A data-driven business is one that requires the use of data to inform all business decisions. A data-driven marketing strategy is very much the same – a marketing strategy that requires the use of data to inform marketing decisions. The key differentiator between a data-driven business strategy and a data-driven marketing strategy is this: A data-driven business strategy depends on many different types of data. However, a data-driven marketing strategy revolves solely around customer data.
As such, data-driven marketing facilitates a customer-centric mindset without shifting the focus away from revenue. This alone makes data-driven marketing an ideal approach for the modern e-commerce business.
Today’s blog post is a primer on data-driven marketing. We’ll explain how to kick-start your own data-driven marketing strategy, and why data-driven marketing is so effective. Then we’ll provide you with some real-world examples of successful data-driven marketing.
Let’s get started.
Kick-start your data-driven marketing strategy in three steps:
Although data-driven marketing is an easy concept to understand, it’s slightly more complicated to put into practice. Today we break it down into three important steps. Let’s take a look:
1. Create buyer personas
For those who don’t know, buyer personas are fictional profiles that represent your company’s best buyers. A good buyer persona combines research, observation, and existing customer data within a single profile. It represents the ideal buyer’s pain points, shared characteristics, hopes, buying preferences, and much more.
Buyer personas compile your most important customer data and package it in a way that’s easy to access and understand. With buyer personas you no longer have to dig for customer information or guess your buyer’s preferences – it’s right in front of you.
In its most basic form, a buyer persona looks something like this: A 45-55-year-old male, who earns more than $100,000 yearly, and has a habit of making big purchase decisions without much forethought.
It takes a significant amount of time and effort to create a comprehensive buyer persona – but it’s well worth it. Consider these statistics (source):
- 56% of companies have created higher quality leads using buyer personas.
- 36% of companies have created shorter sales cycles using personas.
- 24% of companies created a higher volume of leads using buyer personas.
Here are the three basic steps you must take to create buyer personas:
- Compile customer and prospect data from as many sources as possible.
- Analyze the data to draw important parallels between your best buyers.
- Organize these insights into several different buyer personas that represent the majority of your customer base.
Of course, this is a very simplified explanation of buyer persona creation. For a more complete guide, check out the following blog post: The Beginner’s Guide to Buyer Personas.
2. Use your buyer personas to inform your e-commerce marketing decisions.
Now that you’ve created your buyer personas, it’s time to put them to work. Your buyer personas and the data used to create them should inform every marketing decision you make, no matter how big or small. That includes everything from the language in an email campaign to the product imagery on your website, and more.
Here are a few specific real-world applications to get you thinking:
- Email segmentation: Segmenting your email lists based on buyer personas allows companies to send more targeted marketing emails. Rather than a one-size-fits all email approach, list segmentation by buyer persona allows you to tailor your emails to the specific wants, needs, and interests of your best buyers.
- Influencer marketing: Influencer marketing is an effective way to leverage the reach of an industry expert to reach more of your target audience. But, if you offer a multitude of products, it can be difficult to choose an influencer who speaks to your entire customer base.Buyer personas remove the guesswork from this process. So whether you choose one or several influencers to work with, you can strategically work with people who align closely with your buyer personas.
- Channel selection: Buyer personas don’t just tell you who your customers are, they also tell you where they are. Some of your customers are more likely to make a purchase online than in stores. Some check their email more frequently than social media. And some choose to use their cell phone over a desktop computer. This information matters. Part of the buyer persona process is figuring out where your prospects spend the most time and how they prefer to receive marketing messages. This information allows you to be more strategic with your channel selection, which in turn stretches your marketing budget further and makes your efforts more effective.
- Campaign timing: We’ve covered the who and the where of buyer personas—but there’s also the when to consider. When do your best buyers prefer to browse, purchase, or share your products? Use the data gathered during buyer persona creation to time your campaigns perfectly—it will pay off. In fact, 81% of consumers want brands to get to know them and understand when and when not to approach to them (source).
- Optimization of the buyer’s journey: Unless we’re specifically tasked with doing so, we don’t often reflect on the logistics of our buyer’s journey. But, using data, we can make a few small changes that drastically improve conversion rates.After researching your buyers, consider how they prefer to make purchases. Do they typically prefer to educate themselves about your products? Or do they want a little more hand holding? A comfortable purchase process can be the difference between making a sale and losing a person’s business forever.
