As marketers, we have access to a tremendous amount of data. But what are we supposed to do with it?
In this in-depth guide to data-driven marketing, you’ll learn how to collect, organize, and prioritize your data to create stronger relationships with your customers.
We’ll cover different forms of data, the tools to collect it, and most importantly what to do with it across all your marketing channels.
What is Data-Driven Marketing?
The strategic use of data has been advocated by business leaders for years now. Like most things, us marketers were the first to make use of it.
So, what exactly is data-driven marketing? Here’s a simple definition:
“Data-driven marketing is the use of data to drive strategic marketing decisions by turning data into insight. It is the practice of using data to personalize the customer experience.”
Let’s dig into this definition a little more by answering the question: why should I care about data-driven marketing?
- It helps make objective decisions: Marketing decisions are no longer driven by the HiPOO’s opinion. Instead, we use tangible insights collected from feedback provided by customer interactions.
- It allows you to personalize your content: With access to customer data, you can personalize your messaging and content based on their personal information and behavior.
- It provides access to granular measurement: Marketing isn’t a guessing game. Every part of the marketing funnel can now be measured. This reporting must then inform strategic decisions, and the cycle continues.
There are countless methods that data can enrich your marketing efforts and give birth to new ideas. Let’s dig into five steps to a successful data-driven marketing strategy.
1. Generating Accurate Data for Awesome Insights
If your insights come from inaccurate data, then you’ll make misinformed decisions. Similarly, if your customer database isn’t up-to-date, you risk creating marketing and content your audience doesn’t care about.
The data-driven marketing process starts with your data sources. Here, I’ll show you different forms of data and insight that will drive your data-driven marketing strategy.
Demographic & Psychographic Insights
First and foremost, you need to understand your customers on a deeper level. If you don’t know what drives your customers, then you’re not going to connect with them.
This process traditionally starts with demographic insights. Demographic insights include basic information, such as age, family status, and occupation. You can easily find a first pass at this information in Google Analytics:
Go deeper with psychographic insight. Use it to uncover information on your customers such as interests, beliefs, lifestyle, and social status.
Acquiring this information is slightly trickier and requires going deeper. Google Analytics can provide insight into your customers’ psychographic profile, but it’s limited:
Instead, try these two methods instead:
- Surveys: Send out surveys at scale to generate quantitative data on your customers. Ask questions about their challenges, why they do business with you, and other leading questions to paint a broader picture.
- Customer Interviews: Dig deeper into your customer’s motivations by talking to them directly. Go into the conversation with three to five questions and elicit true motivations on their responses.
- How to Generate More Targeted Traffic with Demographic Segmentation
- How to 10x Your Conversion Rate Using Psychographic Segmentation
Get the Bigger Picture with Consumer Insights
So far, we’ve covered your owned data. It’s time to broaden this insight by accessing data from the public domain.
Consumer insights are invaluable for this process. Yes, consumer insights do include your owned data. However, if you want to build a complete profile of your customers, you probably need to tap into a wider array of data sources.
For example, you can use Google Trends to measure the topics and interests of your customers. Learn what content to create and language to use in your messaging by monitoring certain keywords:
To access consumer insights with hundreds of data sources, use SpotRight. Let us generate insights from myriad data sources so you don’t have to.
Armed with these insights, you can uncover which influencers and brands your customer segments follow and buy from. You can also learn demographic and psychographic insights, such as interests, lifestyle preferences, brand affinities, ethnicity, and age range. You can see a snippet below.
Behavioral Triggers for Timely Marketing
Finally, there’s the data generated as your customers engage with your brand, website, and product. Behavioral data includes:
- The emails your customers open
- The pages they view
- The products they browse and buy
- The duration and frequency of their visit
Behavioral segmentation is simply the comparison of customer needs (as defined above) against their behavior during their lifetime as a customer:
Use these tools and methods to generate behavioral insights on your customers:
- Google Analytics: Discover the pages and content your customers are looking at most. How often do they visit your website, and what are the most common routes to conversion?
