.
Higher productivity: Instead of running in-depth manual analyses, your marketing team can sit back and let the software do all the work. This lets them focus on higher-level activities, such as creating an attention-grabbing campaign.
Better results: Various reports and studies have confirmed that data-driven marketing can bring massive benefits. According to a Forbes report, for example, organizations that excel at data-driven marketing are almost 3 times more likely to achieve higher revenues than organizations that lag behind.
What data should your business collect for data-driven marketing?
With so much information at your disposal, how can your business decide which data is most useful for data-driven marketing? Below are just a few possibilities.
Of course, your business should be collecting all manner of data about your customers and potential customers. This information can be separated into four categories:
Demographic: Age, gender, education, income, company, etc.
Geographic: ZIP code, city, state, region, country, etc.
Psychographic: Attitudes, preferences, interests, personality traits, etc.
Behavioral: Website visits, downloads, purchases, etc.
Your website is perhaps the most valuable source of data about the behavior of your customers and prospects. By tracking how users navigate and interact with your website (e.g. entering their contact information or downloading a resource), you can glean a wide variety of valuable, actionable insights.
Marketing data is where the rubber hits the road to evaluate the success of your marketing campaigns. If you find that a pay-per-click (PPC) advertising campaign is underperforming, for example, you can use A/B testing to run different variations and see if you can improve conversion rates.
How to get started with data-driven marketing
If you’re just starting out with data-driven marketing, it’s a wise idea to join forces with a knowledgeable, experienced partner who can guide you along the way. Fifth & Cor is a marketing and innovation company that helps our clients tell compelling stories and build stronger brands. We’re passionate about using the power of data-driven marketing to drive business agility and improve the customer experience.
Want to learn more about how we can help with your next campaign? Get in touch with us today for a chat about your business needs and objectives.