Data-driven marketing: learn how to work it with your customers

Data-driven marketing belongs to a new customer service approach that unleashes companies’ potential to make better, scalable marketing decisions and benefit from higher marketing ROI. It represents the future of customer experience and meaningful branding messages.

You already know what people say: Knowledge is power. Facts, information, and skills acquired through experiences are gold mines for every company that wishes to stand out and stay relevant in their customers’ minds.

Customer data platforms tells marketers everything they need to know about their target audiences. Through digitalization and its multi-channels, it became possible to trace people’s actions across the digital and physical worlds to optimize the process of offering customized products and services that match individual needs.

However, these days, data must be smooth to access and easy to visualize. This happens because customers want quick responses, which timing and effectiveness are highly affected by delays and assumptions.

In this unforgiving environment, are you confident that your marketing decisions are based on facts? When important events on your field take place, how quickly can you respond to them? How many customized experiences do you actually deliver to your customers?

If the answers to those questions concern you, you’re at the right place, at the right time. Get ready to know how data-driven marketing can take you closer to the answers you wish you could give.

In this article, you’ll find out:

  • What is data-driven marketing;
  • Data-driven marketing benefits;
  • Impacts on customer experience;
  • How to work data-driven in consumer segmentation;
  • And examples of data-driven culture.

With that in mind, let’s move forward.

What is data-driven marketing?

Data-driven marketing is a strategy that uses customers’ reliable information to personalize whole marketing communications and experiences. From buying journeys to targeted media and in-store service, data-driven marketing accesses massive information to leverage decisions and make the right judgment about what customers need. This helps marketers to refine strategies based on facts, not guesswork.

But where does data-driven marketing get all the information from?

When you use your phone’s mobile apps or desktop devices to web navigate, you’re leaving traces all around the internet. The applications you use are designed to send data to companies so they know what websites you access, with who you’re interacting with, the locations you have been to, and more relevant information that clarifies your individual preferences and lifestyle.

Many organizations are already worried about data, but we must call attention to the fact that data-driven marketing goes beyond data itself.

The many devices, platforms, and other types of media you use are surely whispering into marketers’ ears over and over to help them build fact-based decisions that match your expectations. Even so, data-driven strategies merge a high-powered amount of digital and offline channels to give context, collect information, and arrange it in ways that are easy to visualize. Data-driven marketing aims at amazingly-designed customer experiences, but influences internal operations in ways companies have never seen before.

With so much information being generated at all times, data-driven marketing unites the right tools to track, segment, and optimize strategies. When used right, this groundbreaking approach will help you to invest in the right interactions to increase customer retention and bring you more marketing ROI.

Data-driven marketing benefits 

Now that you know the importance of data-driven and how it is revolutionizing marketing strategies, it is time to highlight some of its many benefits.

Segmentation

Data-driven marketing is the key to build marvelous customer experiences based on well-designed segmentation. The first step is to select the right customer segment to drive marketing efforts into. After that, you will be prepared to work on specific, tailored tactics to sharpen your customer touchpoints, whether they’re potential or not.

By segmenting a target market, it gets easier to develop products, solutions, and approaches that will attract the right people to your brand. Segmentation also provides transparency when you wish to know how your campaigns are resonating with the public and gives you a better understanding of particular users’ behavior.

Customer acquisition

Four essential questions must be answered very carefully when you decide to attract target audiences and contact potential customers:

  1. What message will you tell them?
  2. How will you communicate with them?
  3. When will you reach out to them?
  4. Where will you find them?

In a data-driven approach, all of these questions will be respectively answered based on:

  1. Goals and pain points;
  2. How they behave;
  3. The best timing according to their routine;
  4. And the digital and physical places you’re more likely to meet them.

Even if you have a large number of customers, it is possible to combine data to deliver special, tailored touchpoints that match their behavior and preference. It could be an e-mail, or an SMS, or a live event. Possibilities are countless, but you will surely pick the best ones once you know what customers expect from you and how to engage them.

