How Startups Can Use Data-Driven Marketing Strategy
The role of data-driven marketing to drive business growth is flourishing more and more as time goes on. It’s undoubtedly one of the best strategies for startups to adopt.
Data-driven marketing has been proved to be one of the most effective marketing strategies of the recent digital era. The prospects and benefits a startup gains through adopting a data-driven marketing strategy are immense in achieving business growth.
In this article, we’ll explain the concept of data-driven marketing strategy along with the steps to create it.
- What Is a Data-Driven Marketing Strategy?
- Differences Between Traditional and Data-driven Marketing Approaches
- Traditional Marketing
- Data-Driven Marketing
- Preparation Required for Creating a Data-Driven Marketing Strategy
- Role of Artificial Intelligence in Data-Driven Digital Marketing
- Steps to Create a Data-Driven Marketing Strategy for Your Startup
- Examples of How Data-Driven Marketing Works
What Is a Data-Driven Marketing Strategy?
A data-driven marketing strategy refers to the mass application of the customers’ personal and behavioral information for optimal and targeted product buying and personalized messaging.
It works just the way we deal with our family. Because as we know our family well, we know all their likes, dislikes, and preferences. And so it’s easier for us to decide what they would want while choosing something for them.
Similarly, in data-driven marketing, the marketers acquire data about their customers’ insights via their regular interactions and third parties. This data is further utilized to prepare targeted products and advertising.
And thus, data-driven marketing is more fruitful in terms of return of investment (ROI) as it enhances the customer experience by predicting their personality and preferences.
Differences Between Traditional and Data-driven Marketing Approaches
To highlight the benefits of data-driven marketing strategy more, we’re showing the major differences between traditional and data-driven marketing approaches to showcase the profitability of data-driven marketing.
For efficient marketing, it’s important to comprehend the audience and consumers with market research, identify consumer needs and preferences, and create and deliver targeted messages to the audience in the most preferred medium to convince them it’s their solution.
In traditional marketing, marketing strategists study the resources that already exist on the internet to identify the audience, which is a very time-consuming as well as a costly process.
Moreover, if they get enough resources, then focus groups are created to target potential customers and research their habits, problems, needs, preferences, and behavior.
After that, based on their research, a guess-driven strategy would be formed to attract the target audience to buy the product. However, there’s a good chance of the results and the guesses being wrong, causing a loss of ROI.
Also, since the campaigns take a long time to yield results, the marketers lose the tools to measure the effectiveness and result of the campaign. They don’t get the opportunity to judge whether the campaign was a success or a failure and what are the particular points that need to be improved or changed to create a better approach in the future.
Contrary to the traditional marketing approach, data-driven marketing approaches are faster, accurate, and specific due to the data collected from several marketing tools that include Google Analytics, Facebook Ads, Adobe Analytics, and Salesforce.
There’s no guesswork in data-driven marketing strategy and therefore no risk. And you’ll be able to easily measure the success or failure of your campaign in real-time. Along with this, you’ll also be able to determine the places that need to be improved for the success of future campaigns.
Preparation Required for Creating a Data-Driven Marketing Strategy
Before starting with the steps to initiate a data-driven marketing strategy, a few aspects need to be noted and arranged for a smooth start of the strategy.
Having a Definite Aim and Objective
Generally, every organization collects, stores, and analyzes data using the same set of strategies and tools. The factor that creates the difference between the data-driven strategy of one organization from another is the aim and purpose they’re adopting it for.
For example, many organizations initiate a data-driven strategy to launch a new brand, while others seek to drive more sales and branding or double subscriptions for the service.
Making a Plan and Committing to It
Once the marketing strategists are done conducting multiple rounds of data analysis after collecting all customer data, they opt for planning strategies that will be the most profitable to the organization.
It’s very important to plan these strategies properly and smartly or the rate of successfully implementing the strategies lessens. For this purpose, creative digital marketing agencies like lineout.com can be very helpful to design the best plan for achieving the organization’s goals.
Having a Strong Automation Platform
Over time, business operations are becoming more complex. These processes include handling taxation, inventory, sales, multi-locational movement of products, and keeping records.
That’s why it has become more important to invest in a good ERP or CRM platform to help track these processes automatically.
While CRP helps an organization track consumer movements including their behavior, lifestyle, and buying pattern, ERP helps to integrate functions like production, sales, inventory control, and so on.
Keeping a Data Management Platform Organized
Collecting relevant data for marketing requires a data management platform (DMP). The DMP will collect relevant data by recognizing the sections that can be used for creating targeted messages.
Moreover, they also provide instructions to the media associates so that the advertising of the product and the company are positioned accurately on different platforms.
