One of the biggest benefits of digital marketing is its incredible focus on data, follow this guide for a full breakdown into data driven marketing.
Unlike billboards and print, digital marketing allows you to get a deep understanding of how your messages are working and how your audience behaves. You can then use this to make better decisions and stop wasting resources on users and campaigns that don’t convert.
In many ways, data marketing is the pinnacle of the trade – it allows you to get a complete image of all your marketing efforts and reach the right users with the right message.
However, to make the most out of data-driven marketing, you need to understand its origin, rules, and the best tools to execute it. In this article, we will cover all of this and give you some useful tips to make your marketing strategy more data-centered.
- What is data-driven marketing?
- How is this different from traditional marketing?
- The benefits of data-driven marketing
- Step 1: Collect user data
- Step 2: Turn data into smart data
- Step 3: Create funnels
- Step 4: Surprise users with personalization
- Step 5: Measure your success
- Data-driven marketing: the final word
What is data-driven marketing?
Data-driven marketing is a specific subset of digital marketing that leverages user data to increase the effectiveness of campaigns.
In most cases, when we speak about data in this context, we mean user data. The way your audience behaves and interacts with your content can tell you a lot about your marketing campaign, social media channels, website, or even your product. You can also use other data like social media analytics to see which channels work best.
Once you know how and where to find this data, the data marketing approach requires you to engage your users with personalized messages that convert. To do this, businesses create sales funnels that define where each user is in their customer journey and which messages should be used to address those users.
From all of this, you can probably tell why data-driven advertising is so popular. It allows you to make all of your decisions based on smart insights and get better results. It’s perfect for digital marketing, you can use it throughout the whole cycle: from the first time a user hears about your brand to the moment they become a loyal customer.
How is this different from traditional marketing?
Analyzing user behavior to make smart decisions has always been the focal point of good marketing strategies. Focus groups and market research still have an important place in marketing and are often used to identify personalized marketing trends.
However, data analysis in digital marketing has several advantages compared to the traditional approach. For example, it’s more accurate. While surveys and focus groups rely on customers’ statements (which aren’t always 100% honest), data never lies. The data you get from your digital channels is accurate and tells you exactly how your users interact with your brand.
It’s also more affordable and updated in real-time, so you can access it whenever you want and track changes. This is useful when you make a small modification to your marketing strategy and you want to instantly see how it’s affected your results.
The benefits of data-driven marketing
Why should you embrace a data-driven marketing approach?
Here are some reasons to consider focusing more of your attention on marketing data.
- Better ROI. When you leverage user data, you can increase your Return On Investment (ROI). According to a Forbes report, 57% of marketers who embraced a data-based approach saw an increase in their ROI.
- Higher efficiency. By analyzing user data, you can see which users are interested in your offer and which ones aren’t. You can then spend more time and resources on those who are more likely to make a purchase, making your marketing efforts more efficient in the process.
- Get more return customers. People love personalized recommendations based on previous behavior and interests. An Accenture study found that 91% of people are more likely to buy from brands that offer such recommendations. You can use customer data to turn first-time buyers into repeat customers and increase your revenue.
- Better conversion rates. Personalized content almost always leads to improved conversions. If you provide your audience with customized offers, you can increase conversion rates, customer acquisition, visitor engagement, and even improve your overall brand perception.
Step 1: Collect user data
As you might have expected, our first step is collecting user data.
If you’ve set up your digital marketing strategy properly, your customers should have lots of contact points with your brand online. Your social media, email, various touchpoints on your website (live chat, contact forms, product pages) – all of those are potential sources of valuable data.
The most obvious path to take here is Google Analytics. You can use it to see which demographics are visiting your website, as well as how they interact with the content. For example, you can see which pages are getting the most visitors and how much time those visitors are spending on each page:
However, there are some less obvious (but equally useful) ways to get user data from your website.
You can use heatmaps to see an exact overview of user behavior – where they scroll, where they click, and where they move their cursor. It’s the perfect visual story of your website interaction that can allow you to provide the best experience.
Investing in a CRM system is also a great way to track user data. Most such systems have elaborate analytics dashboards that show you all you need to know about your audience: demographics, purchase habits, previous interactions with your brand – their whole customer journey, essentially.
You can also find user data in your social media (Facebook is more detailed than Instagram or LinkedIn) and mail client analytics.
Whatever you do, make sure you’re up to date with the latest GDPR rules. You need to know when and how you can use customer data to avoid potential issues with users and regulatory agencies.
Step 2: Turn data into smart data
Raw data is useless unless you take it and put it into context. You need to analyze the data and make some conclusions that will give you a good base going forward.
