Data and Technology

What is Data Driven Marketing?

September 6, 2022

Data runs the world, and marketing is no exception. Today’s marketers can’t just rely on their gut—with competition fiercer than ever, brands need the numbers to back up their strategies.

With the right data at their fingertips, marketers have the creative freedom to experiment more boldly than ever before, with one key difference. With data, they’re far better equipped to accurately forecast the success of their campaigns.

Becoming data-driven has its unique challenges: gathering enough relevant data, having the right resources to properly implement it, turning it into engaging creative—and that’s only the beginning. But those complexities can’t deter marketers when being data-driven is paramount to brand success.

Here, discover what it takes to be data-driven, how to turn initial challenges into groundbreaking opportunities, and create the building blocks of a data-rich strategy that delights customers every single time.

What is Data-Driven Marketing?

Data-driven marketing is when brands use their insights into consumer behavior—such as customer data—to build their strategies and campaigns. In this case, marketers look at their existing internal data before building any campaigns.

How is this different from traditional marketing? Rather than building campaigns using data from their own customers, traditional marketing involves purchasing pre-packaged market research on similar segments. From there, marketers make educated guesses as to what will resonate with their target customers.

Simply put, while a traditional marketer would research a demographic similar to their customers and ideate campaigns they believe will resonate with that audience, a data-driven marketer would go straight to the source, using zero-party and first-party data to create tailored campaigns.

Traditional marketing has its successes, but as customers evolve more rapidly than ever, brands simply cannot afford guesswork. They need certainty, and that’s where data comes in.

What You Need to Understand About Data

It’s a data-driven world, but what does that mean in the context of marketing? Unlike scientific research that seeks to make sense of every single data point possible, not all information is relevant—or helpful—to marketers. Here’s what brands need to know about data:

Not All Data Is Created Equal

Seeing the forest for the trees misses the big picture, and scrutinizing every single data point distracts from building true connections with customers.

If marketers try to manually comb through every single incoming data point, they’ll not only be stuck with an impossible task, they’ll be wasting data. Data ages fast, and taking too long to activate key data points wastes opportunities to connect with customers.

But it’s a double-edged sword. While not every data point is relevant, marketers still need a massive sample to find the data that does have the most potential.

Think of it this way. You’re sitting by the edge of the Atlantic with the aim to catch salmon. Do you stay in one spot because you only want one species of fish? Of course not—you’ll keep moving from bay to bay with the hopes of catching as much salmon as possible, despite sifting through other kinds of fish to get there.

The same goes for data; marketers need a big pool to home in on the best quality data.

"Third" Party Data

Marketers should look beyond CRMs and tracking pixels for their data. They need third party data.

Now, this isn’t the third-party data with atrophying use—cookies, data aggregates, and the like—this is looking for complimentary databases that can influence overall business strategies.

Take the current economic downturn that’s affecting every shopper’s buying habits, whether that’s seeking lower costs or prioritizing necessary items. Looking only at your brand’s personal data from previous customer behavior before the downturn won’t be as relevant. In this case, smart marketers would look at databases that are tracking consumer spending and habits at a global level to spot key patterns.

Examining customers’ current behavior on your online and offline touchpoints is helpful and necessary, but not sufficient. Get ahead of the curve and be proactive in your messaging. That means looking at contextual sources.

Personalization Requires Data

One of the best examples of data-driven marketing is the personalized campaign. Here, not only do marketers activate data to influence their marketing strategies, they do so at a 1:1 level, matching each customer’s unique data trail to a tailor-made campaign designed just for them.

Personalization is data-driven marketing in its most powerful form, and it’s a necessity in today’s market. Over 60% of customers want to purchase from personalized brand experiences, and nearly 80% feel frustration in its absence. What does that mean for marketers? Streamlining data activity—gathering the right data, translating it quickly, and generating engaging creatives unique to the customer—must be their number one priority.

Want to make your audience feel like your one and only?

Read the report on what customers truly want in their personalization.

The Benefits of Data-Driven Marketing

Now that the data landscape has been set, explore the benefits of data-driven marketing. From small changes to big initiatives, the payoff of creating a data-driven campaign is incomparable.

