Using a data-driven approach to marketing can provide a significant competitive edge for businesses. In fact, organisations that are leaders in data-driven marketing are three times more likely than counterparts to say they have achieved competitive advantage in customer engagement and loyalty, and nearly three times more likely to have increased revenues, according to a recent survey of more than 300 executives by Forbes . The study concluded that the majority of business leaders feel that data-driven marketing is a critical driver for success in the global economy.
Data-driven marketing provides companies with marketing insight through analysing data. This can be primary data, gathered directly through customer surveys, or it can be secondary data, garnered from a wealth of indirect sources, such as through monitoring online search behaviour or interactions. Indeed, there’s now an unprecedented availability of data available to shape marketing efforts – from big data to transactional data and consumer activity. The volume of information and accuracy of tools available mean that companies are better positioned than ever before to transform data-driven marketing into profit. And executives are taking note of this opportunity.
A global survey of 3,000 marketing professionals by GlobalDMA and the Winterberry Group found that 74% expected to increase their data marketing budgets in 2015. Nearly half said their objective was to maximise the effectiveness of their marketing investments. Two-thirds said their greatest data marketing priority was to custom messages and personalise customer experiences.
While there are huge insights to be gained from the wealth of data available, a tailored approach is critical to ensure this information is leveraged effectively. As the underlying principle behind investing in marketing is to maximise return on investment, companies should be aware of their individual goals and the insights they need to drive profit. They should also adopt a holistic, unified approach to data-driven marketing – implemented across the entirety of their business.
“Effective data-driven marketing draws on resources from across the enterprise, not a single department,” says Bruce Rogers, Chief Insights Officer for Forbes Media. “And without data, marketing is not based on customer intelligence.”
The retail and travel industries are leaders in utilising data-driven marketing . However, with the right approach, all industries can benefit – increasing their customer engagement and profitability. Firstly, adopt a best-practice approach. This could mean learning from the efforts of your competitors, hiring a specialist or paying for consultancy services. Despite the additional cost, having a clear framework to drive your activity could be the difference between return on investment and a waste of time and resources. There’s a wealth of expertise to draw on – and it could certainly maximise your investment.
Secondly, streamline your activities as complexity is an insight killer. There’s a surplus of data out there, so limit your activities to platforms that will truly add value. Additionally, make sure you use technology to your advantage rather than letting it complicate your efforts. This could mean regular evaluation of both your research and your technological processes to check they create value.
Thirdly, adopt an integrated marketing management approach: by integrating people, process and technologies across your entire marketing activity, you’ll derive more powerful insights and greater clarity.
In addition, ensure you’re using metrics that measure business outcomes and increase marketing performance, rather than focussing on “vanity” metrics, such as Facebook ‘likes’. Decide at the outset what decisions you need to make to drive profitability and then structure your activities to capture this information.