An Overview of Data-Driven Marketing
Almost two-thirds of senior marketers strongly agree that data-driven marketing is crucial to success within a hyper-competitive global economy, according to a study released by Forbes Insights in association with Turn. The right data forms the foundation for strategies such as lead generation, customer acquisition and retention, up-sell and cross-sell, customer experiences, and more. However, while many marketers are still trying to grapple with the marketing data they already have, along comes bigger and faster and real-time data and new obstacles to overcome.
According to the “Data-Driven Marketing Benchmarks for Success” report by Ascend2 and ZoomInfo, only a minority of professionals have been able to achieve a “very successful” level of success with data-driven marketing.
According to the study, the most important objectives when it comes to data-driven marketing is to be able to personalize the customer experience. Survey respondents also stated the importance of being able to measure data-driven marketing ROI and target individual marketing segments as high priorities.
However, data-driven success is dependent on having high quality, integrated data. Sixty-four percent of the “very successful” say that improving data quality is the most challenging obstacle, and integrating data is the second biggest challenge for 49% of respondents.
When it comes to the data being used for marketing purposes, a company’s own 1st party data is used by 86% of data-driven marketers. However, the amount of data being used from other sources dips drastically, with only 49% using data from marketing partners, 32% using data from channel partners, and 27% from third-party vendors. This signifies a huge opportunity for marketers to use outside sources to supplement their internal data in order to obtain deeper, data-driven insights.
What Does it Mean to be “Data-Driven” ?
Data has long played a role in marketing. Marketers discover customer insights by asking questions such as: “Who is buying the product?”, “When did they buy it?”, “Where did they buy it”, and “What did they buy?” Today however there is greater urgency to use more data faster and in more complex ways in order to predict outcomes. The questions for today’s marketers become, “Who is about to buy the product?” compared to who already bought it. Or “When will they buy the product and through which channels?” compared to simply examining when they bought it. This is not to say that transactional history isn’t important – marketers need to consider past behaviors, but they also need to gather more data in order to predict future behaviors.
Get Your Data in Order
According to the research by Ascend2 and ZoomInfo, the biggest challenge to data-driven success is achieving high quality, integrated data insights. While managing data has traditionally fallen on IT’s shoulders, organizations across the enterprise rely on data for daily decisions and operational efficiency. With so many departments using different data sets, this inevitably leads to data siloes in which there is no interaction between each set of data.
For marketing purposes, a billing system for example may have certain customer details such as name, phone number, and billing address. Another system may house details on purchase history, and yet another database may contain customer service calls and requests. The goal should be to tear down the data silos and so that each of these individual pieces of data can be integrated and cleaned to create one holistic view of the customer. Eighty-one percent of “very successful” data-driven marketers outsource all or part of their data quality improvement initiatives to improve data-driven marketing performance.
Achieving high quality and integrated database does not happen overnight, but it’s worth the effort. In a study by Blazent, 94% of respondents believe that business value is lost as a result of poor data quality – 65% of respondents believe that 10-49% of business value can be lost due to poor data quality, while 29% of respondents said 50% or more of business value can be lost. On the flip side, 51% of respondents reported increased revenues as the biggest business value of having quality data.
Go Beyond Your 1st Party Data
Most marketers (86%) use their internal data sources for marketing purposes, but only 27% use data from a third-party. However, third-party data sources are much more robust and of a higher caliber than data available in the past. No longer is data simply a stagnant list, but with the fluidity and fast-moving pace of data moving in and out of systems, data can be sourced, cleaned and integrated just as quickly.
Third-party data providers source and aggregate the data into applicable sets that can be applied to your first party data bases. With only a few first-party data elements, third-party data sets can be appended to correct and fill in missing elements such as email addresses, phone numbers, lifestyles, demographics, purchase indicators and more to strengthen your customer insights.
Marketers can also purchase third-party data when there is no first-party data available. These highly specialized data sets are generally segmented by a defining factor such as lifestyle, life change events, location, and more. For instance an auto repair company could purchase a third-party data list of consumers who recently moved into their area. This mover list would include contact information, behavioral and lifestyle data, and more so that the repair shop could form a targeted marketing message for these recipients. Similarly, a company specializing in baby proofing homes could reach out to a data set of new parents whose children are nearing toddler age.
When sourcing third-party data sets, look for a provider who is data independent and who uses data from numerous data sources and files to aggregate the highest quality blend of data available. Adding old or dirty data to your database will do more harm than good so be sure to do your due diligence and ask questions about the data you are receiving.
Real Time Becomes RIGHT Time Marketing
Today’s consumers move quickly and marketers are continually striving to make contact in real-time. Data-driven marketing strategies are evolving, moving beyond simply marketing in real time to marketing at the RIGHT time. This shift is a strategy aptly named Right Time Marketing.
Right Time Marketing is a sophisticated way to boost customer acquisition and retention, provide seamless customer experiences, and create revenue lift by understanding a customer’s characteristics, channel preferences and in-market purchase signals. Right Time Marketing is built on a foundation of rich customer data and taking the massive opportunity that marketing data presents and getting it right.
Right Time Marketing matches offline and online data sets to drive right real-time connections with today’s consumers. Traditional marketing discusses the 4 P’s – Product, Price, Place and Promotion. Big Data is based on the 4 V’s – Volume, Variety, Velocity, and Veracity. And Right Time Marketing has evolved to embrace the 4 R’s –Right Person, Right Channel, Right Moment and Right Answer.
- The Right Person: Identifying the right person through a combination of internal customer and prospect data, as well as third-party demographic and firmographic enhancement, digital data, and in-market purchase signals.
- The Right Channel: Once the right person or audience has been identified, marketers must use a multi-channel approach to target today’s consumers. As consumers go from device to device and use as many as 8 channels or more for research and purchases, marketers must continually strive to provide a seamless experience for the customer, however or whenever they decide to interact with your brand.
- The Right Moment: Consumers today are constantly bombarded with marketing messages and advertisements. Cutting through the clutter requires that you serve up the most relevant messages at the right time.
- The Right Answer: By integrating the right data across multiple channels to understand a consumer’s behaviors in the moment, companies can find the Right Answer to meet increasing customer expectations. When targeted to the right person, through the right channel, and at the right moment, every customer interaction is an opportunity to strengthen customer loyalty, reduce churn, and boost revenues.
Marketing is continually evolving. One day “content is king,” “email marketing is dead,” “you need Big Data,” and “all your consumers are on Facebook so you better be too.” Whatever the hot new marketing focus of the year is, once thing that is constant is that data is the foundation of marketing –you need data in order gain new insights about your customers and prospects. Of course the data will need some cleaning, you may need to add more data from other sources, and you have to use the RIGHT data to get results.
To learn how to create a powerful business and consumer database that will lay the foundation for right time marketing, download this free “Real Time at the Right Time” marketing guide.