Core Concepts of Data-driven Marketing
One word can be used to define the most important element of data-driven marketing strategies — connection.
In order to market successfully, your team not only needs the most comprehensive overview of each target demographic, but the individuals that comprise it. No longer can companies not have a “Single Customer View (SCV)”. Yet a mere 18% of marketers do. Personal details can introduce your product or service as not only relevant, but essential, to your consumer’s needs.
There are many strategies that utilize data to relate to your customers, but what exactly is data-driven marketing and how is it employed?
From data at large, to basic personalization, to its highly sophisticated and effective use in the form of segmentation, this article reviews some of the core concepts of data-driven marketing.
Data-driven marketing spans all types of data subject to change from consumer to consumer.
These different types of data can be applied using mediums like direct mail or digital advertising directed towards an individual consumer or prospect. Working in tandem with your overall marketing strategies, everything from direct advertisements and offers to online experiences can be generated on demand, making them unique to your consumer and more effective as a marketing tool.
There are a host of different marketing strategies that employ data-driven marketing methodologies.
On one end of the spectrum, there are less complicated, and easy to employ strategies such as a personalized greeting or an altered image. These are viewed primarily as “attention-getters,” meaning that they have no real relevancy to the product or service advertised, but simply make a connection with the potential consumer.
On the other end, you have complex and highly effective forms of data-driven marketing that link specific sets of consumer characteristics to your product. Not only does this connect your product to the lives of customers and prospects in very concise terms, but as a marketing tool, it ensures that your approach is highly relevant, and relevance is the cornerstone of marketing success.
Personalization with Variable Data
The term “personalization” has experienced an interesting shift over the last decade or two. Where traditionally it fell under the most basic end of variable data use, its meaning and use has expanded in the online world to highly-personalized, audience-driven experiences, typically fueled by data and complex algorithms. In variable data applications, often related to digital printing, it means simply adding personalized elements to templates, whether in the form of an altered image or altered copy.
For instance, perhaps a sporting goods distributor wants to run a promotion ahead of the fall youth football season. Using variable data like their sales logs, they send out a direct mail promotion, on the front of which is a quarterback with the potential customer’s name on the jersey.
Personalization in this manner is widely regarded as the most rudimentary form of data-driven marketing. That said, there are significantly more effective ways to utilize data in your marketing strategies. Though we have seen this applied more elaborately in the online world, there are still opportunities in all marketing mediums that must be embraced in order to maximize response and ROI.
How to Use Segmented Marketing Strategies
Segmented marketing strategies are some of the most effective you can employ. Segmentation uses consumer-specific data to build demographics to maximize market response. Segmentation effectiveness has been proven time and time again in ROI…so long as it’s built on data with integrity and applied correctly. In just email marketing segmentation alone, Lyris found 24% of survey respondents experienced greater revenue.
The effectiveness of segmentation lies in dividing large demographics into niche segments. As a result, consumers are more easily accessed, understood and related to. In this way, marketing efforts can be refined in order to market as efficiently—and effectively—as possible.
For example, imagine Company A, dealing in fiduciary products, manages large investments for their clients. In general, percentages dictate Company A should market to a more mature client base—baby boomers for instance—as they’ve had time to accumulate the wealth needed to make such investments. While this is a good start, there are plenty of baby boomers who are not in a financial position to make the types of investments Company A is looking to manage.
Segmentation would break down marketing efforts into more specific subsets of that original demographic. By logging data like age, zip code, size of family, education, etc., segmentation breaks down a wide scale demographic into more manageable markets, allowing Company A to market to the most likely candidates to make the investments they hoped to manage.
Summarized, segmentation uses data to target relatively large, but significantly more concise, demographics than basic large-scale marketing efforts.
Using Data as a Marketing Tool
Data is a powerful marketing tool, and when employed correctly, can yield fantastic results. From the most basic personalization all the way to the most sophisticated segmentation, there is a unique solution for every marketing strategy and budget.
To find out more about data-driven marketing, including all of its applications and most effective uses, stay tuned for Part 2.
Strata specializes in data-driven marketing programs and offers complete production services to execute them efficiently and cost-effectively. Explore our marketing services offerings and contact us today to learn how we can help you increase response and ROI in your direct marketing.Back to Blog