Data-driven marketing works efficiently when it comes to continuously deliver interactions to match customers’ expectations throughout their journey. With so much information at the palm of your hand, you will be ready to transmit the right message (what) at the right time (when) and place (where).

Revenue

Every company director loves it when technology saves the day by cutting costs and returning investment. Gladly, this is pretty much the case with data-driven marketing.

According to the Forrester report “Insights-Driven Businesses Set the Pace for Global Growth“, data-driven organizations grow 30% per year more than companies that don’t base their strategies on data.

When we take a good look at different markets, it gets even clearer that data-driven strategies embody assertive communication that makes ROI possible.

Custom-made marketing campaigns reach proper audiences, which leads to customer acquisition, which leads to customer engagement – and ROI is coming back to you in each one of these stages. Not to mention the revenue currency that comes from these approaches.

Revenue is also possible by cutting costs, reducing churn, and democratizing information through different companies’ sectors.

Upgrade your marketing strategy

Automation was already a buzz when CRMs arrived to transform the way marketers dealt with customer data. From purchase details to personal information and preferences, CRM was and still is prepared to collect digital data at higher levels. This allows big data to play a more predominant role in marketing: Data is now at its core, deciding the directions companies should take to reach their goals.

It must be said that collecting data became a more complex task, especially when you take the number of multi-channels available these days. Still, this complexity isn’t an excuse: If brands don’t automate operations related to those channels, they will lose way too much time putting effort into what can be automatic, and marketers won’t be able to strengthen their creative side and propose remarkable tactics.

Fortunately, there is a considerable amount of data-driven tools that optimize, clean, and filter important data from multiple sources, whether they’re 1st (directly extracted from customers) or 3rd party (found in the market).

Data-driven marketing automation saves you time, money, and free your team to focus on more important tasks that require human abilities, such as creativity. That is how you truly upgrade your marketing strategy: By quickly analyzing qualitative data and returning a creative response to customers’ issues.

This means a wider customer reach, more relatable content, targeted ads, and personalized customer journeys – to only quote a few.

Don’t forget that numbers and reports play a crucial role in data, but the outcome will only be useful if the human eye analyzing them gets the right insights and develops accurate replies to get closer to customers.

Impacts on customer experience

Lincoln Murphy, known as the Customer Success guru, says that Customer Success is only achieved by combining what customers need to an appropriate experience while delivering the right interactions. As you know now, this has everything to do with data-driven.

Data-driven marketing is a new shift in customer care. It prioritizes customer experience in smart and strategic ways, such as we have never seen before.

Many marketers around the world have embedded data-driven strategies into their routines, taking their time to analyze information that will drive to ideal customer experience. With so many benefits, data-based decisions impact consumers on profuse levels. Take a look at some of the impacts:

Personalize customer interactions 

Needless to say, real engagement is closely related to giving customers a personal touch in everything you do.

Irrelevant content, general messages, and ordinary offers will only frustrate the current consumer. People expect brands to customize every touchpoint and suit them to previous steps of their consumer journey. This means companies need to enrich and individualize communications that work in a one-to-one approach to get in touch with customers and prospects.

While 74% of consumers feel frustrated by irrelevant content, 56% of them would reward personalization with a purchase.

Data-driven tactics are the perfect response to this personalization requirement. It allows you to incorporate consumers’ inclinations, pain points, and attitudes to deliver personalized experiences both in digital and physical fields.

Content personalization also turns your communication more persuasive, improves customer conversions, and boosts engagement.

Improve products and services

Products and services can also be personalized and better designed to respond to buyers’ expectations. Analyzing clear data will help you understand whether you need to develop a new product or give an existing one new functionalities to match your customers’ needs. This kind of information also guides you to make the right decisions on when to invest in innovation and when to change small details that make a difference.

