Data-Driven Marketing - The Secret Sauce (Part 1)

Of all the blog topics that I write about, data-driven marketing is probably the one that I am most passionate about. One of our "secrets" to achieving marketing/sales success is our obsession with tracking, analyzing, and implementing data-based strategies. Maybe this is because, at heart, I am a true growth hacker, a data-whisperer who A/B tests everything and looks for patterns and opportunities based on what the data shows. Maybe it is simply because it works.

Data is true power. If you collect the right data and know how to analyze it, you will have a successful marketing outcome. This data collection must begin before you consider the marketing plan. It needs to be the foundation. It should dictate the direction and strategy that you plan on undertaking. Once you implement your plan, the data will help direct you on how to amend, alter, discard, or improve your program.

At Prevail Marketing, we NEVER guess what will drive your brand's success. Numbers do not lie. They will show you the path to success if you can collect and properly analyze the right data.

Today we are starting a three-part series on data-driven marketing. We will discuss the benefits in part one to ensure that they is no doubt as to why you need to adopt this data-driven process. In future articles, we will share best practices and the actual process that Prevail Marketing utilizes. We will discuss the metrics we track, where we pull the information from, and how we proceed with the analysis. We will share examples from previous clients for which we have permission.

Notice: We are often asked why we would share our "secret sauce" if that is the power and distinction of our program's success. Well, there are actually two reasons. The first is that this is just one program element that has been improved and refined over the years. Knowing one element does not mean you understand our program. The second and the main reason we share many of our "secrets" is that they tend to require a lot of work and activity that very few are willing to undertake. When we have shared our program with other agencies, we often hear back from them, "Hell, NO! This is too much work!"

Tracking data on the scale we do is beyond what 99% of agencies are willing to perform. It requires commitment and discipline to dedicate financial and human resources. While the data collected for each client varies based on their industry, product, and hundreds of other variables, we ALWAYS track well over 400 key performance indicators monthly for every client. We NEVER guess what is working, what needs to be improved, or what needs to be discarded.

The numbers speak to us. Maybe that is the third reason we are not afraid to share our marketing "secrets". We know that our process of analysis is just as critical to the outcome as the numbers themselves. Nobody has the analytical process and experience as we do at Prevail Marketing.

What is Data-Driven Marketing

Data-driven marketing refers to using data pulled from industry, customer, and market analytics to inform marketing decisions and optimize campaigns. Are you no longer guessing what may work? Through the intensive analysis of datasets that reflect consumer behavior, preferences, and trends, we craft strategies designed to meet the consumers where they are with the information they seek. Gone are the days of relying on intuition. We know exactly what is working or what needs to be adjusted.

Pro Tip: While this article seems to place the entirety of our success on data-driven analysis, none of the data is meaningful unless it tracks highly creative and engaging content that connects and inspires the targeted buyer personas. Data is no substitute for presenting inspiring creatives and content that resonates and motivates the buyer. Determining what type of content will excite and propel the prospect forward is derived from data-driven marketing.

Data-Driven Marketing is Job One

Many assume that data-driven marketing is simply the collection of data on how well a marketing campaign performed. The reality is that data collection begins long before we begin to conceive any marketing ideas. The data we collect at the start of each engagement drives the discussion as to what content needs to be created, how it will be distributed to the intended buyers, and how we will move each down their buyer's journey.

Prevail marketing has one of, if not the most comprehensive, discovery and assessment processes in the entire marketing industry. We don't do this so that we can boast about the degree and scope of our program. We do this deep dive into your industry, competitors, marketplace, and product so we can understand the intricacies and nuances that will drive or prevent the buyer from engaging with our client.

Prevail Marketing's process has been refined over the last twenty years to ensure that we fully map out each persona's buyer journey to become a customer. We fully understand their motivations, needs, and buying patterns. We know who they rely upon for guidance, advice, and counsel. We understand how their competitors will present their products and how they will try to counter our client's efforts.

Benefits of Data-Driven Marketing Approach

Data-driven marketing has revolutionized the way businesses approach their marketing strategies by allowing is to create targeted campaigns that resonate more effectively with their audiences. We tell our clients when they have a question about a tactic or strategy to demand we offer proof of why we are engaging in a particular course of action. The data we present is all-powerful and allows us to demonstrate the rationale of our decision. In that spirit, here are the numbers and why we rely on a data-driven marketing approach.

1. Enhanced Customer Understanding

You have won marketing if you understand what motivates prospective clients to buy a product, what they need to see at each stage of the buyer's journey, and where they go for information, education, and entertainment. This is much more than merely determining the demographics of a particular buyer persona. This is truly understanding what motivates them and how they will respond to any given marketing initiative. We drill down into our buyer persona discovery process and learn the following for every targeted group:

a) Ideal Customer Profile (ICP)

• Demographics: Identify the demographic characteristics of your target audience, including age, gender, geographic location, income level, education, and occupation.

• Firmographics (for B2B): Firmographics are similar to demographics used to segment people into target audiences. However, firmographics provide deeper insights to help B2B marketers identify their target market and develop more focused and effective campaign strategies.

• Psychographics: Go beyond demographics and understand your audience's values, attitudes, interests, and lifestyles. This will help you create messages and content that resonate with them.

• Purchase History: What are their buying patterns? Are they seasonal? Are they impacted by their mood or time of day?

• Browsing History: What are they looking at on the website? Particular products, features, benefits? What seems to be their concerns or issues?

• Social Media Interactions: Are they engaging with our social media content? What type of content causes them to click through or download?

• Influencer Engagement: Who do they follow and interact with on social media? How engaged are they with a particular influencer?

• Email Engagement Metrics: What emails do they open? What topics and formats of content do they engage with most?

