Introduction to Data-driven marketing strategy
Data-driven marketing strategy (DDM) requires a different mindset geared towards understanding customer requirements and be innovative enough to use the best of the data management tools available. A data-driven marketing strategy cannot be implemented with a mindset that was relevant two decades ago. Data-driven marketing strategies use technology, customer data, and analysis to find new leads, maintain an existing customer database, attract new customers and drive revenue. The potential of a Data-driven marketing strategy is indeed huge but strategies vary across the industry.
Let us study much more about Data-Driven Marketing in detail:
Marketing doesn’t start after developing the product but most often it the preliminary process starts by identifying a need or problem that needs a product or service to solve it. Normally, such needs are identified through surveys, or discussions in social media such as Quora Digest or it could be an innovation from a university, research institution or individual waiting for commercialization of the idea.
However, for companies who already have products and services, the bulk of future development can take place with the data the company gets from customer interactions, secondary data, and tracking the performance of competitors. This is the age of Big Data and companies who do not store, understanding, retrieve and analyze customer interactions are likely to lose out to competition in a big way.
Top 10 Steps for Data-Driven Marketing strategy Success
Here are some of the steps required to succeed in data-driven marketing:
1. Have a robust CRM and ERP system in place
With the increasing complexity of business operations – handling taxation, sales, inventory, multi-locational movement of goods, and tracking them, it pays to have a good customer relationship management (CRM) system and supported by a good Enterprise Resource Planning (ERP) system in place as the backbone.
CRM enables companies to keep track of customer movements from placing a sales order to invoice generation and subsequent warranty, service events. These days companies also store mobile phones, email, name, age, anniversaries, repeat purchases, loyalty points earned. This, in turn, enables companies to understand the customers buying patterns, behavior, lifestyle and develop new products with those factors in mind. Having an ERP system as the backbone enables the company to integrate several functions within the company from production, inventory control, marketing, sales, distribution, finance, HR into an integrated whole thereby enabling better decision making.
ERP and CRM were considered suitable only for big organizations at one point in time. However, both of them are now available at affordable pricing for small and medium businesses too.
2. Have a data management platform ready
It is true that with an ERP and CRM in place, the company could be inundated with data on a daily basis. There could be structured and unstructured data (raw data) which may not make much sense to the marketer. For. Eg. a set of data showing sales of air conditioners would be meaningless unless it is structured into region-wise or product-wise classifications. Month-wise classifications may be required to do a relevant analysis while new models launched by competitors and their approximate sales data may also be needed to work on future strategy.
For marketers to get the relevant data, there should be a data management platform (DMP) at the backend that works tirelessly. The DMP’s are capable of fetching data from various places, identify the segments to target messages and give directions to media planners for them to position them in hoardings, banners, mass media, and social media.
The CRM and ERP will provide structured and unstructured data from different places and define the audiences for future marketing initiatives. It could be from existing customers, inquiries made, or from websites in which case it could be anonymous people tracked on the basis of cookies or it could be data sourced from data vendors. When the audience profile is thus created, it is the job of DMP in buying ads to target these groups. Thereafter, instructions are given to media planners with details about the targets, the message to be delivered, and through what channels.
Without a proper DMP, the marketer may not make much headway in digital marketing efforts, according to analysts.
3. Shop for the best data management tools
There are plenty of tools available for tracking and analyzing data related to emails, web, social, media, competition, mobile apps, and so on. With a plethora of offerings in the market, the digital marketer may get confused as to which ones to choose. NG Data has listed twenty such tools and their features which makes it easier for the marketers to estimate the size and quality of the audience on the website, create charts and tables based on the data, track web leads, and measure return on investment (ROI). Some tools are offered free while others come with a monthly subscription fee ranging from $79 to $300 per user. Among the top tools are Ducksboard, Optimizely, Compete, DataHero, Litmus, Comscore, Mindfire Studio among others.
Marketers need to have integrated marketed management (IMM) to get the best results from data-driven marketing. It involves a real-time assessment of data, customer interactions, and ongoing innovations. The tools are available, what is required is to set goals for marketing and streamline the different departments to achieve the intended objectives.
4. Define your goals and objectives in data-driven marketing trends
Companies may be getting, storing, and analyzing data using the same set of tools and strategies, but what is important is that goals and targets are different. In some cases, it may be the launching of the new brand, sometimes it drives more sales and branding, or it could be to double subscriptions for a service. Can the marketers rely on big data or should they also depend on their gut instinct when it comes to implementing a new idea or launch of a product? Therefore, the task of the data management platform is to ensure that they don’t just come up with data but actionable ones that look credible and trustworthy. If marketers tend to view the data reports with skepticism, then gut instinct would score in their decision making and hence a lot of effort on data analysis may become redundant.
