Getting the Most Out of Data-Driven Marketing
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How well do you know your prospects and customers?
This question lies at the heart of what we call data-driven marketing. Because the more you know about the people you contact, the better you can target your offerings. Nowadays smart marketers are increasingly taking advantage of data to get the most bang from their marketing budgets.
Suppose that you offer a deal on a new razor, and limit the audience to adult men. Or take people who already eat fish at your restaurant on Tuesdays, and promote a Friday fish fry. Or laser-target a new lifestyle product to the exact demographic group that is most likely to purchase it. All of these are examples where a little bit of data analytics can make a big difference in the success and response rate of a marketing campaign.
According to UK data marketing firm Jaywing, 95% of marketers surveyed personalize their offerings based on data, although less than half currently measure the ROI of these efforts, and less than 10% take advantage of full one-to-one cross-channel personalization. But these efforts are poised to keep growing, notes their Data Management Practice Director Inderjit Mund: “Data availability is growing exponentially. Adopting best practice data management is the only way marketers can maintain a competitive advantage.”
Of course, data-driven marketing can also go sideways. For example, bestselling business author and television host Carol Roth once found herself peppered with offers for baby merchandise – including an unsolicited package of baby formula – even though she is not the least bit pregnant. Her suspicion? Purchasing baby oil regularly from a major chain store, which she uses in the shower, made their data wonks mistakenly think that she was a new mother. Worse yet, this kind of targeted marketing also led the same chain to unwittingly tip off a father that his daughter was pregnant.
This really sums up the promise, and the peril, of using data to guide your marketing efforts. Do it wrong, and you not only waste marketing resources – you risk appearing inept, or worse, offending a poorly targeted segment of your market base. But when you do it right, you can dramatically improve the reach and efficiency of your marketing for a minimal cost.
This aligns very closely with our view of a marketing environment that is increasingly fueled by data. Among the best practices recommended by Jaywing for data-driven marketing, data quality is front and center with guidelines such as focusing on data management, having the right technology in place, and partnering with data experts. And they are not alone: according to a recent KPMG CEO survey, nearly half of respondents are concerned about the integrity of the data on which they base decisions.
There is a clear consensus nowadays that powering your marketing with data is no longer just an option. This starts with ensuring clean contact data, at the time of data entry and the time of use. Beyond that, smart firms leverage this contact data to gain customer insight in demographic areas such as location, census and socioeconomic data, to add fuel to their address or email-based marketing. With cost-effective tools that automate these processes inside or outside of your applications, the days of scattershot, data-blind marketing efforts are quickly becoming a thing of the past.