Is “data-driven marketing” truly revolutionizing the way we reach audiences? Or is it just another buzzword taking the business world by storm?

According to Teradata, data-driven marketing is either embedded or strategic for 78% of marketers.

So make no mistake: data is key in today’s measured and predictive climate. But what exactly is data-driven marketing?

In today’s guide, we’re going to define what it is, the traits all data-driven marketers should adopt PLUS actionable steps to apply data to your marketing activities and campaigns.

What is data-driven marketing?

Before you start using data in your marketing, it’s imperative to know what it actually is. Let’s start with a simple definition from Gartner:

“Data-driven marketing is a discipline for acquiring, analyzing and applying all information about customer and consumer wants, needs, motivations and behaviors.”

Data is collected from customer interactions and other sources. This data is then analyzed to determine benchmarks and goals. It is then used to decide upon effective marketing messages, creative and targeting to get the best results (usually in the form of conversions).

This approach is so popular because of the ability to accurately track and maximize ROI. Wasteful marketing spend can be re-allocated, boosting ROI.

Data-driven marketing has many benefits, including:

  1. Precision targeting: Customer insights are a game changer. Customer data helps ensure the right customer segments are targeted.
  2. Efficient media spending: Programmatic marketing and advertising technologies have become more popular in recent years. Brands and agencies alike are removing the guesswork from their paid marketing efforts. Channels and creative can be optimized more accurately and automatically.
  3. Relevant messaging: With more customer insight comes more sophisticated messaging and creative. Granular messages can be sent to the segments who are most likely to act upon and benefit from them.

In short: data is part of the same ecosystem that channel and message sits in. The data helps you make the decisions that affect the channels you target and creative you build around it.

Metrics to measure for success

In order to get the most from data, you must measure your results and collect data that affects it.

Knowing the right metrics means making decisions based on facts and numbers. Your marketing will operate like a well-oiled machine, resulting in an increase in customers, revenue and ROI.

The metrics you measure depend on your overall goals. Most metrics, however, can be placed into one of five different categories:

  1. Investment: How much do you currently spend on marketing activities? What’s the ROI of those efforts?
  2. Users: How many visitors/downloads are you generating? How long are they spending on your website and in your product?
  3. Social & Sharing: How often does your content get shared? How engaged are you with your audience on social media?
  4. Leads: How many subscribers or leads are you generating from your marketing efforts?
  5. Sales: How many of your visitors, leads and subscribers are converting into customers?

Let’s look into some specific metrics that marketers measure on a regular (and often real-time) basis.

Brand awareness

What used to be a fluffy term now has a rightful place in the data-driven marketers’ arsenal. Oftentimes, brand awareness can be the first step towards a sale.

If you’re running Facebook ads, look how far they’re reaching. Or, head to Google Search Console to see how many people are searching for your brand:

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As your audience become more exposed to your brand, the more top-of-mind you’ll be. Retargeting efforts can help maintain a constant presence with your target audience while guiding them further down the funnel.

Acquisition cost

How much does it cost to acquire a new customer, on average? Customer acquisition cost (CAC) can provide key insights on your marketing spend.

Find out which channels are leading to assisted conversions and which are directly responsible. Google Analytics can provide this kind of insight with ease:

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On-site metrics

How your audience interacts with your website can be a huge source of insight. Time-on site, top content and time-on-page all provide data that can be used to optimize your marketing message.

Bounce rate, for example, can illustrate how well your is resonating with audience segments. From here, you can decide to refine the audience you’re attracting or optimize the message, using A/B testing tools (such as Optimizely).

Retention

A popular study by Bain & Company found that a 5% increase in customer loyalty can boost profits by 25% to 95%. Therefore, retention metrics must constantly be measured and optimized.

Find out how often your customers are returning. How often do they purchase? Lifetime value (LTV) is a worthwhile metric to monitor and grow over time.

Data sources you can transform into valuable insight

Where and how you collect data is just as important (if not more) than what you do with it.

One of the primary objectives of data-driven marketing is a better understanding of your customer. If your can understand who your customers are and what drives their decisions, you can create better marketing that attracts and converts them.

There are many data sources that will fuel your marketing insight engine. Let’s take a look at the most common sources and how you can utilize them to create better marketing.

Identity data

Understanding your customers means knowing them on an individual level. Having a view on the single view of your customer is key.