- Email Service Provider: Which of your customers open your emails the most? Which subject lines get opened the most? Are there formats or product categories that attract the majority of clicks?
- Product Data: Look at your ecommerce platform. Which product categories get purchased the most? Where do most cart abandonments happen?
Later in this guide, you’ll learn how to use this data to improve the overall performance of your marketing. First, let’s talk about how to create a fully data-driven marketing culture by bringing your teams together.
2. Building your Data-Driven Marketing Team
As a senior marketing leader, sparking cultural change can be challenging.
But if you’re serious about becoming a data-led marketing organization, you need to build and nurture the right team.
Here’s how you do it.
Step 1: Get Your Analytics in Order
Data-driven marketing means collecting the right data. No matter your business category, it’s important you get your analytics in place.
This process can be as simple as getting your Google Analytics goals and events set up. You may also wish to evaluate tools such as Mixpanel for customer-level analytics.
Having email marketing, social media, and CRM data in silos can lead to reporting issues. So, it’s important to have a centralized dashboard to bring all this data together. This way, you can measure the ROI of each marketing channel as well as your strategy.
You can use a tool like Geckoboard to build marketing dashboards and report on several data sources in one place:
Step 2: Define & Assign Your Metrics
Once your analytics systems are in place, it’s time to define key metrics and assign them to individuals on your team.
Start by setting some benchmarks. Look at the metrics that matter most for each channel and define an average over a set period of time. Example metrics include CTR & open rates for email, likes & shares for social media, and bounce rate and conversion rates for content.
Once you have set these benchmarks, you must assign specific metrics to members of your team. For example, you might task social media executives/teams with referral traffic and overall reach of your social content. Decide which metrics are business-critical across each channel and prioritize accordingly.
Now you know which metrics to measure, you must set goals that strive to improve them. These goals will vary from team-to-team, but they should improve the overall success of the business.
Let’s say you want to increase customer acquisition by 5% every month. What goals would you set to achieve this? For social media teams, it may be social shares or referral traffic.
Step 3: Regularly Report on Progress
Without regular reporting, you won’t know how well your marketing is performing. Empower your teams to report on their goals on a weekly and monthly basis.
Here, each team must run through their metrics. Use weekly meetings to review business-critical metrics, and monthly meetings to dig deep into granular metrics such as CTR, cart abandonment, social shares, etc.
Don’t just keep this insight to yourself. Share it with the rest of your company. Show the entire organization that marketing does indeed provide tangible results for the rest of the business.
Step 4: Use Data to Make Decisions
Now you’re collecting all this data; it no longer makes sense to make strategic (and tactical) decisions based on gut feeling alone.
Use this data to drive key strategic marketing decisions. You and your team may need to work on your analytical skills, but the payoff is worth it.
So, what does this data-driven decision-making process look like? Let’s say you’ve been creating content on Instagram for the last six months. At the time, it made sense, as it’s well documented to be fruitful for other companies in your industry.
However, when looking at the surface-level data, it’s not driving any new customers to your business. From here, you have a couple of options:
- Reallocate budget to a channel that is generating new customers for you, or
- Look deeper and see if your Instagram activity contributes to other metrics (e.g., branded searches on Google)
Having access to the right data allows for this kind of strategic thinking. Connect the dots by painting the big picture for all of your marketing channels.
3. Sell to Individuals with Website Personalization
Now you know how to collect, organize, and prioritize your data. How do you use it in your marketing?
According to Accenture, 75% of customers want to purchase from companies that remember what they purchased and knows them by name.
Which is why website personalization is critical to providing a delightful customer experience. Website personalization provides real-time customization suited to an individual user’s needs.
In this example, the first visitor is a woman from the USA browsing during the summer:
And this next visitor is a man from the UK, who has recently browsed Nixon watches:
Both pages cater to the individual user’s demographic segment and previous behavior. With the number of options available to consumers, this level of personalization simplifies the buying process by providing only the products they care about.
Let’s look at three ways you can use website personalization to serve your customers on an individual level.