Relevant Research

While traditional marketing has its successes, it never has the same level of precision as data-driven marketing. Instead of purchasing quickly aging research about people like your customers, it's time to conduct your own research.

Gathering first-party data is a must. To do this, marketers need to note and track behavior each time there is a customer interaction. Brands can send engaging campaigns like gamified live polls to generate a response from their customers, exchanging a fun marketing experience for precious zero-party data.

Instead of getting data that is close to what you want and only similar to your target audience, data-driven marketing relies on brand-specific research. Using the most relevant information possible is what makes data-driven marketing so powerful.

Building Precise Campaigns

Once brands get data directly from their customers, they can then create the most dynamic campaigns possible. With this 1:1 research, marketers can safely know their brand communications will be a success before they’re even deployed.

No more guesswork and crossing fingers to hope for the best. With the power of relevant, accurate data, marketers have the information they need to create highly personalized campaigns that delight each individual customer.

To activate these precise campaigns, the next step is to turn this content generation into a set-it-and-forget-it approach. With automation, plug that fresh, brand-specific data into your tech stack and watch the personalization flow.

Meaningful Follow-Up

A staggering 83% of customers expect relevant information from brands throughout their purchasing journey. Customers want to know where their package is, when they can expect it, and want to be kept in the loop every step of the way.

Additionally, marketers must remember that the sales cycle doesn’t end with a conversion or a purchase. To foster customer-brand connections that lead to lifetime loyalty, marketers need to deploy relevant follow-up after each customer milestone—whether that be a comms sign-up, a purchase, or joining the loyalty program—to keep customers engaged. With 33% of customers claiming they won’t return to brands that don’t send relevant follow-up messaging, accurate follow-up is a must.

Strong follow-up demands accurate and timely data. The good news is, data-driven messages deliver just that.

Provable Measurement, Tracking, and Attribution

Brands must be quick to note and track what works and what doesn’t. If marketers are keeping up with the numbers and analyzing their results, they gain the knowledge they need to continually iterate their campaigns so they’ll never stop improving.

Tracking is a double-win. Not only do customers receive the messaging they need and want, marketers are able to prove their value when they can attribute company success to their efforts—and have the numbers to back it up. In the face of an economic downturn with layoffs and budget cuts, it’s more important than ever for marketers to show the value they bring to the table.

Attributing where growth is coming from is key for any marketer, and data is the proof of their success.

The Challenges of Data-Driven Marketing

Data-driven marketing is clearly the most powerful way for brands to create their messaging today. So why isn’t every brand implementing this method? It often comes down to these common challenges. But have no fear—with every challenge comes a new opportunity.

Data Cleanliness and Siloed Information

While most brands have mountains of data coming in every day, each database is siloed. Marketers get piecemeal information instead of one source of truth that gives a clear view on each campaign’s success. With multiple sources of data, it becomes difficult connecting them to the brand’s broader goals and KPIs.

Often, not only are data sources siloed—their guidelines for measurements also differ. Brands need standardized reporting, benchmarks, and designated employees with clear-cut roles to make data as hygienic as possible.

While it sounds like a tough task, the right tech stack that synchronizes all your sources of data is a first step that adds virtually no lift to your company, ultimately saving costs over the long haul. Add that to a standardized best-practice that fits your brand’s needs, and your data will be crystal-clear.

Facing Changing Customers and Contexts

Customers are evolving faster than ever, both in their preferences and contexts. That’s why 74% of customers want brands to keep “living profiles” on file—in short, they want brand messaging that changes and develops as quickly as they do. What customers prefer today they may find irrelevant tomorrow.

Preferences are often governed by global context, and a brand’s contextual approaches must change quickly with the times. Take gas prices. As gas prices shot up higher than ever earlier this summer, many drivers opted to walk and bicycle when they could instead. With perceived lower demand, the gas prices began to fall. The initial rise of gas prices changed consumer behavior, causing a ripple effect.

This is a key component to brand agility. Not only must marketers move quickly, they must keep in mind that every message has an effect on the customer that can affect their long-term habits.

How can brands anticipate how customers will respond to a marketing message? Not only must they keep track of previous activities and compare to current contexts, they can harness the power of AI to power their predictive analytics to create messaging that evolves with their customers.