The best way to do this is to use audience segmentation. So, once you’ve identified how you’re going to get user data and started extracting it, you need to start segmenting your audience. That will get you one step closer to understanding your users and, more importantly, engaging them with tailored messages.
You can segment your audience based on various factors you extracted from your data. Here are some popular techniques.
- Demographics. Age, gender, location, and other demographic factors are great ways to segment your audience. If you’re a shoe store, you’ll want to have personalized offers for older men, teenage men, young adult men, teenage women, and so on. The more groups you have, the closer you are to complete personalization, which is the ultimate goal of data-driven marketing.
- Purchase history. Using your eCommerce data, you can segment users based on their purchasing habits. You can have a whole subset of users who like Adidas more than any other brand from your shoe store and target them with tailored offers when you have a new collection.
- Economic status. You might want to send your big spenders different offers from your small-time, occasional buyers. Check out which users have higher value purchases and put them in a separate category to send them offers with more expensive items. Conversely, don’t spam your money-conscious buyers with offers they don’t want to splash their cash on.
Step 3: Create funnels
A good way to precisely track user data and engage each user with personalized messages is to implement a sales funnel.
This funnel is often used as a framework to help you track conversions and give some structure to your marketing communication.
It’s generally accepted that sales funnels have these four stages:
- Awareness. This is the stage in which your audience is just discovering your brand. They’re just becoming aware that you can solve their problem, so you need to focus on your USP – the unique thing that separates you from the competition.
- Interest. In this phase, your users have displayed some sort of – you guessed it – interest in your offer. They may have visited your website or liked your social media page. For these potential customers, you want to highlight your hero products or send them personalized offers with those products they’ve already viewed.
- Decision. Those users that have visited your website and came close to making a purchase are considered to be in the Decision phase. Perhaps they put a product in the cart and quit the process or enquired about prices, features, and special offers. You can target these users with offers like discounts or free shipping, as they likely need that little push to make a purchase.
- Action. Once a user makes a purchase, they’re in the Action stage. However, your work doesn’t stop here – you need to turn these customers into repeat buyers with personalized messages and special offers to keep them coming back.
You’ll find various examples of sales funnels online. They might have different names for stages or even introduce a few more but they all promote the same idea: identify where your users are in the purchase process and engage them with the right message to get them to the next stage.
Step 4: Surprise users with personalization
When you start creating messages to reach out to those users, you might want to check out some personalization techniques.
The fact that their offer is slightly personalized based on their interests, previous purchases, and demographics is bound to help. But, some advanced personalization might be just what you need to achieve that “wow” effect and impress your potential customers.
At Hyperise, we call this hyper-personalization, and we use it with images to achieve awesome results.
How does this work in practice?
Well, for example, you can personalize your website so that each visitor gets a tailored experience. Personalized CTAs can increase your conversion rates by up to 202% and users will certainly be impressed when they see their name.
You can also personalize your outreach efforts if you’re selling products more directly. With the use of name tags, thanks to our collaboration with TexAu, you can easily create personalized messages on LinkedIn that could end up looking like this:
This highly personalized approach uses customer data to deliver a customized message that includes your prospect’s name, the thing that connects you, and a personalized image.
Register for a free trial of Hyperise to try it out!
Step 5: Measure your success
Lastly, you want to use campaign data to see if your approaches are working.
You should be looking at your analytics regularly and use the information to change things around.
Here are some metrics you should pay special attention to.
- Website traffic (by source). Your website is your most important asset, so you’ll want to make sure it’s getting the attention it deserves. You’ll also want to see where those visits are coming from. There is no point in spending money on Google Search ads if most of your visits come from Instagram!
- Conversion rates. This signifies which percentage of your total website visits end up purchasing or performing any other actions you defined as conversions. It can tell you a lot about your product, website experience, and targeting.
- Cost per click/cost per mile. The effectiveness of your social media marketing campaigns is usually measured through one of these metrics. They show how much each click/1k impressions cost you. If you’re going for impressions (to build brand awareness), you’ll be looking at cost per mile. If you’re all about traffic, you should be looking at cost per click.
- Overall ROI. The mother of all metrics, ROI tells you how much you earned, compared to what you spent. You should carefully track your ROI to see how well your campaigns are performing and how much sense do they have from a business perspective.
Data-driven marketing: the final word
Missing out on the wonderful world of digital marketing data is one of the worst mistakes you can make.
It would be a shame to waste such an opportunity to learn more about your audience and all the ways you can improve your marketing efforts. So, keep a close eye on your metrics and get as much user data as possible. Then use it to deliver tailored messages to different audience segments and watch how everything works!
If you want to see how advanced personalization works, try out Hyperise.
Register for a free trial and see how customized messages can do wonders for your campaigns!