Personalized Product Recommendations
In the example above, you saw how a user could be served different product recommendations based on several variables.
Traditionally, purchase history fuels this level of personalization. But thanks to the availability of real-time demographic and behavioral data, you can personalize the experience before a user ever begins a relationship with your brand.
To do this, you need the right tools. Software that supports this functionality include:
Smart Insights have done a full analysis of all available tools, categorized by industry and business type. I advise you to read it here.
While demographic data and behavioral activity are perfect for website personalization, let’s not forget the channels they used to reach you in the first place.
Provide personalized experiences, information, and layouts depending on which marketing channels they used to find you. As Daniel Eisenhut, Head of Professional Services at Emarsys says:
“Customers behave very differently according to the channel, both in terms of responsiveness and in buying strategy; fitting that into a multi-step communication framework is the challenge we currently face.”
Personalizing by channel can be as simple as acknowledging the websites they come from. For example, it’s common practice for startups featured on Product Hunt to welcome visitors from the platform on their landing page:
Three Forms of Website Personalization
We’ve covered two of the most common methods of personalized website content. There are countless others, and the options can be overwhelming.
Instead of listing them all here, here are three more that you should consider applying to your website:
- Predictive Recommendations: Have you ever purchased a product (or read an article) and seen a call-to-action that says, “You might also like…” or “Customers also purchased…”? These predictive recommendations are based on customer purchasing and consumption behavior. This tactic alone is responsible for 30% of Amazon’s purchases.
- Navigational Personalization: Based on a user’s browsing behavior or purchasing history, you can customize how they navigate around your website. This ties in with the above but instead tailors the home page and other elements of the customer journey.
- Contextual Messaging: As mentioned earlier, contextual messaging allows you to customize various elements of your website copy based on behavior, demographics, location and more.
4. Boost Engagement with Personalized Email Marketing
Marketing personalization isn’t exclusive to your website. Email is still one of the most effective methods of engaging with your customers.
When taking a data-driven marketing approach, you’ll enjoy a higher open rate, CTR, and most importantly, more sales as a result.
Nowadays, it’s easy to personalize the email experience thanks to sophisticated email service providers (ESP). Whether you’re using a lean system like MailChimp, or something more robust like Campaign Monitor, there’s no excuse not to send the right message at the right time.
Get Your ESP in Order
Getting started with personalized email marketing begins with acquiring the right data. Indeed, if you’re not collecting the right information, you’re going to be limited with what you can personalize.
Ensure you include the right fields in your forms. Whether that’s to download an eBook, or when a new customer buys something from you, you must collect the details to provide a tailored experience.
Once you’re collecting the right data, you must segment your email lists. Segmentation can help you categorize customers by purchase frequency, gender, and more.
Email segmentation variables include:
- Purchase frequency
- Customer lifecycle stage
Want to learn how to segment your email list properly? Check out our full guide here:
Getting this information together requires having the right software in place. Ensure your ESP can handle the type of customization and segmentation required for your goals. If your chosen software is limiting you, it may be worth considering a new platform.
Email Personalization Best Practices
Before we cover various email personalization techniques, it’s important to understand best practices.
It’s no use emulating an approach if you don’t know why it’d done. Following these best practices will help you personalize your own emails.
- First name usage: Always use a customer’s real first name when addressing them in your emails. If you don’t have first name data, don’t include a salutation.
- Go beyond the first name: Simply including the first name is no longer good enough. Use the behavioral and demographic data covered in this guide to tailor your emails based on the content they’ve viewed, their level of income, etc.
- But don’t overdo it: With that in mind, don’t go overboard. If you add too much personalization, you risk creeping your customers out. Limit your emails to a maximum of three personalized elements.
- Subject lines: According to Experian, a personalized subject line can increase your open rates by 26%!
With these best practices in mind, let’s look at specific personalization techniques you can apply to your email marketing.
Three Personalized Email Techniques in Action
Let’s dissect how three top brands have used personalized email to engage with their audience.