Besides, data-driven marketing ensures companies always keep an eye on the market to launch tailored, untried products. Data will assist you in when to launch something new, to know how much people are willing to pay for your products and services, and what can be enhanced to increase customer satisfaction.

Ask for feedback 

Another way data-driven marketing impacts customer experience is via feedback. Remember that people use social media to discuss brands and experiences, and when they talk about your company, you should be the first to know. Practices like social listening will help you monitor what people say on social media networks and collect precise data to gather feedback and insights into what’s working and what needs refinement.

Predict customer trends and market changes

Customers are avid for brands that can communicate and act based both on their individual preferences and what’s going on around the globe. Sustainability, social responsibility, storytelling… These are all actual trends that brands should pay attention to while planning their year. Closing your eyes to the market and only focusing on customer behavior is dangerous, as the external environment can dictate what trends will create buzz and what you can do to make people more interested in your brand.

Data-based predictions are important to keep you one step ahead of your competition, especially in times of change. Timing is crucial: Losing the chance to reply quickly to changes and real-time events might harm your brand in ways you never thought possible. With that in mind, make sure you use data to be prepared for change.

Reach customers where they are

Uncovering the best channels for promoting your brand can be a challenge, but data-driven marketing clarifies what those channels are and how your customers use them. This will prevent you from investing unnecessarily in channels that have bad ROI and planning media usage poorly.

With a more concise understanding of trends, you may get a broader view of channels’ tendencies to use them correctly, building more responsive communications. Batches of customers will also benefit from an enhanced content distribution from your part.

Make customers more engaged

Data automation is the ultimate principle to direct creativity into engaging strategies. In the past, marketers could only deliver a few types of customer service — versions back then didn’t vary, and general communication was even acceptable. Nowadays, though, our hectic and ever-changing routine requires more from brands. If you want to truly engage customers and make them loyal to your brand, you better start seeing data as the main resource to achieve better engagement rates.

More interested in experiences than in products, customers these days expect to be listened to and empowered by appropriate brand responses. Not only people are willing to pay more for better experiences — engaged customers are ready to invest emotionally in brands, and this is vital to any long term customer relationship.

Besides making you relevant in consumers’ minds, engagement pays your bills. Companies that have improved engagement increase purchase frequency and order sizes. This keeps revenue coming in and customers satisfied with relevant buying and connection experiences.

How to work data-driven in consumer segmentation

To apply data-driven marketing in your company, you need to be ready to extract, treat, compare, and analyze digital information from multi-channels, transforming it into knowledge.

We know this multi-channel information means millions and millions of data coming from social media, website analytics, cookies, CRMs, consultancies, market data, competitors, and more. But, thanks to technology and digital transformation, data-driven companies use analytics and algorithms to filter and select types of data that matter the most to them.

There are data-driven solutions — software and methods — that will help you segment your customers and visualize information in intuitive reports. With the advances of machine learning and artificial intelligence, machines gather data around and bring it to you whenever you need it.

One of these tools is the Customer Data Platform, also known as CDP. A CDP should provide you with the right insights to create personas, attract and qualify leads, create new content strategies, and develop customer relationships.

Be aware that marketing segmentation is a key-strategy when it comes to the data-driven mindset. Separating customers by interests, job titles, age, location, gender, and more is an amazing strategy for companies that wish to come up with outstanding marketing strategies instead of sending mass emails and trying to acquire leads through general advertising. Segmentation will pull you closer to generate real-time audience engagement.

For example, in 2015 Very.co.uk combined customer preferences with data about the weather to create personalized homepages to attract consumers to their e-commerce. In the process, 1.2 million versions of the website could be displayed, matching customers’ interest. For example, if you were looking for homeware, your homepage would bring special promotional messages that had everything to do with the products you were looking for. It is completely personalized — and that was only possible because Very.co.uk data scientists created complex algorithms to predict customer behavior.

Nubank, the largest Fintech in Latin American, is another company that embraces data-driven marketing to customize the customer experience. Nubank created ‘wows’, the name given to specific gifts customers receive when assistants feel a special type of connection while serving them.

