It’s the nirvana to which all marketers aspire: Guesswork-free marketing. The good news is, you can get there using fact-based, data-driven decisioning.
Data-driven marketing delivers these key benefits:
- Improved ROI
- Faster speed to market
- Shortened learning curve
- Less trial and error
- More efficiency/less marketing waste
- Competitive advantage
Equally important, it justifies your existence to your CEO. Don’t underestimate that power. In today’s cost-conscious environment, the ability to measure performance on every one of your programs is priceless.
“But I’m already drowning in data,” you may be saying. “My problem is figuring out where to start.”
You’re not alone — we hear this frequently from clients, and there is an actionable path forward. Here are three simple Best Practices that will put you on the right road.
Step 1: Put the right team together
Data-driven marketing requires people with specific skill sets. You want people on your team who:
- Can research and understand the customer experience — who can be a customer, talk to customers, map the customer experience, and ask customers why they do what they do
- Have an inborn passion to learn and explore new ideas
- Are intellectually curious and naturally inquisitive
- Are highly analytical
- Understand behavioral data and the human nature that drives it, who can blend and interpret both to deliver deep customer insight
Step 2: Start small
We all want to measure what matters, but knowing what matters is half the battle. Consider starting with an exploratory customer value analysis (CVA). A CVA examines behaviors and transactions to provide insight and will help you weed out extraneous data. For example, you might want to look at:
- Frequency of purchase
- Items purchased
- Ticket amount
- Current customer value
- Potential value
A simple analysis like this can yield surprising results. Often marketers discover that their best customers (usually, their most profitable customers) aren’t who they thought. A CVA can also tell you who is likely to become your best customer and, just as important, who is not. Armed with that knowledge, you can target more effectively and adjust your spend accordingly. That’s a lot of guesswork eliminated.
Step 3: Avoid pitfalls
As you transform into a data-driven organization, watch out for:
- Strategies, tactics or media that can’t be measured — be careful with advertising and social media. Yes, they can be measured, and your challenge is to find ways to do so that are meaningful and make sense for your business.
- Metrics that don’t align with your business goals — if your business goal is to sell more tires, nobody will care about the increase in your Facebook fan base … unless those fans are clicking through to your website, downloading coupons, visiting your stores, and buying your products.
- People who can’t adapt to a data-driven marketing mindset, or who can’t see beyond the data to uncover hidden insights — if an art director tells you it’s all about creativity, run. Yes, creativity matters, but put hard data behind it and you will get magic. If an analyst points to his or her four years of graduate-level statistics, ask him (or her) what insights they gleaned from the data analysis. If they can’t tell you, hire someone else.
You don’t need an MBA to get going. Start with the simple Customer Value Analysis described above, and take it from there. You’ll find that data-driven marketing not only short-circuits the guesswork, it also justifies your marketing decisions to your CEO, cuts costs, and boosts ROI. Let us know how it’s going — leave a comment below or give us a call if we can help.
Mike Osborn | Managing Director
Mike founded Catalyst with Jeff Cleary in 1990. He served on the Direct Marketing Association’s Agency Council Strategic Advisory Committee and has been an ECHO Award judge. He has served on the boards of the Advertising Council of Rochester, Compeer and Mary Cariola Children’s Center.