Data-driven marketing is a great term for a relatively simple thing: a company’s marketing is approached in a data-driven way.
Data is today’s most valuable resource for businesses and is definitely the most important tool for today’s marketer. The aim of data-driven marketing is to provide a comprehensive picture of the customers’ purchasing motives and customer behaviour, based on the available data. All of the information collected from customer interaction can be used to refine and improve the company’s marketing strategy.
When your customer understanding is deep, the company also has a better starting point for producing a great customer experience. A data-controlled marketer is able to reach their customers in the right place, at the right time, and with the right message. This is reflected in the result below the line. Data-driven marketing enables the optimization of the marketing processes so that changes in the market or customer demand can be reacted to agilely and proactively.
Do you think you are doing data-driven marketing, or would you like to do this? Below you will find the 5 most important steps for data-driven marketing.
1. You have defined your business goals and know what kind of data you need in order to move towards these goals
Of course, everything starts with defining your business goals. The purpose of marketing is to support sales, so the objectives of the market must be based on the business objectives. When you want to operate in a data-driven manner, the marketing goals must be known. We will then start to map out what kind of data is needed to achieve these goals. So, let’s not collect data and measure just for the fun of it, but you have to remember to ask at least the following questions to yourself:
- What data do I need to support decision-making in order to be able to achieve the business goals?
- What data do I already have available at the moment?
- Is the existing data reliable?
- What data do I need to achieve my goals, but which I do not currently have yet?
- Is the necessary data available somewhere and if so, how do I get it for myself?
2. You know that the data needs to be systematically collected and you have a clear strategy for doing so
Data-driven marketing is an ongoing process. Your customers’ purchasing behaviour may change and is likely to change, your business goals will evolve, and many other variables may fit into the journey. In order to operate in a data-driven manner to achieve a good outcome, the data collection must be systematic and operate in a continuous process. The questions in section one will be asked again at regular intervals.
You should have a clear plan for how the data is collected, where it will be available from, and how this collected data will serve your business. This requires, for example, that you remember to consider not only the online channels, but also the offline channels from which data is available. All departments of your company must be taken into account, and the perspective cannot be limited to marketing only – customer service or sales systems, for example, can and often have great data to use for marketing.
3. Your decision-making is based on facts, not assumptions
Marketing is a real jungle of opinions because everyone has their own opinion on what kind of visual appearance is best and which message speaks most to the customers. When decision-making is based on opinions or assumptions, the risk of things going into the woods is high.
When you do marketing in a data-driven manner, you do not speculate on what works and what does not. You can rely on numbers and can quite effortlessly justify the current and future marketing activities based on them. This is how the data guides your marketing, not the opinions.
4. You have an in-depth understanding of who your customers are and know how to use this information
With data collection and analysis, you have the ability to perceive who your customers are, how they behave, and what their motives are for buying. With this information, you will be able to run personalized advertising campaigns with a consistent message towards the customer. You even understand how your products or services need to be developed to better meet your customers’ needs, so customer understanding collected by interpreting data also strongly serves product development.
5. You recognize the challenges of data control and are ready to take action
The challenges of data controllability today have nothing to do with the fact that the data is not available. The bigger question mark is whether companies have the know-how to process and analyse data in order to change it from insignificant numbers to genuinely business-beneficial information. The silage of data between different units of the company is also very typical. It is therefore important to be aware of the factors that restrict data collection. It is also necessary to regularly assess its reliability. After all, data can also lead in the wrong direction if, for example, it is collected or mis-processed.
There are also limits to data collection that create their own challenges. Data cannot be collected how it happens and in the way it wants, but it is subject to legal restrictions that must be taken into account. Issues to be taken into account include the EU Data Protection Act (GDPR), which became a precedent in May 2020 in Finland. The stricter cookie policy for browsers also poses its own challenges for data collection.
Do you already do data-driven marketing? Enable the Marketing Dashboard , where relevant data can be visualized in a near real-time format that is easier to understand.