Every gift is designed especially to the customer, considering their preferences and context. Nubank recently gave a consumer that owns 85 dogs a box full of dog toys, bone-shaped letters (written to the customer herself), and a device that throws dog treats in the air.

Examples of data-driven culture

Data-driven marketing has been so relevant it is leading a policy of its own, known as data-driven culture.

Data-driven culture allows organizations to replace opinions and guesswork with data-derived facts. Here, data is the main resource for collecting and leveraging insights in every company’s department. For this reason, all operations and routines will revolve around it, creating a new decision framework that relies on collaboration to move, integrate, and combine data more efficiently.

This means information must flow effortlessly through people, processes, and solutions so decisions can be made in a matter of seconds. There is no time for waiting: Business intelligence, technology, sales, product, marketing, and many other teams must have quick access to data to enhance customer interactions as swiftly as possible.

To give you a real case example, The Coca-Cola Company in Brazil assembles a data-driven culture to machine learning and AI to analyze its market and consumers. From three to three months, Coca-Cola employees set goals based on data and measure their progress through indicators and continuous information exchange.

It is also interesting to mention that Coca-Cola uses digital as a leading measurement tool and values people diversity to boost collective learning.

Worldwide, Coca-Cola is also known for its successful data-driven campaigns and agile mindset. In practice, data helped Coca-Cola deliver the Cherry Sprite flavor, which was inspired by the fact many customers mixed their drinks in self-service drink fountains. It also drove the company to create personalized AI assistants for vending machines that can behave differently and allow consumers to personalize drinks.

To mention one more example, Coca-Cola has been using data-driven marketing to track photographs of its drinks on social media, using image-recognition technology — this allows the company to target customers and deliver more efficient adverts, considering their consumption behavior.

At the end of the day, it’s clear to see that companies that have absorbed data-driven culture are completely different from companies that haven’t. Data-driven companies achieve tremendous results by dealing with complex multimedia channels — like videos, social media, ads, email, and liveblogs; — to reach customers with the right message at the right time. This ability is closely tied to automation and analytical approaches, which permits operations to be optimized, and audiences to be attracted more effortlessly.

Data-driven marketing is the future 

We know making the best marketing decisions is a challenge as much as it is a basic requirement. Moreover, facts tell us the future of organizations will be decided by the ability to use data wisely — and we know you don’t want to be left behind.

Arena helps media companies all around the world to encourage engagement and streamline customer data to smart marketing campaigns.

If you’re willing to be assisted by a Customer Data Platform to boost your audience and work data-driven marketing with your customers, get to know more about how we can create powerful experiences for your users.

The Difference Between Data Management Platform (DMP) and a Customer Management Platform (CDP)

A data management platform works as a warehouse, collecting, organizing and activating third-party data in a single place. Keep up and find out how to benefit from it!

Data is a crucial resource in this business era. However, it can be useless if the company doesn’t know how to professionally manage all that amount of information, wasting thousands of dollars advertising to an incomplete or insufficient database usage.

In a digital world of first, second and third-party information, a Data Management Platform, also known as DMP, can transform piles of databases into profitable resources. Take a look!

What is a Data Management Platform (DMP)

Customer experience is not a linear walk. They will leave crumbs of information all the way along their relationship journey with a company. That process results in the accumulation millions of data throughout the years from multiple sources.

Most times, those data can seem random, incoherent or fragmented. That may happen when there is no right management of it.

Then, some questions become trivial:

  1. Who are the visitors on my website?
  2. What are they looking for?
  3. How can you have direct contact with them?
  4. Why they are not making deals with me?

A data management platform (DMP) is a tool to filter all those pieces of information into organized profiles for audience segmentation or insights for decision-making.

After that, your company will know exactly who they supposed to talk to; how these audiences behave; what is the best approach along the sales funnel to them; if the investment made in advertisement campaigns has the appropriate segment and more.