Starting with Banana Republic, who have taken the tried-and-tested birthday email and twisted it:
Here, Banana Republic has used an enticing subject line to get the recipient’s attention. It’s simple enough, but it’s the timing that makes the difference.
Instead of sending the email on their birthday itself, they send it four days before. This taps into the excitement the customer is already feeling. It also plants a seed on what they should do with their birthday money…
Next up is Monica Vinader. Here, they’ve taken personalization elements and applied it not just to the message, but the product itself.
By using dynamic content, Monica Vinader has included photos of their engraved products using the first letter of the recipient’s first name. This email takes the “first name” variable and amps it up to 11!
Finally, we have easyJet. When celebrating their 20th anniversary, easyJet didn’t just talk about themselves. Instead, they used customer data to put the spotlight on their customers:
Here, easyJet highlights the customer’s total flying distance, their first destination when flying with easyJet, as well as recommended destinations for their next vacation.
This is data-driven marketing at its finest. How can you take customer data and use it to celebrate their time with you?
5. The Data-Driven Approach to Content Marketing
The principle behind content marketing has always been a simple one: create engaging, educational, and empowering content for your audience to overcome their challenges and help them make buying decisions.
You now have access to the data that will make your content marketing even better. Here are four steps to make that happen.
Use the Right Tools in the Right Way
By now, you should have your analytics and reporting systems set up. Now it’s time to use those systems to inform and direct your marketing strategy.
Here are the data-driven marketing tools you should use in your content strategy, and how to use them:
- Analytics: By learning how your users interact with your existing content, you can use that behavior to inform future content efforts. Look into your most popular blog posts and lead magnets, common marketing channels that drive users to your content, and the topics that get the most attention.
- Automation: Analyze your email campaigns and see how well your nurturing activity is performing. How is your audience interacting with your content? Can you use these metrics to personalize your engagement? Your automation platform can answer these questions.
- Social monitoring: Use social monitoring tools, such as Google Alerts or Mention, to keep an eye on the conversation happening on various social media channels. What topics are people talking about? What is your audience complaining about? These questions can fuel your content strategy.
Create Data-Driven Content
Using the tools above, you can now organize your data to draw content ideas from. For example, you could use a spreadsheet that records social mentions and another that dives deeper into how your audience is engaging with existing content.
Keep your customer personas constantly updated. Use these as a guide for the content you create for each segment. It’s no longer good enough to create content for broad segments based on mere demographic variables. You must go deeper.
Get the Timing Right
Thanks to the tools (such as social listening) at your disposal, you can create content based on the real-time needs of your audience.
Look at current and rising trends. Which topics are up-and-coming that you can over-deliver on with content? Are there existing pieces of content that you can update to give an extra boost in search, referral, and social traffic?
Similarly, use this data to inform content formats and promotion channels. Consider expanding your content formats if you’re relying on only one or two. Use data to double down on your top traffic channels (both in volume and engagement).
Oreo still provides a poster-boy example of this in action. During the Superbowl blackout in 2013, they reacted quickly by “newsjacking” with visual content on social media:
Emulate this approach by monitoring the topics, events, and current affairs that matter most to your personas. Have a system in place to react quickly without having to go through the corporate bureaucracy.
Test New Content Approaches
Use data-backed decision making to test new content formats. Create processes for the content formats and channels that work first. Get creative with your content and take new risks.
You may be seeing a lot of success with story-driven content, highlighting customers, celebrities, and influencers. Why not try long-form, educational content?
For example, Huckberry creates story-driven content about various adventures they and their ambassador’s take. But they also experiment with how-to information, like this guide on “How to Keep Fit in Tight Spaces:”
Use data to inform these tests. If you see that your audience is sharing long-form content on social media, then consider testing this format out yourself.
The four steps above create a reliable feedback loop. As you test and expand your content efforts, the more data you must rely on and react to. Use accurate reporting, and you’ll have a system you can use again and again.
How are you currently using data to build a better marketing strategy? Have your metrics increased as a result of optimizing your customer experience in this way? Share with us in the comments below!