Investing in a Capable Team
The initial step that’s required before you start with the process of creating a data-driven marketing strategy is forming a strong and capable team of marketing strategists who’ll brainstorm the process to create the best strategy.
The team must contain competent individuals from all departments of the organization. An ideal data-driven marketing strategy team would have people who are creative, collaborative, and diligent to achieve the goals of the organization.
Prioritizing the Consumer Experience
One of the major objectives of a data-driven marketing strategy is to provide existing customers with an exemplary experience.
This might include loyalty programs for regular customers or customers receiving value for their past purchases. Besides utilizing the data, the customer should be given better and exciting offers that they’ll be interested in.
It’s essential to continuously manipulate and test the collected data and to focus on collecting more valuable data as efficiently as possible for conducting new business experiments. The more data, the better the strategy.
Role of Artificial Intelligence in Data-Driven Digital Marketing
One of the latest digital marketing trends includes the mass use of artificial intelligence. AI has taken digital marketing to a whole new level. AI can make a huge contribution to a successful data-driven strategy by automating the processes.
With the help of AI, it’s possible to collect and process a huge amount of data at a time.
AI even helps to derive deep and appropriate insights into complex data. It’s basically the backbone of data-driven digital marketing.
Steps to Create a Data-Driven Marketing Strategy for Your Startup
Now let’s come to the steps you need to follow to create a data-driven marketing strategy for your startup. The goal of data-driven marketing is to reach out to people along with improving the online presence of your new small business.
Here’s what you need to do:
Identifying the Data Required for Measuring the KPIs
KPI stands for key performance indicators. Usually, the aim or objective of the project is set by identifying the KPIs. After measuring the KPIs, it’s possible to determine which sector of the organization requires more attention and improvement.
It’s essential to collect the right type of data for measuring the KPIs. If you collect the wrong data, it’ll just be a waste of time, causing the whole initiative to be a failure.
Collecting the Data
It’s very important to recognize what type of data can be collected from the third party without crossing the line. If you invade the privacy of the consumer too much, they might become alarmed and stop using the service.
Data can be collected with information forms on the organization’s websites, consumer surveys, geographical location, analyzing user actions such as search, payment, scroll, and clicks on acceptable pages.
Moreover, this process should be continuous as the behavior, needs, and preferences of the consumer change.
Analyzing the Data and Making Buyer Personas
The next important step after collecting data is analyzing it; after all, that is the reason why the data was collected. It’s important to note ideas and insights of how to use the data and where to use which data.
By analyzing data, you’re able to identify the personality, preferences, and interests of each customer along with factors that influence their choices and decisions. This will help you to prepare the strategy more efficiently.
Customer segmentation helps marketers to divide their customers into segments for the convenience of marketing and targeting.
When the customers are segmented, it’s easier to reach a huge number of consumers with similar characteristics, requirements, and perspectives.
Marketers can create demographic segmentation, psychographic segmentation, behavioral segmentation, and geographic segmentation of the customers for a better and easier approach.
Creating Customer-focused Content
Now that you know the demands of each of your targeted customers, it’s time to create content and products that are focused on their preferences and requirements.
Along with creating the products, you should also plan and prepare offers and deals that the customer will appreciate. Make sure you don’t miss any opportunity to present the product as well as the deals that will appeal to the targeted customers.
Placing Products as Per Customer Behavior
This step is like the climax of the process. You have to be strategic while presenting the product advertisement to the customer by monitoring their behavior.
You need to make sure that you’re placing the right product on the right platform at the right time for the customer to be interested in it.
For that, you need to analyze the online platforms most used by the customer along with the time frame the customer is more active in it.
Now, it’s time for the evaluation of the results. This stage is important to figure out which channels of the project are generating the most returns and which are generating the least.
You’ll be able to understand which offers or deals are preferred by the consumers and which are not. In this way, you’ll be able to improve future campaigns as per the outcomes.
Examples of How Data-Driven Marketing Works
Let’s take a quick look at some examples of how data-driven marketing works:
Using Dynamic Retargeting for Customized Offers
Dynamic retargeting retargets customers by creating ads based on their search history with irresistible offers.
Using Weather Data to Prepare Attractive Text Messages
Preparing messages that the customers can relate to by matching with the environment of the area is very effective at attracting customers.
A Small Detail that Made More Conversions
In this example, after a data-driven inquiry, it was found that a particular page had the least conversions due to the size chart only showing the US. When they added EU later, it increased their conversions.
Data-Driven Marketing Cycle
Finding ideas → Prioritizing actionable ones → Testing → Implementing → Evaluating the result.
These are the important steps and factors to implement data-driven marketing for your start-up. All the best for your new venture!