As companies have more and more customer information at their disposal, they can quite easily design and carry out their marketing activities in a data-driven manner. Advertisers no longer have to shoot at sparrows with cannons and spend a lot of money on large-scale campaigns, at the end of which only a fraction of the people reached become buyers. Instead, extensive amounts of data, in combination with modern technologies, enable targeted investments with high precision. Companies can replace gut feelings with well-founded information and not only use their budgets more efficiently, but also significantly increase the conversion rate.
However, shifting to a data-driven marketing approach is much more than buying the right piece of technology, according to Progress, a global software company that simplifies the development, deployment, and management of mission-critical applications.
Progress’s useful steps to data-driven marketing are in a nutshell:
- Create cross-channel data structures: This is a big infrastructure challenge because we need to combine data for each customer from each channel. It has both integration and data integrity implications because you must accommodate easy data source additions, large data storage and ways to anchor customer data from diverse channels to the same person.
- Understand the customer journey: While customer insight often starts with opinions and gut instincts, data injects objectivity. Simple questions about which course to take are settled by applying buyer journey behavior to similar customer prospects. Seek success by using what has already proven to be successful.
- Set long-term business goals: The journey toward true data-driven infrastructure starts with a mind shift away from superficial metrics toward long-term goals. The focus should be on identifying your long-term goals and leveraging whatever positively influences those goals. This enables marketing teams to define and diligently track KPIs and strategize to influence them. Further, it provides the tools needed to answer questions around true ROI, cost of acquisition, forecasting, optimized marketing planning and so on.
- Use predictive analytics: If the goals are defined and the necessary data sets are available, more precise predictions can be made using predictive analytics. At this point, a lead score becomes more meaningful, taking you from a relative number of points assigned to an actual conversion probability you can predict with great accuracy. Shifting from opinion-based heuristics to data-driven models is a key step toward automating the sales and marketing machine of a data-driven organization.
- Use prescriptive analytics – “best next action” for each customer: Accurate predictions on a macro level (forecasting), as well as micro level (customer conversion) are stepping stones to another level: prescriptions. Once you can predict behavior, you can prescribe next steps. This is similar to how Google can predict your likelihood to click on a certain ad with great accuracy. It uses data to present ads proven to be successful with people like you. By having the previously mentioned protocols in place, technology can now be effectively leveraged to help improve and prioritize the marketing process and increase customer conversion rates organically.
- Build customer intelligence through record and scoring systems: Based on these structures, customer data can be recorded and comprehensively analyzed. With the help of scoring systems, companies can build up “customer intelligence” so that they can learn to understand their customers and recognize behavioral patterns. Systems need to accommodate both.
“Data-driven marketing presents a number of challenges that are both technological and behavioral in equal measure, each requiring a mindset change. Pursuing the perfect data-driven result will yield continuous predictability, prioritization, attribution and automation. This can be integrated with the creative process to provide maximum impact and fast growth. With a mind shift into data-driven marketing, marketers can move away from deprecated notions like the marketing funnel, counting clicks, opinion-driven decisions and one-way communications. Instead, they can turn infrastructure into a smart, self-improving intelligent system to guide them to real customer conversations. Until recently, this seemed like science fiction, as opposed to marketing practice. But now, the road ahead is taking shape. It consists of understanding components of the customer journey and how it can be changed and expanded: ultimately providing more and more value,” Progress Software states in its whitepaper.
The fact is, if you want to be successful in the increasingly tough and competitive world, you can no longer avoid data-driven marketing. The challenges you must overcome are not only of a technical nature but require a rethink. Marketing can no longer be understood as a communication-like discipline, but a more scientific and strategic task.
By Daniela La Marca