This data involves being able to identify each of your customers uniquely:

  • Name: Title, first & last names etc.
  • Geolocation: This can be as granular as their postal address details, including street name
  • Contact details: Email address, telephone number and the like
  • Social network details: Twitter, Facebook, LinkedIn etc.
  • Account details: This could be a unique identifier e.g. user ID
  • Job details: Company name, job title etc.
Quantitative data

This can also be defined as “measurable operational data.” This helps you understand behavior patterns and historical data on interactions with your business:

  • Transactional: What they purchased, how many times they purchase, LTV etc.
  • Communication: The channels you’ve reached them through, open/click-through rates etc.
  • On-site behavior: Pageviews, avg. time on site, product pages visited etc.
  • Social behavior: The number of times they’ve shared, liked or generally engaged with your brand on social media
  • Customer service: Number of queries and complaints
Descriptive data

You need to understand the interests and psychographics of the individual customer. This will help you create better customer segments and create messages that better serve and convert:

  • Family info: Marital status, no. children etc.
  • Lifestyle: Where do they live? What car do they drive? Do they have pets? What’s their level of income?
  • Career: Are they a student or professional? Executive or blue collar?
Qualitative data

Finally, qualitative data gives you a better understanding of your customer’s motivations and challenges. Customer interviews and questionnaires usually yield this insight:

  • Attitude: How do they feel about your product/service? How do they rate customer experience and service? Are they likely to purchase your product again?
  • Opinions: Top brands, favourite influencers, favourite color etc.
  • Motivations: Why do they use your product or service? What was the primary reason for doing business with you?

Align these data points with your core marketing goals. Figure out which data sources will best inform your campaigns and solve your problems.

Tools and technologies to automate and expand your efforts

One of the biggest challenges we hear when talking about data-driven marketing is “how do I access all this data?”

The biggest bottleneck, of course, is technology. It’s the bridge between the data you collect and the insight you can act upon.

There’s a whole host of tools out there, and to list them all would take a blog post in itself. Instead, we’ve decided to list our favorites.

For the sake of this article, we’re leaving out the obvious suspects – i.e. Google Analytics, AdWords and the like. Instead, we’re listing third party tools that can supercharge your existing data-driven marketing activities.

Geckoboard

When it comes to data-driven marketing, visibility is key. That’s why Geckoboard is an invaluable tool to keep on top of your core KPIs.

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Using Geckoboard, all of your core metrics are displayed on a TV dashboard in real time. This allows you to track your goals while keeping your team aligned.

The KPIs and metrics you can measure are endless, but examples include:

  • No. of visitors to your website (including realtime)
  • Customer support queries
  • Avg. time on site (and other behavioral metrics)
  • Conversion rate
  • Retention rate
  • Revenue/invoice amounts

It also integrates with over 60 different tools, as well as spreadsheet integration that displays raw data in a beautiful format. If you’re more technically minded, there’s an API that will allow you to integrate with other third party or in-house data sources.

SEMrush

Data, when used properly, can help inform the most important digital marketing channels. SEMrush gives you insight on SEO, paid traffic and social media, so you can direct your efforts more accurately.

Let’s break down each set of features:

  • SEO: SEMrush’s SEO tools give you insight on the competitive landscape and keyword research all the way down to on-page technical issues. It’s everything you need when planning and measuring an SEO strategy,
  • Paid Advertising: Managing certain AdWords elements, such as negative keywords, can be hugely time consuming. SEMrush’s tool makes it as easy as clicking a button. Optimizing keywords, copy and visual content is all super easy.
  • Social Media: Social monitoring is important for brands measuring what their customers are saying. The real value, however, is in the competitive insight. See how well your competition is performing and create reports that prove performance and ROI.

Litmus

Email marketing platforms provide a host of information on performance, but are usually only limited to open rates, clicks and the like. Litmus provides more granular information on your email marketing performance.

With Litmus, you can track engagement metrics of your emails – such as duration spent reading and geolocation. Furthermore, you can segment these metrics by device and app, allowing you to optimize your emails for all inboxes.

One thing to note is that Litmus is not a standalone ESP. Although you can code and design emails on the platform, it integrates with all major email marketing services.

SpotRight

At SpotRight, we live and breathe data-driven marketing. So we felt it would be fair to give ourselves a quick shout-out.

The SpotRight platform provides marketing intelligence and insight by linking social media behavior with real-world market data. This allows marketers and agencies to focus their advertising, content and influencer marketing efforts by ensuring they create the right message for the right audience.

We’ve gathered billions of connections and relationships and linked it to proven, actionable data at an individual level. We make this insanely deep set of consumer insights available in an easy-to-use format to help you craft awesome strategies and bring it them life.

Funnel.io

Paid advertising is a “deep metrics” game. When you’re dealing with different platforms to run your acquisition efforts, tracking performance can be tricky. This is where Funnel.io comes in.

Funnel.io connects with 214 ad platforms (at time of writing), allowing you to visualize and crunch the raw data from all of your paid marketing efforts.

BuzzSumo

In a world where “content is king,” having the data to inform topics and themes is key. This is where BuzzSumo becomes a tremendous help.

BuzzSumo pools data from content all over the internet, providing you with social media and SEO insights on the top performing content around a topic. This helps you understand what’s working and what isn’t, as well as the formats of content that resonate best with a particular audience.

Furthermore, it provides data on sharers. In other words, you can identify those who liked and shared certain pieces of content. This can be a huge help for outreach and distribution efforts.

3 data-driven marketing campaign ideas

Now you know the importance of data and how to access it. The question is, how can this insight improve your marketing?

Before we get into that, there’s one thing you need to bear in mind:

Data-driven marketing is both contextual and precise. The data you yield must be taken from within the context of how it will be used. This includes elements such as geolocation, device, language and time.

