Importance of Basing Your Marketing Decisions on Data
Data plays a significant role in strategizing your way forward as a marketer or a business. No matter how small or big your business is or what industry you are in, data is influencing your decisions, impacting your marketing strategy, and how you operate your business.
In the present day scenario, if you don't know what your customers want, then your chances of success are extremely low. And there is no excuse for not using data to your advantage. There is a wide variety of tools available that allows you to capture a range of data at different stages in your marketing campaigns. Today, nobody practices mass and untargeted broadcasting. The advancement in digital techniques has brought in an extensive reach with precise targeting accuracy.
Data-driven decision-making involves collecting data based on key performance indicators (KPIs) or measurable goals, evaluating facts and patterns from these insights, and utilizing them for developing activities and strategies that benefit your organization in a number of areas.
Basing your marketing decisions on data allows you to work on your key business goals by leveraging analyzed and verified data instead of just trying to push buttons in the dark.
In this guide, you will learn how you can use data for improving different aspects of your marketing campaigns.
What the stats and trends depict:
- 40% of companies plan to stretch their data-driven marketing budgets
- 88% of the marketers use data obtained by 3rd parties for enhancing their understanding of each customer
- 45% of the marketers use data for acquiring more new clients
- 63% of the marketers use "customer journey analysis" for improving conversion rates
- 64% of the marketing executives strongly believe that basing marketing decisions on data is crucial in the economy
- 87% of the marketers believe that data is their organization's most underutilized asset
The competitive nature among the businesses in this digital era requires the utilization of data to target the right audience with the right messages. You can use analytics and social media reporting for planning and deploying targeted campaigns for particular market groups. By doing this, you can increase brand awareness among the right set of people of your services and products. Tons of data are generated every day, and proper utilization of analyzed data can substantially influence your marketing efforts.
According to Forbes, 58% of the businesses are generating value using information and data. All in all, data and analytics are crucial to the operations of businesses. With that said, marketers can use a plethora of technology-driven methods for collecting enormous amounts of data. Some of the most popular ways include:
- Transactional Data: This is a type of data that allows marketers to understand what their audience is buying, what steps they are taking in the process when they are buying, and more. Transactional data helps in exposing performance issues and understanding what sales and marketing strategies drive success. One of the most common examples of transactional data is the record of purchase on an online store.
- Collected Data: This is a type of data that is collected using online survey questions or lead forms. Collected data helps in gathering information about an individual. The information collected can be anything from gender, demographic, email, or more. This data can be used for creating marketing campaigns for targeting specific customer bases.
- Created Data: This refers to the market research process that marketers put in place for evaluating customers, their messaging preferences, their likelihood to buy, and other specific pieces of information.
- Compiled Data: This is a type of data that reflects the overall trend happening in the nation. You can consider it as census data.
- Experimental Data: This is the type of data that is generated from tests or experiments that a business might utilize when creating marketing campaigns. Experimental data is probably used for creating marketing communications and messaging.
- Captured Data: This is a type of data that tells about the behavior of the users. That is, if a user enters or type into the search engine (keywords, phrases, etc.), this becomes captured data.
- User-Generated Data: This is a type of data that marketers gather from social networks. It is about the activities the targeted customer base is taking part in on different social media channels like Facebook, YouTube, Instagram, etc. This includes what pages they follow, likes, shares, comments, etc.
These are the most popular ways how digital marketers collect and compile data for their marketing campaigns. Once the data is collected, it is analyzed and put into use. The strategic utilization of data includes effectively reaching the target market. By assessing the pain points of the consumers, their shopping habits, and purchase preferences, among others, specific marketing campaigns can speak directly to the intended customers. With proper segmentation and targeted approach, the effectiveness of each marketing initiative can increase dramatically.
When a marketing campaign is implemented, the resulting data can be used for understanding its effectiveness.
Most importantly, it is vital to pay close attention to conversion metrics and engagement at this stage, as this will help you fine-tune your strategies. The following are some of the most common metrics that you can use for evaluating marketing effectiveness:
- Conversion Metrics: bounces rates, cost per conversion, click-through rates, and open rates
- Return On Investment: calculating the quantity of leads generated or cost per lead
- Awareness Metrics: visits to the websites (including via social media), likes, and followers
To make digital marketing campaigns more accurate and targeted, marketing reports can prove to be quite beneficial. With marketing reports, you will know exactly what lacks your marketing strategy and what can be improved.
Here is how basing your marketing decisions on data could help your business
#1 Personalize your customer interactions
As said earlier, businesses have access to more data and information on their customers than ever before. This includes surface-level regarding their geographical locations, age, gender, and more. Using these data, marketers can derive more detailed insights into customer preferences and behavior. With customers deliberately opening up and sharing their details with businesses, it is clear that they are looking for personalized marketing. According to a report generated from Salesforce, 52% of the customers are likely to switch brands if the company doesn't customize/personalize their communications with them. Irrespective of that, companies have already started personalizing their marketing efforts in a number of ways. As a result, they are gaining impressive ROI. On the other hand, brands are using previous geographical profiling or customer interactions for delivering targeted messaging to their consumers. When marketing strategies are personalized, the target audience feels like they are valued and given respect as an individual and that they are not just any name on the spreadsheet.
