By: Hilary Thompson
With big data being more accessible than ever, marketing strategies are evolving to incorporate more metrics. Data-driven strategies are being utilized to target audiences and encourage them to convert at a higher rate than ever before. Forming an appropriate strategy based on the data available to us can be a challenge, but it’s completely possible if you follow the right process.
Key features of a data-driven strategy
Keeping your strategy organized is crucial in marketing, especially if you’re going to be working with large amounts of data. For instance, following the digital marketing stack will help you visualize what you have to work with and the relationship between the tactics you’ll be using. By organizing your strategy well, you can more easily prioritize the steps you need to follow to achieve goals.
Every type of successful strategy includes goals and a data-driven one is no different. You need to figure out exactly what you want to accomplish through your strategy. Setting the right goals is important if you’re going to be successful. Make sure those you set are relevant, reasonable, and specific.
Obviously, data-driven marketing requires data. You may need to collaborate with other divisions to uncover all of the best information about your customers. Look at sales data, website analytics, social media engagement information, and any other sources that could give you insights on your customers.
Some marketers believe the misconception that data and analytics are the same. However, just because you’ve acquired data doesn’t mean you understand it. Analytics is what helps you make sense of your data. Without it, your data is just a bunch of numbers and information. Analyzing it will help you point out significant patterns so that you can make informed decisions.
You need to be able to measure and report your results, so identify metrics that will properly represent your efforts and progress. Metrics will reflect whether or not your strategy is working, so choosing the right metrics is extremely important. It will also help you collect relevant data you can use in the future to improve your strategy.
What differentiates a data-driven strategy from other marketing strategies?
Data is key in decision-making. A data-driven strategy utilizes solid information as evidence for making decisions. It takes into account the consumer preferences and behavioral patterns that already exist and gives marketers a solid foundation upon which to build a campaign.
Other traditional strategies generally include presenting an idea that might work and finding information to support it. They make obvious assumptions and create an “ideal customer” buyer persona, which means marketing teams are pinpointing the kind of person they think will be most interested in their product.
A data-driven strategy takes a different approach. You examine data first, then form a strategy based on patterns you discover. Instead of targeting customers that fall into a category you’ve created, you can target people who you know are already interested in your product. You’ll use analytics to identify current and potential customers, personalize marketing efforts to specific consumer preferences, extract behavior patterns, and form evidence-based predictions rather than make obvious assumptions.
Through data-driven marketing, you’ll find out more than just who to target. You’ll learn where to find them, what they’re searching for and how to attract their attention.
How to Develop a Data-Driven Marketing Process
Data-driven marketing requires running tests and experiments. You can make educated predictions based on data, but it doesn’t guarantee you’ll be right. Following the scientific method is key when implementing a data-driven strategy. Collect your data and take a look at patterns and form a hypothesis. Run an experiment to see if your hypothesis is correct.
1. Collect data
Gather all of the information you need, compile it and organize it so you can easily find what you’re looking for. There are numerous ways of finding the data you’re after, so use the methods that work the best for the type of information you want to collect.
2. Identify trends and the logic behind them
Look at the different patterns that show up in your data such as customer buying habits, what demographic is engaging most with your brand and what things users rarely touch on your site. Use the data to think about why users behave the way they do.
If you’re unsure of why your customers are taking, or not taking, certain actions, it’s okay to ask them why through a survey or questionnaire. When you go to a physical retail store and get to the register to purchase something, it’s common for the cashier to ask if you found everything alright. If that cashier receives feedback from multiple customers that a specific product was difficult to find, they can easily relay that feedback to their manager who can then correct the problem.
You can apply the same concept to your website and ask users questions about their experience through a quick survey. It’s an easy and effective way to receive direct answers to help you analyze your data.