3. Evaluate results and optimize further.
After you create buyer personas and use them to inform your decisions, you still have work to do. One of the most challenging and important aspects of data-driven marketing is keeping up with your rapidly decaying customer data. Consider this statistic: customer data decays at a rate of 30% each year; in some markets, that number can be as high as 70% each year (source).
Neither your customer data nor your buyer personas are static. Think of them as fluid and ever-changing. Buying habits are constantly influenced by new technology and customer changes.
For this reason, it’s critical to consistently reassess your buyer personas and the data used to create them. Don’t wait for your campaigns to grow stale before you reevaluate your buyer personas. Instead, make it a habit to regularly review campaign results, audit your customer data, and make changes to your strategy as necessary.
As soon as you become complacent, your strategy will become stale and outdated.
The benefits of a data-driven approach to e-commerce marketing:
Aside from the benefits we’ve already discussed, a data-driven approach to e-commerce marketing has a few lesser known – but equally important – benefits. Let’s look at a few:
1. Improved personalization:
If you have yet to catch on, the reason data-driven marketing works is because it allows businesses to hyper-personalize the customer experience. And, these days, personalization is the gold standard among marketers. Not only do customers want personalized content, they’re beginning to expect it. Consider these personalization statistics:
- 77% of consumers have chosen, recommended, or paid more for a brand that provides a personalized service or experience.
- 79% of organizations that exceeded revenue goals have a documented personalization strategy.
- 59% of customers say that personalization influences their shopping decision.
2. Better customer engagement:
When you serve more personalized messaging that truly resonates with your audience’s preferences, your customers will be far more inclined to engage with your content. Not only does this lead to more sales and increased revenue, but it also facilitates stronger brand awareness and customer advocacy.
3. Insight into campaign performance:
As with any marketing strategy, data-driven marketing requires analytics and analysis to measure a campaign’s success. But, with data-driven marketing, the most important factor is the audience itself.
Here’s why: If every person to engage with your marketing is qualified, then conversion rates won’t be skewed by irrelevant leads. This means you can more accurately judge how the performance of your copy, design, layout, and other creative elements resonate with your target audience.
Examples of Data-Driven E-Commerce Marketing:
As we said in the introduction, the concept of data-driven marketing is simple—but putting it into practice is an entirely different story. So, before we wrap this up, we’d like to leave you with a few examples of data-driven marketing.
1. Example One: A Popular Footwear Company
A blog post from Apsis tells the story of a popular footwear retailer in Sweden who sought a better method of website personalization. In this example, the company had two main sources of data -customer data and behavioral data. Unfortunately, these data sources lived in separate silos. So, while the company knew who their customers were, they couldn’t definitively say how they were behaving online.
To fix the issue, the company merged the two data sources to paint a more complete picture of their customer base. Here’s how Apsis explains it:
“By segmenting and profiling customers based on online behavior, the footwear retailer was able to target the individual customer with relevant deals, website content and product recommendations. In this way, Hank the Hiker wouldn’t receive deals on stilettoes, and Annie the Anesthesiologist and mother of four would receive relevant deals on children’s footwear.”
2. Example Two: The Cable Provider
This next example comes from a popular cable provider. After analyzing their customer base, the company realized that most of their customers make big purchases after moving to a new home. To capitalize on this, the cable provider purchased data from the United States Postal Service to help them identify people who recently moved.
From there, they created a multichannel marketing campaign specifically geared toward this new buyer persona, “the mover.” Read more about this example here.
3. Example Three: A Large Online Retailer
A large online retailer sells an enormous range of products and services. After analyzing purchase trends, the company realized that certain products were more likely to be repurchased than others.
Wanting to take advantage of this information, the company released a new subscription service that allowed people to schedule the delivery of certain products on a predetermined basis. This proved to be a highly successful tactic. When shoppers knew they had a delivery scheduled, they were less likely to go out and buy a similar product from a different retailer.
And there you have it, the definitive guide to a data-driven marketing strategy for e-commerce. As you have probably realized by now, data-driven marketing can take many different forms. How you interpret and use your data is up to you – but remember: if you’re not constantly looking at customer data, purchase trends, or behavioral analytics, you’re likely missing out on important business opportunities.
We hope you learned something new from this post and, if you already practice data-driven marketing, tell us how it works for you. Have you found a way to leverage your customer data in a way we haven’t mentioned yet? Let us know!
Author´s Bio: Molly Clarke is a Senior Marketing Manager at Zoominfo where she writes for their B2B blog. ZoomInfo offers the most accurate and actionable B2B contact database to help organizations accelerate growth and profitability.