How to build a data-driven marketing strategy

CHRIS WARD
Deputy Editor of MyCustomer.com Sift

Having a data strategy is by no means a new discipline for marketers. Even back in the 1960s, pioneers such as Robert Kestnbaum were outlining new and imaginative ways to collect and analyse customer data to deliver more relevant marketing campaigns.

But while database marketing was for so long seen as a specific type of marketing in the subsequent years that followed Kestnbaums’ innovative work, the relatively recent advent of Big Data means that data analysis is now no longer just viewed as critical to one marketing function, but every marketing function.

American professor of psychology Dan Ariely famously described Big Data as being “like teenage sex – everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is doing it, so everyone claims they are doing it” - a statement germane to what marketers were experiencing in the 2000s, when consumer data levels first truly exploded. However, in the last five years a seismic shift has occurred that makes this less and less representative.

Marketing is now predominantly a data science operation, and what’s more, the technology is there to assist this – a fact that consumers are well aware of. 100% of marketers state that successful brands must use customer data to drive marketing decisions, while IBM research shows that 75% of consumers now “expect organisations to understand their individual needs”. Brands are constantly referred to the need to turn their marketing operations from art to science. Subsequently, marketers must have a robust data-driven marketing strategy in place to ensure they not only capitalise on the Big Data opportunities, but also satisfy customer requirements that are frequently being made a larger part of their remit.

Strategic importance

A key factor driving this need is customer engagement. A 2014 study from Yankee Group found 64% of consumers said they needed to be connected to the internet at all times, a number that is rapidly increasing as more devices surface. With a separate study from Shopper Sciences stating the average number of sources of information people use to make a purchasing decision through their customer journey is up from 5.3 in 2010 to 10.4 in 2014, using data to understand when and what to target and engage prospective customers with is becoming more vital. It’s the combination of being proactive and reactive.  

“Businesses and brands must be able to engage effectively with customers to market successfully to them.  This may seem obvious, but harnessing rich customer data and using it to drive a marketing strategy is the best, if not, the only way to do this well,” says Jason Lark, managing director at Celerity Information Services.

“A purely reactive marketing approach is not enough. Cultivating great customer relationships takes time and planning and rich data is a key component. Data enables you to reach out to your customers in a targeted and meaningful manner, ensuring that the age-old marketing adage is fulfilled – allowing you to get the right message to the right people at the right time.”

And Kate Cooper, CEO of Bloom Worldwide agrees, stating that marketing without a data strategy is now too hazardous for targeting the modern-day consumer:

“Tactical marketing carries risk – it’s short-term and there’s no guarantee on results. However, a data-driven marketing strategy is formed by data such as sales stats, audience profile segments, customer loyalty, competitor performance and previous marketing campaign stats which allows businesses to base their strategy on what is really needed for both the customer and the business, rather than simply relying on guesswork/short-term fixes.”

However, such strategies are not commonplace. As Axel Schaefer, senior manager, strategic marketing EMEA at Adobe Systems, notes: “Today’s marketing leaders are expected to strategically use data, and activating programs based in the insights derived from what customer or visitors share with them. Although there is plenty of data available (data on customers, prospects, competitors, product lines, and others), very few marketing organisations truly understand what to do with it.”

So how can you build a data-driven marketing strategy?

Determine how data-driven you are as an organisation at present

As a first step on the way, companies should conduct a self-assessment in order to define the status quo.

Schaefer explains: “It’s essential to identify the areas of strength and those where your organisation needs to put more focus in order to achieve a sustainable organisation. Examples could be getting aware of the available data sources, understanding the goal setting across channels that may lead to common strategic goals, etc.

“As an organisation that wants to execute on data-driven marketing, all involved need to be very aware of the available resources, the restraints, requirements and needs, in order to develop actionable steps to a data-driven strategy roadmap.”

Determine what drives your decision-making

“Before any data can be collected, before any analysis can begin, and before any results can be sought you must first decide what the key driving factor is for any decisions you make,” advises Kentico’s Stephen Griffin.

What are your KPIs? Are you solely looking at revenue or income? Do you want to create an exceptional customer experience for your current customers? Are you only interested in attracting new customers or would you like to re-engage with old ones? Knowing what you really want to achieve sets you on your way to finding out how to achieve it.

Establish what data you need to collect to support your decision-making process

“Collecting the right data is what could make or break the entire process,” notes Griffin. “Having the wrong data will send you spinning into markets you just can’t handle or will just leave you scratching your head about where to go next.”