3. Form a hypothesis
Based on the trends and patterns you find in step two, come up with a theory about what you think will happen if you use certain marketing tactics. Make sure your theories include specific numbers and metrics so you can effectively measure the success of your strategy. You might predict that if you drop the price of a product by X amount, the sales will increase by X amount. Or if you change the layout of a page to put the call-to-action on the top of the page instead of the bottom, conversions will increase by X percentage.
Put your hypothesis to the test. Reduce the price of a product to see if the sales will increase. Change the location of your call-to-action to find out if conversions will increase. Running an experiment will allow you to collect more data and discover more about your audience and make marketing decisions in the future. Decide when you’re going to implement your marketing tactics and when you’re going to look at the results to give yourself a timeline to work with.
5. Evaluate results and draw conclusions
Once you’ve completed the experiment, take a look at the new data you’ve collected to see if it’s in line with your hypothesis. If so, great. Keep doing it! If not, you’ve eliminated a tactic that won’t work and can continue searching for one that will.
When interpreting the data from your experiment, you should look at the original theories you proposed. Compare the numbers and metrics and make decisions based on them. If you didn’t reach the numbers you predicted, look at how close you were. If you were almost there, it’s a sign that you’re on the right path and can continue tweaking your strategy and tactics to possibly achieve it soon. If you were far off, you might need to take a step back and rethink your plan. There will be times that your results don’t align with your predictions and that’s okay. It means you’ve eliminated a tactic that doesn’t work and you’re closer to finding one that does.
Do the process all over again. Create new hypotheses and run new tests so you can find what works and achieves the best results.
Common challenges and how to tackle them
Like all marketing strategies, a data-driven approach has obstacles. Getting your hands on the appropriate data, evaluating results and seeing those results for what they are can all be difficult. It will require multiple people and collaborative teamwork to make it work.
If there’s only one person trying to figure it all out on their own, it’s easy for them to be unintentionally biased toward results and it’s hard to collect all necessary data when working alone. Get a team together and collaborate often to gain insights and ideas from each other and correctly interpret data. Each team member should be honest with others and open to receiving pushback and criticism. Although it can be tough to hear that someone doesn’t agree with your idea or strategy, receiving feedback from teammates and having an open mind will help refine your strategy and make it the best it can be.
Measuring results from a data-driven approach
Data-driven marketing tools
Having the right tools is essential to ensuring your data-driven marketing strategy is successful. There are plenty of tools marketers use each day, but the tools used by data-driven marketers often need to have certain capabilities to make them worth using.
Adjusting your marketing to fit your target audience is a huge part of a data-driven strategy, so find applications and platforms that will help you do so. A tool like Optimizely can help you tailor your strategy to customer preference and make sure they have the best experience possible. Yesware can help you track email campaigns and figure out who is opening your emails and how they interact with what you send. SumAll provides social media data and insights and it can be used across multiple platforms to make sure you find all of the information you need. There are many other data-driven tools that can assist you in your marketing process.
The tools you choose will depend on the goals you set, the predictions you make and the data you need to gather and analyze. You may need to test out a few different tools to find which one(s) best serve your purpose.
Google Analytics is crucial to collecting and interpreting all sorts of data. The technology it uses is always up-to-date, very accurate and delivers real-time information. You can measure the ways people are engaging with your site and track each customer’s value, among many other useful pieces of information. You’ll also want to use spreadsheets, like Excel or Google Sheets, to organize some of the data you extract and want to analyze outside of the Google Analytics platform.
Wrapping it up
When a data-driven strategy is done well, it can turn out a valuable product. It may take time and a few experiments to figure out what works best for your company, but once you discover the right tactics, you can repeatedly come out ahead of your competitors.
Author Bio: Hilary Thompson is a freelance writer, small business owner, and mother of two. She loves to write about everything from business to parenting, sleep disorders, tech, and stress. She geeks out on digital marketing trends, weekend yoga, and will likely correct your grammar if given the chance. Coffee is her friend. You can follow her on Twitter @TypewriterHil.