• Customer service interactions: What are their post-sale engagements? Are they having issues and concerns? How were they addressed? Were they happy with the outcome?

b) Buyer Personas

Create detailed buyer personas and fictional representations of your ideal customers. Personas help bring your target market to life, making tailoring your messaging and value propositions easier.

• Needs and Pain Points: What problems or challenges does your target market face? Understanding their pain points will help you position your product or service as an effective solution.

• Priority Initiatives: What problem or issues trigger the ICP to seek a solution?

• Success Factors: What outcome does your ICP need to see to believe they found the ideal solution to their problem, issue, or concern?

• Perceived Barriers: What are the perceived barriers that the ICP has from selecting your company and the solution you offer?

• Buying Process: What process does the ICP use to decide when to purchase and from whom?

• Places of Engagement: Where does your Buyer Persona go for information, education, entertainment, and third-party verification? Are the industry leaders or influencers that they see as authoritative sources that can influence their buying decisions?

• Decision Criteria: What criteria does the Buyer Persona use to compare options and make a decision

Here is the proof by the numbers:

• Companies are 2.6x more likely to have a competitive advantage over peers if they use big data analytics. (Deloitte)

• 88% of marketers use third-party data to enhance their understanding of each customer. (Forbes)

• Organizations that leverage customer behavioral insights outperform peers by 85% in sales growth and more than 25% in gross margin. (McKinsey)

• Data-driven companies are 22% more likely to outperform their competitors and achieve above-average profitability. (Harvard Business Review)

2. Improved ROI

Ultimately, the way to measure the success of any marketing initiative is to achieve a positive return on investment (ROI). Marketing decisions backed by data are more accurate. They allow the marketer to understand which channels and activities are giving back multiples more than the effort or cost to generate them. Optimizing those activities and allocating their budgets accordingly allows better results and a higher ROI.

Here is proof by the numbers:

• 75% of companies have experienced an increase in customer engagement through data-driven marketing (Attomdata)

• According to Forbes, data-driven organizations are six times more likely to be profitable year-over-year. (Forbes)

• Marketers who use data-driven personalization deliver five to eight times the ROI on marketing spend (McKinsey)

• Data-driven organizations are 23 times more likely to acquire customers (McKinsey)

3. Better Decision Making

Knowledge is power, and the company that can mine the data most efficiently will be able to react more quickly to opportunities or problems. You have seen those companies who always seem to be at the cutting edge. Every year, they post impressive gains. That is not by accident. They have harnessed the power of data and understand that real-time insights lead to quicker and more informed decision-making.

Here is proof by the numbers:

• Organizations that leverage data-driven insights are 93% more likely to be able to deliver timely information and make faster business decisions. (Aberdeen)

• Organizations using data-driven decision-making are 19 times more likely to be profitable (McKinsey)

• Customer lifetime values are 2.5X higher for companies using data analytics (BCG)

4. Cost Efficiency

Every marketer must work within a fixed budget. We often have novel ideas that we wish there were a budget to explore. One way to free up your budget to allow experimentation is to improve cost efficiency through data-driven analysis. We know lower the cost-per-lead will ultimately improve your ROI, but what do you do with that budget you did not have to spend? You could apply those funds to proven most effective campaigns, or you can press and poke and flesh out new omnichannel marketing opportunities. Either way, if you use data-driven analysis, you will find cost efficiencies that allow you to repurpose those funds.

Here is proof by the numbers:

• Data-driven marketing leads to a 30% cost reduction in marketing campaigns (Invespcro)

• Organizations using advanced analytics save 15-25% of their total marketing budget (Gartner)

• 40% reduction in customer acquisition costs through data-driven strategies (Harvard Business Review)

5. Customer Retention

Client retention is critical for every business. Data can provide real-time information that helps you learn which customers are unhappy and likely to churn. Being able to discover these customers in time to take corrective action can mean you made your numbers for the quarter or that you are looking for a new job. We have spoken extensively about why every department must have ownership to ensure that once a company becomes a client, it remains so. Data-driven marketing helps both acquire new customers and retain existing ones.

Here is proof by the numbers:

• 45% of marketing professionals aim to acquire more new customers through data-driven marketing. (Ascend)

• Improved customer retention allows data-driven companies to be six times more likely to be profitable year-over-year (Forbes)

• Companies with data-driven customer experience strategies see 55% higher customer retention rates (Forrester)

6. Personalization

We have done a blog series on the power of personalization to drive marketing/sales success. In the era of hyper-personalization or one-to-one marketing, consumers will buy more when they feel a connection to the brand. By analyzing customer data, behavior patterns, and preferences, we can use data to construct message strategies more likely to capture attention and drive engagement. Data-driven marketing enables precise audience targeting and personalization, leading to better engagement and conversion rates. Personalization can create triggers that drive higher engagement.

Here is proof by the numbers:

• Triggered emails, which are personalized based on a specific subscriber action, boast a significantly higher open rate of 45.7% compared to the 18.8% open rate of non-triggered emails. (Epsilon)

• 80% of consumers are more likely to purchase when brands offer personalized experiences. (Epsilon)

Conclusion

Data-driven marketing offers numerous advantages that can significantly enhance a company's marketing efforts. Businesses can gain deeper insights into customer behaviors, preferences, and trends by leveraging data analytics, allowing for more personalized and targeted campaigns. Data-driven strategies enable marketers to make informed decisions based on real-time data, optimizing their budgets and resources effectively. Additionally, continuous marketing performance monitoring and analysis facilitate rapid adjustments, ensuring that campaigns remain relevant and impactful.

You are losing revenue and profitability if you are not a data-driven marketer. Marketing is hard enough and if you are guessing or using your instinct as to the best course of action, you will not prevail over the marketer who understands the numbers.