You can even create cross-media analysis, which is when multiple platforms, on and offline, can support the same campaign.

How Does a DMP Work?

Operating as a central intelligence system for digital marketing, a DMP creates a perfect definition of your ideal customer by organizing millions of information into demographic, consuming habits, interests and so on.

You can obtain new forms of segmentation through DMP, such as a non-dependent on the context or content one. This new segment is now based on the profile of the audience, regardless of the advertisement subject or the platform displayed.

To function, a data management platform operates in four steps:

Collect

It all begins with data collection, third-party information acquired by relevant partners with similar or identical market spaces. These data can be provided from CRMs, customers’ registration, e-mails, website data, previous purchases and whatever more relevant material is available.

Even though DMP is made to operate third-party data, it also supports some first-party data to improve the information given.

Organize

In this step, the DMP classify the info into categories, grouping them as clusters. Clusters are a type of audience segmentation that combines customers with similar marketing sales behaviors in one file.

For example, it is possible to create a group of customers who has made most of their purchases by ad clicks, or those who spent a certain amount of money in a product or service related to yours, who has more visits in a specific category in a website that might fit your business, etc.

Activate

Now, it is crucial that the data management platform used is agnostic, which means it will be compatible with any digital platform. So, if the company wants to run a campaign for the brand in social media, websites, search engines, etc, it will be just fine. The activation itself happens when the campaign is on.

Learn

By analyzing the return over the investments made on the ads, it will be possible to understand the depth of cluster segmentation. The company will have more domain over the results acquired since the data is much more precise than any other type.

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What Can You Do With a Data Management Platform?

One of the main benefits a DMP provides is the cluster: high-detailed information about customers so you can create hyper-targeted ad campaigns, delivering more conversion rates and increasing the ROI of your company.

Using a DMP, you’ll be able to create accurate segmentation, making the proper usage of your third-party data by giving your audience the right message.

Practical Example

Imagine you run a dental clinic and want to expand your qualified leads base for a specific segment, let’s say dental implants. That is one of the most expensive procedures you have and it is not salable to any type of customer.

Typically, you would create a campaign based on people interested in dentistry or dental implants in a wide range, fitted in average age, near your clinic.

With a DMP, the depth of your segmentation reaches this: men and women, from 40 to 70 years old, who have downloaded some white papers about dental implants, researched a number of keywords that demonstrate the need for professional information and live within 5 km of the clinic.

Here are some possibilities your company can reach with this type of segmentation:

  • Retargeting: easily implement personalized retargeting campaigns based on specific activities and behaviors online.
  • Prospecting: integrate with third-party data sources for the acquisition of anonymous data, achieving greater precision and scale in online campaigns.
  • Website optimization: use your own or third-party data to provide customized content to different consumers when they come to your page.
  • Audience intelligence: cross your first-party data with other third-party to learn more about your audience and reach the people most likely to convert.
  • Better ROI: use an analytics tool that centralizes online campaign performance data to determine which audience segment performed best and where to focus your efforts in the future.
  • Productivity increase: eliminate the bottleneck of needing IT to reach out for your data and have all your teams able to take them out, ready to use.

DMP Benefits for Companies

So far, we have seen in order to escalate your business, having the right audience to talk to is fundamental. This is market intelligence. Your company can no longer have a vague idea of who their customer is. It is necessary to personalize and amplify to get the following benefits:

Cost-Effective Advertising Campaigns

When you have this level of audience segmentation, you can spend every dollar of your budget on better-targeted prospects. Get the return on the investment you need to.

Lower Technology Investments

To run a DMP, you won’t need an extra support. Your whole team, from customer success to follow-up sales, can easily operate the system. As we mentioned before, there is no need for IT.

First, Second, and Third-Party Data Combined

No data is left behind. Even a messy pile of customer information can turn into gold here. As this platform gathers and organizes party data, every piece of a database is important, nothing is wasted.

