The evolution of data-driven marketing

Marketing capability has evolved over the past few years, and as a result, organisations can customise their marketing and deliver stronger and more targeted messages faster. But is it that simple? Ten times the data doesn’t translate to ten times the marketing effectiveness, audience growth, and sales. Terms like “single view of a customer” and “360 customer view”, were once an exciting proposition for companies, only to soon realise that the investment far outweighed the return.

This article takes a fresh look at “data-driven marketing”, how companies should rethink their tech and data strategies and what marketing functions should focus on to attract and engage their customers.

What does it mean to be “data-driven”?

At a macro level, a “data-driven” organisation places the same importance on data as it does on other important assets like capital, people, and products.

A narrower definition of data-driven is “bringing more data to the table to make better decisions”. Sources of data can include:

• Demographic
• Behavioural
• Social
• Engagement
• Sales and transaction history
• And so on

What makes an excellent data-driven organisation?

Companies that succeed invest in quality. They build quality products, leverage quality partners and hire and grow quality people. The same can be said for data — a good data-driven organisation invests in data quality.

The two most important moments in a data point’s lifetime are when it’s collected and used. Nothing gets in the way of customer engagement like bad data, and if you can’t get the basics right, both the data and engagement can’t be trusted. Being data-driven begins and ends with high quality, reliable information.

Companies that focus on data quality:

Take care of it. For data, this means consistent and secure collection and storage.

Make it accessible. Teams responsible for data capture and activation are aligned, making access to data quick and easy.

Put it to work. Act on the data, then test and learn.

What helps improve data quality?

Data governance helps teams align on how data is captured and used. Unlike people, technology and capital — data can be copied. Understanding the current state of play and developing strategies to govern it will help improve data quality, insights and analytics.

Technology advancements have made it much easier to stream data back and forth in a clean and uninterrupted manner.

• For big organisations, cloud computing has made it easier to access data, Customer Data Platforms (CDP’s) make integration and centralisation of data easier, and new-age marketing automation platforms focus on bi-directional streaming rather than copying and storing information.
• For small to medium organisations, all-in-one CRM’s like HubSpot do an excellent job of aligning web, marketing, sales and data in one place to make it easier to build out connected customer profiles.

Insights and analytics allow companies to both group customers and recognise how they are different. Incrementally building up data insights and analytics offer the best hope for:

1. The right message, in the right place and at the right time to stimulate the customer to do something.
2. Answers to the “so what” that identify undiscovered opportunities and incrementally grow audience and revenue.
3. A sequence of discoveries that a customer might find out about your company to build affinity and a “this changes everything” moment.

What is good data-driven marketing?

Data has strengths and weaknesses, and it’s essential to realise that the picture of the customer will never be “complete”. Good data-driven marketers combine intuition and quality data to create tests and experiments to generate incremental growth.

Integrating experimentation on your website and in your marketing communications is the best and easiest way to find out what you don’t know. A well-run experiment can fill a gap quickly and easily, much faster than a post-purchase questionnaire or email survey. Even companies like Facebook and Google (that seem to know everything) run over 1,000 tests each day.

Personalisation is key to building relationships with your customers. Dale Carnegie, the author of How to Win Friends and Influence People, once said, “A person’s name is to that person the sweetest and most important sound in any language”, and the same can be applied when speaking with your customers. Customers expect that you’ll use what you know about them to deliver personalised experiences. They’ll happily share information if they know they will get something of value in return. So although the first name is just a start, a good data-driven marketer will understand that personalisation is the key to engaging your customers and keeping them coming back.

Why is data-driven marketing so important?

As a company, you compete based on your differences, and data may be the ultimate proprietary technology.

Customers now have access to a myriad of information about your company and your competitors that they didn’t have a few years ago. Namely:

Product — More granular data to help differentiate product offerings.

Price — Greater transparency with the rise of online shopping and comparison tools.

Place — Online, instore and mobile.

Promotion — On-line, mobile, social and programmatic.

Your customers have this information, so it’s important to showcase how you are different to encourage them to choose you. Companies try so hard to differentiate themselves, but if it’s already sitting there in the data, you need to make use of it.

The definition of big data is “a data set that is so large it can’t be computed”. So in a world of big data, a company that narrows its focus on what makes it different can often be the best way to gain a competitive advantage.

The focus for marketers is to almost certainly get (and use) bigger, newer and higher quality data. The risk that your competitors will find something that’s better and brilliant is too high to not invest in data-driven marketing.

How do I build up data-driven organisational capability?

Over the long haul, “data-driven” is about your organisation and the culture.

Here’s what you can do if your organisation is just embarking on its data journey:

Limited resource and talent -> Upskill or outsource

Quality unmanaged -> Get in front of it and highlight areas of improvement

Silos impede data sharing -> Reach out / grow relationships / understand and care about the process

Limited experience with data-driven marketing -> Experiment, test, experiment, test

So, where do I start?

1. Data-driven is a journey and not a destination. Focus on incrementally growing the data you have to improve your decision making. Don’t lose sight of your company objectives and ladder the value back up to the things that matter.
2. Recognise strengths and limitations in the data and combine it with your intuition to develop experiments.
3. Get cracking. If you’re not making a few mistakes, then you’re not pushing hard enough.

If you wait too long, other companies will move onto your patch and do better and more innovative things.