Most marketers rely on gut feeling and guesswork to create hit-and-miss marketing campaigns and then hope they will achieve their goals.
And you can’t blame them. According to a survey by Campaignmonitor.com and Ascend2, 81% of marketers think implementing data-drive marketing strategies is extremely complicated.
But the days of guesswork are long gone, and more marketers consider data important in marketing. Today’s consumers appreciate personalized experiences, which is pushing the shift to data-driven marketing.
That, plus data-driven marketing has a lot of benefits compared to traditional marketing where marketers shot out of the blue and hoped something would stick.
Using data, marketers can effectively market to the right audience, improve customer service and boost sales. Relying on data means basing your decisions on facts and figures, and not mere assumptions.
In the following article, you’ll learn why the modern-day marketer needs to understand analytics. But first things first, what is data-driven marketing?
What is Data-Driven Marketing?
So, what is this animal we’re calling data-driven marketing? In a simple line, data-driven marketing is the process of optimizing your marketing campaigns based on the data you collect from customers. Data-driven marketers use data to predict customer’s needs and behaviors.
Data-driven marketing can also mean using data obtained from various sources to “…determine the ROI of marketing efforts like calls-to-action (CTAs), blog posts, channel performance, and thought leadership pieces, and to identify opportunities for improvement.” – Marketo
So, data-driven marketing involves collecting a lot of data about the customer to determine their present and future needs. It also means using data metrics to determine whether your marketing efforts are paying off and positively impacting your bottom line.
To learn more, let us discover why data-driven marketing is important. In other words, what are the benefits of data-driven marketing?
Why Data-Driven Marketing is Important
If you want to shun trial-and-error marketing and take the data-driven route, you’re probably wondering why data-driven marketing is important – and why every marketer should adopt this new approach.
Understand Your Customer Better
The more data you can collect about your customers the easier it will be to create buyer personas. More data from various sources such as your CRM, website, email and social media channels can help you to gain a laser-sharp understanding of your target audience.
More Successful Marketing Campaigns
Understanding your customer better means you’re able to create personalized marketing campaigns that resonate with your target audience. Or as Tom Benton says:
“The sheer amount of data from a near-infinite combination of media, devices, platforms and channels allows marketers the opportunity to deliver 1-to-1 customer experiences at a massive scale.”
The result? You can create more successful marketing campaigns that boost sales down the line.
Increased Conversions and Sales
As we discussed earlier, data-driven marketing involves using proven data to deliver better marketing and messages to your customers. We also said the process also means using metrics to measure the ROI of your marketing strategies.
Now, when you have the data, you can make improvements accordingly to boost conversions and sales. Without data, you’d be oblivious to the things that are negatively affecting your conversions and sales.
Influence Pricing Strategy
I bet you perform comparison shopping every time you’re purchasing a new product. That’s a good thing from a consumer point of view, but it means more competition for businesses – large or small.
“Pricing strategy is complex and incorporates a variety of factors including competitor analysis, production costs, consumer demand, industry needs, and profit margins. In recent years, it’s become even more challenging since digital tools enable price transparency across channels.” – AdRoll
Data-driven marketing offers you the industry data you need to define the perfect pricing strategy for various segments within your target audience. Learning how to examine robust data is the only way to remain competitive and determine consumer-based pricing strategies.
Spark Innovation
Why do you think marketers actively conduct research and surveys? Why do they mule over charts, graphs, and spreadsheets? Why do you go over analytics reports on the regular, and use tools such as Google Trends?
Well, data-driven marketers use whatever tool is at their disposal to aggregate data and find trending topics. Such data helps brands to develop new products/services, change/expand brand direction, implement effective customer service strategies and invest in new technology that moves the business agenda forward.
Increased Brand Loyalty and Customer Retention Rates
When you have a clear picture of your target audience, you understand their preferences and can meet them where you have the most impact.
On top of that, data-driven marketing will help you determine the best channels for promotion. You’ll deliver your message where the customer is most likely to see it.
When your customer feels valued because your campaigns are personalized, you boost brand loyalty and customer retention rates.
Other than the above, other benefits of data-driven marketing include:
- Increased customer engagement since you have a better understanding of your audience
- Gain competitors and industry insights, which give you an upper hand in a highly competitive marketplace
- More accurate forecasting – You can easily predict the future based on historical and real-time customer data
- Gain credibility with company executives – Analytics provide tangible proof of the return on investment (ROI) of your marketing strategies
With that out of the way, what challenges do marketers experience with data-driven marketing and analytics?
What Challenges do Marketers Experience with Data-Driven Marketing?
There are a couple of challenges that keep many marketers from taking the plunge. These challenges present themselves at all stages of data-driven marketing between the first and last touch points.
Data Collection and Management
Many companies are generating and gathering staggering amounts of data, which can easily intimidate marketers. As a result, many marketers do away with data-driven marketing to begin with.
In some cases, marketers don’t know where to gather the data and how to manage the data they collect. It’s an overwhelming struggle for marketers to collect customer information.
Understanding Technology
To be a data-driven marketer, you must understand the technology and marketing tools needed for data collection, data analysis, and market prediction.
Unfortunately, not every marketer is tech savvy, which presents a problem until you familiarize yourself with the relevant technology.
To make matters worse, the internet is rife with all manner of tools it can be difficult to choose the right ones for your business. For a list of popular tools, check out this list by Intellspot.
Data Analysis/Underutilizing Data
Another common challenge facing would-be data-driven marketers is poor data analysis. Since some marketers aren’t tech savvy and lack statistical knowledge, they end up underutilizing data.
They fail to interpret the data collected or determine which data is most useful. This usually leads to missed opportunities, and accumulation of dark data.
If marketers cannot use data insights effectively, they fail to create more targeted and personalized marketing and advertising.
All the same, how will a devoted data-driven marketer overcome the challenges of data analytics?
How to Overcome the Challenges of Data Analytics
The good thing is you can easily surmount all the challenges of data analytics without breaking a sweat or the bank. Here a couple of ways to point you in the right direction.
- Learn more about marketing analytics – Since time is a precious commodity and you probably already have your hands full, consider taking short courses on a site such as Udemy.com. Example topics to study include social media metrics, data analytics, software programs, data security/privacy and so on.
- Centralize data – Data silos, or data stored in many different places, make you job as a marketer harder. Set up yourself for success by using a data warehouse, which helps you to aggregate, integrate and manage data efficiently. Rather than pull data from various systems, you can pull and collate reports from a central database.
- Hire a data analyst or outsource to a specialist – At times, you simply lack sufficient knowledge to implement data-driven marketing effectively. If that’s the case, consider hiring a data specialist. Look for either a marketing or data analyst and preferably one with a master’s degree. Such candidates offer you the skills and expertise you need to own data analytics like a boss.
- Continuous learning – Marketing is a fast-paced environment where learning never stops. The tools and tactics that used to work a year ago are probably obsolete by now. That means you must continue learning if you must remain relevant. As such, keep abreast of technology, trends, customer needs and industry advancements.
We hope today’s post helped you determine why every marketer need to understand analytics. If you liked the article, please consider sharing it using the social media buttons below.