Gathering Fresh Data

Gathering relevant data points is hard enough—it’s like finding a needle in a haystack. But when you add how fast data ages to the mix, you’ve got a group of overwhelmed marketers on your hands.

Even if marketers beat the odds and manage to gather the key pieces of data for one campaign, they’ll soon have to restart the entire process when customer preferences and needs inevitably change.

While these data challenges may seem insurmountable, the right tools will soon not only mitigate these problems, but turn them into opportunities.

An overwhelming amount of data to comb through? Use an automation tool to sort data for you and funnel the right data-driven campaigns to each customer. Customers changing at lightning speed? Ensure your tech stack can translate relevant information into engaging creative that delights them. Intimidated by the fact that 92% of customers expect highly personalized experiences? Exceed their expectations and delight more than that 92% when personalized content can be generated as quickly as a batch-send.

When your brand takes these challenges and turns them into powerful opportunities, the payoff of data-driven marketing is well worth it.

The Data Tools You Need

To turn challenges into opportunities, you need the right tools. Here are a few to get you started:

Automation

When it comes to data, automation is your best friend. It’s virtually impossible for a brand to track, organize, segment, and activate data at scale without it. Automation allows any brand of every shape and size to operate like they only have a single customer, and empowers them to build those 1:1 connections customers crave.

Behavioral Tracking

No marketer can have their eyes everywhere all the time. Whether it’s tracking pixels, APIs, or a process to simply make sense of the customer behavior you’re seeing, every brand can benefit from a helping hand to keep tabs on every customer’s unique data trail.

Creative Generation

Data doesn’t resonate with customers, visual experiences do. To sustainably deliver an engaging marketing experience that’s unique to each customer, brands need a tool to transform all of their incoming data into unforgettable creatives.

With the right tools, data-driven marketing is within every marketer’s grasp. Give customers the messaging you know they’ll delight in and power every marketing campaign with rock-solid data.

Data-Transformed Campaigns

Catch a glimpse at what powerful data-driven campaigns can look like, and get inspiration for what your brand can do.

One of the best examples of a data-driven campaign is the loyalty message; these are the customers that you have the most data on, and in turn drive the most sophisticated campaigns yet.

Here, John receives a personalized bar graph that shows how many more loyalty points he needs for his next reward. As a next step, ways to earn–such as purchasing new arrivals or participating in bonus activities—are given as a clear CTA. From the products, to the activities, to the points status, every inch of this email is personalized with John’s freshest data.

Customers don’t need to be loyalty members to receive nuanced data-driven campaigns. Here, William gets an email from Inkredible Retail that suggests products based on his recent activity on their site. As a new customer, these recommended products are paired perfectly with his welcome discount.

To bookend the email, a CTA to join the loyalty program lines the top of the message, and a map showing what stores have these key items is included.

Where Data-Driven Campaigns Are Headed

The need for data-driven marketing will only grow stronger over time. But what will it look like and how can brands get ahead of the curve?

Broader Sources With a Narrower Output

As more brands adopt data-driven marketing, agile companies will look to other sources beyond marketing and business outlets for the contextual information they need to influence their campaigns.

The recent COVID-19 pandemic is an excellent example of this. Amidst the lockdowns, the brands that not only survived but thrived, did so by tracking epidemiological sources, keeping tabs on reopening schedules, and monitoring the different national responses and behaviors before they deployed their campaigns.

In the same way, brands must continually look to outside sources in order to generate content more helpful, nuanced, and personalized than ever.

Data Engines: AI

As AI grows in sophistication and adoption, data-driven campaigns will move away from solely gathering data to generating data. Taking proactivity to the next level, AI will be able to extrapolate existing data points to predict what will resonate with customers with far more accuracy than traditional marketing’s guessing game.

AI is still in the works, but it’s never too early for brands to get in on the ground floor. Keep your finger on the pulse of AI and be ready to invest in tech that adapts with customers at scale.

Data-driven marketing can seem like a complete overhaul of existing strategies that feels unattainable, but with the right methods, tools, and strategies, any brand can implement campaigns that are slated to win by the numbers.