From a precision marketing perspective, this data gives you an understanding of consumer behavior, needs and interests. Knowing this will help you target the right message to the right segment of your audience.

With that in mind, let’s dig into three ways you can apply data to your marketing efforts.

Landing pages

Landing pages are key when you want users to take a specific action. They can tie directly to product or service offerings, as well as the channels that drove them there.

By using data, you can tightly align your landing pages to audience segments. Despite offering the same thing on each landing page for a particular product, the message can be tightly aligned with specific personas.

Take a look at this example from P2Life:

Despite targeting several different audience segments, this one talks to the swimming fanatic who has a busy work life. They immediately tackle the pain point of this persona in the headline, making it clear who it’s talking to.

Email marketing

Email is a channel that has a ton to benefit from data. Send emails triggered by a behavior (purchase, opt-in, page visited etc.) and create a message that encourages them to take the next step.

Segment your audience to create persona-specific messaging, like promotions or messaging aimed at women aged over 50 in California. Tighten the message to their specific needs and you’ll see click-throughs and conversions increase.

This triggered email from Etsy is simple but effective. It’s sent immediately after a new user makes their first purchase. This helps with customer retention, striking right after the user has already had a delightful experience with Etsy’s brand.

Retargeting

Retargeting is popular due to how well it engages with audiences and boosts loyalty. It’s an approach that needs data to be truly effective. The message served depends on elements such as user behavior and geolocation.

This ad from Expedia targets users that were already looking for holidays, flights or hotels:

It’s targeted towards users who already expressed an interest in those deals. They’re at an appropriate stage in the funnel that “Book Now” is a relevant call-to-action.

From these examples, you can see data has two key benefits:

  1. Who to target, and
  2. How to attract them and encourage action

Look at the data available to you as well as the channels you use to drive acquisition. Find opportunities to boost conversions from the insight these sources provide.

Brands that nail data-driven marketing

The ideas above should put you on the path of executing on a data-driven marketing strategy. But nothing gets the creative juices flowing like success stories.

To wrap-up this article, here are five brands who have nailed their data-driven marketing efforts. Take their example and use them as a reference when executing your own strategy.

GreenPal

This “uber for lawn care” brand were running AdWords ads targeting specific geolocations with some success. They were seeing great click-through and conversion rates, but they wanted to improve on it.

The goal was to make each landing page more contextual to the user. Using census data, they began with home values and average income of those in the Nashville area.

They found that those in the East were heavily populated with price-sensitive consumers. With this insight, they segmented targeting in this area with ads that included price-competitive messaging, with a landing page to match.

The result? 200% increase in CTR and a 30% increase on conversions.

Use consumer data to match your messaging to audience values. This level of context requires some work, but the results speak for themselves.

CrazyEgg

As a conversion rate optimization company, CrazyEgg are serious about boosting their own results. In this case, they yielded data from the best source available to them – their customers.

They conducted interviews with both existing customers and prospects alike, asking the latter why they didn’t buy. They found that many people were confused about what their product did, and even compared it to Google Analytics – something that could easily be avoided.

From this insight, they decided to create an explainer video. Not only did it describe what the product does to their audience, it showed them.

The result? A 64% boost in conversions.

Don’t just look at the numbers for solutions. Qualitative insight can be found by talking directly to your customers.

pCloud

Sometimes processes need to be broken down into smaller steps to be fully understood. This is exactly what pCloud did when they set out to optimize their marketing funnel for a new feature.

Upon launching the new feature, an ad campaign was created, with optimization taking place one month later. In order to fully understand their users, they monitored every step their audience made.

By doing this, they saw that users were abandoning the funnel at a particular step. So the marketing and engineering team worked together to make the process simpler and reduce friction.

The result? 135% increase in conversion rate

In order to get the full picture, treat every step of a process as a funnel in itself. Buying cycles are complex these days. Each step of your funnel may be a separate touchpoint to the user, so begin treating them like one.

Hootsuite

When Hootsuite changed their model from 100% free to “freemium,” they uncovered some problems. Instead of maintaining the same growth in free users with a conversion to paid, they saw a drop-off in both.

To see where they were going wrong, they looked at user data by segmenting free and paid users. From here, they could see the features that “casual” users were using, and which were most popular among paid users. They then restructured their messaging and tiered pricing strategy to reflect this.

The result? Both free and paid signups began to grow. Hootsuite are now at 10 million users worldwide.

Sometimes, growth can be found on the inside. Look at how your customers are using your products and services. Test and optimize your value proposition based on this internal insight.

Conclusion

Growth is a numbers game. As such, numbers – and data in general – is needed to win. Start looking at data as a friend instead of an intimidating force to be reckoned with.

In this article, we’ve given you the tools that will help you uncover insights that will drive results. Not only that, but now you know what data to uncover or collect and how to use it.

What does your data-driven marketing strategy look like? Have you seen better results since embracing it with open arms? Share your experiences in the comments below.