No Data, No Success

Regardless of the type of industry you are in, uncountable amounts of information are huddled and enter your company through different doors: billing spreadsheets, sales reports, feedback offered by different media, social networks, loss or conquest of new markets, CRM, etc.

Such a thing must be used to leverage business marketing strategies. That is the reason why it is so important to generate an efficient information collection, organization and analysis on a daily basis of a company, as DMP does.

From this, a strategy can be developed over decisions based on information, including those related to strategic and operational marketing. That is the Data-Driven Marketing.

Data-Driven Marketing

Data-Driven Marketing helps, for example, to create a guideline for campaigns using DMP clusters. Besides highlighting the features/benefits/quality/etc of a product or service, it enables a work of relevant engagement with your consumers, delivering exactly what they want.

As a result, communication is enhanced by user experience and becomes more aligned with the needs of its audience.

Strategies will be able to still cohesive and aligned even when using a larger number of channels. Marketing campaigns have been running more frequently in social networks, which is the place where interaction has a leading role.

It keeps getting more essential to own proper knowledge of the market slice you are in. Its audience and characteristics indicate the way your company should brand, advertise and sell their product.

Big Data

When we reach for the definition of Big Data, we find a true technological revolution, making more possible to qualify the results obtained. Big data is a master process of analyzing and interpreting a great volume of data stored somewhere remotely.

Information is available everywhere online in a non-confidential way. No matter how large the amount of information is, Big Data can reach and group them according to interests.

Big data can be used in several business routines. However, to use it properly, it is mandatory to have not only knowledge about the technology, but also to identify which are the touchpoints in your company that will be impacted by its implementation.

By that, it will be possible to make a more efficient allocation of resources and increase the return over the investment in those data analysis solutions. And that is how a Data Driven culture is established.

Thus, the company must act so all teams understand the importance of data integration in the definition of strategies and work based on that!

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How a DMP Can Boost Marketing and Sales Results

Marketing and sales work as the core of the data management platform. This is where it starts, through hyper-segmented audiences. One of the biggest mistakes –– and frequent too! –– of digital marketing campaigns is having an incorrect or too wide segmentation.

Besides impacting those who are not part of your true audience –– and might cause a bad reputation for you ––, there is going to be a significant waste of your marketing budget that may harm your ROI.

Every click or scroll on the screen can generate data. When your marketing strategy is aligned to DMP guidance, you hand over to sales team customers ready to spend their money.

DMP and Sales

At this stage, sales have a unified perspective over the data and better cards to play, such as real-time interactions.

This is a priority in marketing and sales now. A high-performance sales team, which are those with the upper sales amount, increase the chances of achieving their mark by real-time interactions with the customer.

But we are not talking about aggressive and unprepared approaches here. Sales’ strategy must contemplate the best ways to do it based on who is the audience. By that, the integration of the DMP with marketing and sales is crucial for higher performances.

The Main Differences Between DMP and CDP

There are a lot of similarities between Data Management Platform (DMP) and Customer Data Platform (CDP). But there are also some very specific characteristics we need to keep them well established. Here they are:

Data Collection

One of the main differences between CDP and DMP is that DMP uses cookies to track users’ movement and target marketing strategies more efficiently. DMP was developed to search for data on advertising networks.

On the other side, CDP is a technological advance that gathers customer data from different sources and use it to generate more appropriate content, email marketing or offers.

Objective

DMP was designed to create deeper segmentations for the marketing strategy. CDP focuses on improving conversion rates and customer engagement, creating a richer consumer profile with more information.

CDP is also able to capture information from different channels and devices, in an automated way.

Therefore, investing in a CDP or DMP allows you to transform your company, employing more resources and intelligence to the business, and promoting your brand to a great and higher level of reference and success in the market.

How about starting now? Arena has a Customer Data Platform solution for your company. Build your clusters, make better advertisements, and talk straight forward to the audience you need. Click here and visit Arena’s CDP page!