Divide your search criteria into quantitative (what happened? – number of site visits, number of downloads, etc.) and qualitative (why it happened? – customised landing page, customer specific offers, etc.).

There is a myriad of information that can be collected. You need to decide if you want information on a person’s buying habits, what pages they like to visit, what do they interact with most, etc., or their personal info such as email, address, age, etc.

Griffin continues: “Decide on the right info to give you the correct view of the customer to allow your decision making to become simpler.”

Collect the data

Determining how to get data in a nonintrusive manner should be a marketer’s first objective, because while a glut of customer data may be available to marketers, consumers are becoming less patient with brands that encroach on privacy, and have more power to cut brands loose when they do overstep the mark.

According to findings from the Aimia Institute, the data company that oversees customer loyalty schemes including Sainsbury’s Nectar card, over half (57%) of consumers are already taking steps to actively avoid companies, with a variety of methods including unfollowing brands on social channels (69%), closing accounts and subscriptions because individuals don't like the communications they are receiving (69%) and opting out from the majority of company email communications (58%).

Part of a marketer’s data collection remit must be to identify what data can be collected from first and third party sources without disrupting a positive customer experience. Only then can marketers start asking the following questions in the data collection process:

• Are we going to use contact information forms on your website?
• Will we have surveys available at certain touchpoints on the customer journey?
• Do we require the collection of geographical locations based on IP addresses?
• Does the number of page visits on the “About Us” page of our site have a bearing on buying habits, and if so do we collect that information?
• Do we have club membership forms?
• Are we carrying out in-store surveys?

This particular step “should also be a continuous one even as you move through the entire process”, says Griffin. The moments evolve. Buying habits differ, new trends emerge, technology advances, and people change. It is important for data collection points to remain open to change.

Analyse the data and create buyer personas

The key aim of data collection is to glean a detailed level of insight that will drive future marketing campaigns. “Data alone is not going to form the best marketing strategy,” says Kate Cooper. “Data driven marketing requires a top layer to be added. Insight. This is when the marketing team uses the data analysed to form a hypothesis, vision and ongoing strategy.

One core objective for many marketers is to develop buying personas from the data, with the Holy Grail being to create a single customer view (SCV), based on what information is gleaned about who each customer is, what they like to search, what they like to buy, what interests them and what influences them.

“All of this accumulated, highly valuable qualitative data must be well managed, and scored and used to inform a single customer view (SCV),” says Jason Lark. “Information can be scored on the importance and relevancy of different attributes and then used to inform the marketing strategy – how you will use this knowledge to reach your end goals. For example, this might help you make decisions as to what technologies can be used to support this process.”

Roll out your customer-focused information

With the groundwork done, you should now know what you’re trying to achieve, collected the data that is needed to achieve it and conducted analysis on it to find insights and build personas. Now it is time to build your content around your personas and put the right information in front of the right people at the right time.

Griffin says: “You want to ‘WOW’ your customers with how well you know them and delight them with the fantastic ‘personal’ offers you have for them. Show them new items and trends that match their persona that they may never have seen without you. In every channel and through all stages of the buying process, provide an experience akin to a personal shopper in a top boutique and keep your customer coming back for more.”

It is also at this point that marketers are able to incorporate technology such as marketing automation to ensure their content is also highly personalised. And while this might be the point that makes a data marketing campaign most susceptible to customers potentially opting-out of communications as mentioned earlier, it is also becoming increasingly expected among certain sections of technology-savvy consumer.

According to a survey from 3radical, 45% of consumers state they are unlikely to buy or engage with brands if they don’t make things relevant and personalised. And 30% of consumers say they will simply ignore communications from even their favourite brands if the marketing isn’t bespoke and targeted, even potentially leading to them ending a brand relationship altogether. Only with a robust data marketing strategy can these elements be achieved.

Measure ROI

Measuring ROI provides marketers with an opportunity to assess where analysis and insight is leading to a genuine return, but is often the hardest thing to monitor, as the statistic from a recent Kentico survey which states that only 17% online marketers constantly measure effectiveness, clearly highlights.  

You need to highlight the importance of the marketing team in the overall business value. Use the answers you generated when you determining what drives your decision-making, and use data to show the influence the process has had. Do you now have more customers? Are older customers returning? Have page visits or downloads increased on your site? All these things can point towards a successful data-driven strategy helping to improve the business value.

Repeat and improve

Remember: the process should be ongoing. As Schaefer notes: “Data-driven marketing needs to be a continuous and sustainable effort.”