#2 Determine which channels are working and which needs improvement
One great benefit of data-driven marketing is that it is easy to determine which channels are working for a business and which needs extra attention. Before things went digital, it was extremely difficult for the marketers to determine which of their strategies and efforts contributed towards the purchase of a product or service. Before the internet, everything was hit and trial. And it was challenging for the marketers to figure where the increase in sales was due to the promotional campaign or was it just coincidence. With the use of data, digital marketers can track consumers throughout their journey, from their interest in the product/service to the final purchase. With the likes of click-through-rates (CTR) and website cookies, brands have a clear picture of things that are working and things that need improvement or a complete makeover. By doing this, they are able to prioritize the marketing expenses in the right channels.
#3 Getting cross-channel visibility
In an increasingly complex world, brands are able to gain cross-channel visibility thanks to data. For a customer, it is no longer a necessity to visit a physical storefront, explore the products, and interact with the salespeople. With the likes of social media engagements, website visits, and email communications, it is easy for a brand to interact with its targeted customer base. Nevertheless, it is also a challenge for them because these communication channels create a complex picture. It is important for a marketer to keep track of all the interactions occurring through different channels, especially when an average user boasts at least 6-7 social media accounts. This is where data analytics comes in handy. It can help you turn an extensive spectrum of touchpoints to a close-knit customer profile. If marketers are able to gain cross-channel visibility, then their customers can expect a top-notch, uniform experience, irrespective of the communication channel they are using to interact with the brand.
#4 Complete funnel marketing in the digital age
A funnel approach is a well-known marketing strategy. However, in this digital age, this approach requires some tweaking. Gone are the days when customers used to make a linear journey where they found out about the product/service and then purchased it. Today, people have gotten smarter and vigilant when it comes to choosing a product. They conduct independent research on the brand or product through a variety of sources, including social media platforms, company websites, online stores, reviews, and even testimonials. Social networks are a crucial part of the modern marketing funnel. 43% of the internet users worldwide are youngsters and millennials between 16 and 26 who use social media for product research. Therefore, digital marketers can leverage these new digital mediums to target and nurture their prospective customers. This will allow you to make your customers truly adopt the complete funnel approach to digital marketing.
#5 Understanding customers
Customers are the multi-faceted individuals, and in order to understand them, brands are augmenting their data with 3rd party data. It doesn't matter how many times you interact with your customers; the data will remain the same. This is why brands are leveraging 3rd party data. While it is a risk that brands are taking as there is no relevance with the data they are getting, it is worth the shot as it allows them to come closer to the customers with new and fresh data. Brands are using cross-device ID tracking for accessing trustworthy 3rd party data. This gives them a clear representation of their target audience. This isn't possible without basing marketing decisions on data. Today, more and more companies rely on 3rd party data to understand their customers.
Tips to Get the Most Out of Your Data-Driven Marketing Strategies
Now that you understand why more and more brands are basing their marketing decisions on data, here are some key takeaways that will help you with better decision-making in business.
#1 Define Objectives
When it comes to decision-making, having a clear objective is a must else, the decision you make can go either way without any surety. Marketers define their objectives through social reports before beginning their analysis. As a marketer, you are advised to set a strategy in order to avoid getting trapped into the hype and trends, rather than the requirements of your business. For this, you will have to define clear KPIs (key performance indicators) like clicks, new followers, conversions, traffic, posts, engagement, reach, social sentiment, and revenue generated, among other aspects. While there are numerous key performance indicators to choose from, you are advised to focus on the most important ones within your sector and industry.
#2 Find Unresolved Questions
Once your goal is set, and strategy is in place, you are required to find questions that you and your team have to answer. Asking yourself the right questions is important as it not only saves time but allows you to focus on the right data. This ultimately leads to better marketing decisions. The questions can be anything from what are the types of posts that resonate well with my customers, what are the types of social media content that leads to more clicks, what social media platform of mine receives the most number of traffic, and more. This way, you can concentrate on the data and information you really need.
#3 Analyze and Understand
Now that you have determined your goals and defined some important questions, you need to extract meaningful insights from the information and create a social or analytical report that will help you make data-driven marketing decisions with ease. A social report is a must in today's time as it lets you analyze everything about your previous campaigns and prepare a more robust strategy based on that. For instance, if you want to boost conversions in the sales funnel, you need to determine why users are dropping off. On the other hand, there is also this possibility that you are receiving high traffic on your Facebook posts but are struggling to achieve the same with your Twitter post. Analyzing and understanding with the use of data can help in making an informed decision regarding the next strategy.
Developing a keen understanding of gathering and utilizing marketing data can help marketers in creating highly competitive campaigns for their products and services. The most important aspect of gathering information is understanding the target audience. If you can find your targeted customer base, it will become easy for you to generate data from them and then use it for your own benefit. Data is a crucial part of the digital marketing world, and it will play a significant role in how marketers will strategize their campaigns.