5. Data-Driven Marketing Strategy should give a wholesome consumer experience
The objective of the data-driven marketing strategy may be increased market share, innovative offerings for consumers. But at the core of Data-driven marketing strategy philosophy is the theory that a bird in hand is worth two in the bush. If that is the case existing consumers should get a wholesome experience-which includes the company giving due value for past purchases, and loyalty towards the company, and using data collected about the customer to give better offerings in the future.
6. Leveraging best practices
A data-driven marketing strategy cannot be implemented with a mindset that was relevant two decades ago. It means making changes in marketing operations, interactions with customers, and having a go-to-market approach that all can’t be implemented in one go. It is important to have a five to ten-year perspective on where the company wants to be in the industry. With that vision, it is easier to work with marketing experts to derive maximum return on investment (ROI).
7. Learn from the competition & industry
It is essential for the marketer to understand what the competition is doing and adopt their best practices instead of developing new strategies that are not proven in the market. Big data is about handling complexities not only with respect to consumer data but in managing them for the future. Therefore, marketers need to integrate their efforts with the technology team to manage such complexities and simplify the procedures.
8. Work closely with the IT team
Big data is a combined effort of technology, marketing, and advertising teams with prominence in some parts of the effort to technology as the process of capturing, storing, structuring, and presenting reports are in the technological realm. However, as in an x-ray, CT Scan, or ECG in the field of medicine, technology does only half the job, the task of inferring something from the data and putting it to good use in the market is ultimately the marketer’s job. If the product or service fails or customer satisfaction levels dip, marketers are at the receiving end and not the Big Data. It is not just enough to implement new technologies and processes but also make an assessment of its impact on the top line and bottom line of the company.
9. Are you comfortable with the new paradigm data have driven marketing trends
Despite the tall talk about big data drove marketing strategy, there could still be companies that are not comfortable with the technology and its new processes. An Adobe Digital Roadblock study found that nearly two-thirds of marketers are comfortable with the new technologies if they become mainstream. It means that some companies are waiting for others to join the bandwagon before adopting such innovative or riskier approaches. There are those who believe the early adoption phase is over and those unwilling to try it out could be missing out on building new relationships with customers, adding incremental revenue, and several other advantages.
10. How to learn more about data have driven marketing trends
Several online courses and university programs are available for data-driven marketing strategy apart from quality books on the subject. It makes sense for marketers and IT specialists to undergo some of the available data-driven marketing strategy programs to get a better awareness of the huge potential of big data. For example, Kellogg Northwestern University has announced a program for April this year that will help professionals implement Data-driven marketing strategies in their organization. They cover concepts from branding, marketing metrics, technology, finance, campaign management. Webinars, conferences, and workshops are also the way to get updated on the latest data-driven marketing strategy trends.
The conclusion of Data-driven marketing trends
In the fashion industry, it could be the creation of a ‘wow’ factor in terms of a really trendy product made available, in some cases the focus would be on repeat purchases.
With product life cycles becoming shorter and shorter such as in mobiles, watches, and laptops for 2-3 years, the importance of a Data-driven marketing strategy need not be over-emphasized. It is already helping companies connect better with customers and provide a wholesome experience, especially in the travel and tourism industry.
Marketers are closely associating with the IT team to ensure the protection of customer data and use them for insights that ultimately benefit the customer, shareholder, and all stakeholders in the industry.
The increased use of mobile devices makes it more essential for the industry to come up with more innovative and secure apps to benefit customers. Discounts, offers, new product launches can all be communicated sooner to the discerning customers through better targeting enabled by big data analysis.
Data-driven businesses accounted for $202 bn in 2014 in the USA, according to data-driven Direct Marketing Association out of which 50% is accounted for by data-driven marketing strategy services that deploy first-party data, 28% on value-added services that rely on third-party data. The biggest beneficiaries of DDM are e-commerce, digital audience assembly, and postal production in the USA.
According to surveys, there is significant pressure on the part of marketers to use Data-driven marketing strategies even as they doubt the readiness of the organization to implement them as a whole. And at this stage marketers still feel more than 80% of data in an organization is going underutilized.
Last year, a US study pointed out that the quality of data utilized by companies turned out to be poor and it was attributed to a lack of good data management practices. This, in turn, requires companies to improve their data management platforms, use better data-driven marketing strategy tools, and hiring the right people are quite important for the success of a data-driven marketing strategy. It also depends on how the Data-driven marketing strategy is managed within the organization. For example, better results were found in companies where a single person was given ownership of the project. Centralized processes, maintaining the integrity of the customer data, and having the right data-driven marketing strategy document that is known to key team players will help DDM achieve better results.
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