Raise a hand if you’ve heard the phrase, “We need to be data-driven”?
Keep it up if you have no idea how to actually put it into practice.
If that’s you, you’re not alone. While it’s no surprise that data has taken a front row seat in all areas of business, the words “data-driven” are nearing buzzword territory; it sounds like a good plan in theory, but can lack substance when it comes to putting it into practice.
“I hear ‘data-driven’ thrown around so often, that it’s begun to lose all meaning,” says Jessica Jones, ANNUITAS Chief Growth Officer.
So, what does being “data-driven” actually mean?
As customers put more and more value on personalized experiences, there’s a huge opportunity for data-driven marketing to drive growth in your organization—if you do it right.
How to Define Data-Driven Marketing
You’ll find many varying descriptions of what data-driven marketing means, and it can be challenging to cut through the noise.
We like how Deloitte puts it:
“Data-driven marketing is a way of executing customer communication and engagement, as well as identifying innovation opportunities, by making use of data and insights, while continuously measuring and optimizing.”
Or, in layman’s terms: Data-driven marketing improves how you market a good or service. It’s about looking at performance information to see what’s working and what isn’t—then learning from the results to adjust your approach.
Why You Need to be Thinking About Data-Driven Marketing
Data-driven marketing helps drive growth for your company—but it can also serve a crucial purpose internally.
Organizations often see marketing as a cost center, and it’s one of the first departments they slash during periods of economic uncertainty. In fact, according to McKinsey, six out of ten marketers reported significant budget cuts since the pandemic began in 2020.
Whether it’s because marketing is seen as a dispensable cost, or due to the persistent short-term thinking that organizations can “turn marketing on and off when faced with financial challenges,” in less mature organizations it’s oftentimes an uphill battle to prove marketing’s worth.
Historically, marketing has heavily relied on anecdotal or vanity metrics to support its existence. With data, you can change perception of marketing from a cost center to an investment by:
- Advocating for marketing: Marketing analysts, content writers and strategists who can provide data-backed connections to company ROI are better able to justify their initiatives.
- Optimizing attribution: The ability to identify where marketing has had an impact on conversions and sales lift can help you better track your efforts and make improvements to your approach in the future.
- Predicting future spend: Knowing which marketing initiatives led to success and which ones underperformed means companies can allocate budget strategically, accelerating growth.
Data in Practice
Understanding that data is important is the easy part. But understanding how it actually works in your organization and how to use it can get overwhelming, fast.
Data can play a critical part in decision making as it provides insights into customer behavior, preferences, and needs. By leveraging data, businesses can make informed decisions at every stage of the demand process, from understanding their target audience to optimizing their marketing campaigns.
1. Using Data to Understand Your Buyer
How can you identify your buyer, the issues they are trying to solve, and the channels they use to consume content? By leveraging data, your organization can pinpoint the needs and pain points of your ideal customers. By creating targeted messaging that resonates with them, you can improve the overall customer experience.
2. Creating a Data Value Chain with Progressive Profiling
Progressive profiling is a strategic approach to forms that involves gathering customer information over time through a series of questions or interactions, rather than asking for all of the information upfront. As customers engage with your content and respond to profiling questions appropriate to their buying stage, you can gradually build a comprehensive “Data Value Chain” that helps you understand their needs and preferences.
By collecting information through profiling questions, you can gather more than just basic contact information. You can also gain insights into your customers’ firmographic details and buying intent, allowing you to tailor your content and recommendations to their specific needs. Ultimately, this data allows you to personalize your marketing efforts, and both nurture and qualify your leads more effectively.
3. Evaluating Content Performance
Does your content answer the questions your buyer has at the exact point they are at in their buying journey? Is the content being served to the right person, at the right time? Data can—you guessed it—be used to answer these questions and more. Using insights gathered, you will be able to determine if your content is moving them forward in their journey, or if you are giving them information that may be more relevant at another stage in the buying journey.
4. Determining the ROI of Your Efforts
Finally, data is used to measure the ROI of marketing campaigns and determine the overall effectiveness of your marketing efforts. By tracking key KPIs such as qualified pipeline, sales lift, overall customer lifetime value, and other metrics that matter, your organization can evaluate the success of your demand generation efforts and make adjustments as needed to achieve sustainable growth.
The Cost of Falling Behind
The benefits of implementing data-driven marketing are clear. But what often gets overlooked are the costs of failing to adopt this approach. Some of these risks include:
1. No real-time feedback
Tracking how a campaign performs at launch helps you quickly tweak and fine-tune your strategy to ensure you’re hitting the right targets and making the biggest impact. While real ROI is determined after programs have had time to run, without in-the-moment feedback, you’re more likely to steer way off course or miss early warning signs that would be visible in the data.
2. No meaningful personalization
Learning as much as possible about your ideal customer through their demographics, interactions and purchase history helps you deliver better experiences. In a competitive marketplace, increasing customer retention and repeat engagement can grow revenue by up to 40 percent. Without collecting and analyzing the necessary data, it’s just not possible to build these personalized experiences.
3. No ability to replicate past success or avoid failure
Learning from both your successes and your failures is critical for marketers. Whether something goes well or turns out badly, it’s important to understand what factors influenced the outcome. Marketing teams that don’t collect and analyze data about their past performance will struggle to understand the factors that helped them succeed and held them back, making it much harder to learn from the past.
“Data-driven” is More Than a Buzzword—it’s a Need
Up until recently, data-driven marketing was considered a competitive edge. Today, it’s a must-have. If you’re not at the very least moving toward being data-driven, you’re falling behind. And yes, that starts with understanding what data-driven marketing is in the first place—then taking action to integrate it across your marketing efforts.
Without a strong company culture around being data-driven, where there’s a central hub of granular customer data that can be analyzed, interpreted and translated into evidence-based tactics, leaders as well as sales and marketing teams will continue to be in the dark. They’ll miss out on the deeper intelligence and behavioral changes that help prove their value, build deeper relationships with prospects and customers, and ultimately win big.
