The Important Role of Data in Your Marketing
The basic aims of marketing is three-fold. First, you must locate potential customers who may have an interest in your product or service. Then, you need to engage with potential customers and make them aware that your brand exists. Third, you must drive their interest in purchasing.
However, it is impossible to take any of those steps without data. Without data, you’ll have trouble identifying consumer needs, or how potential consumers access your information. You’ll miss consumer trends that can help guide your marketing dollars toward the current and most effective strategies, or risk pouring money into strategies that don’t work. In other words, data should be the driving force behind all of your marketing decisions.
How Is Marketing Data Collected?
To get a better understanding of data-driven marketing, a basic understanding of where data comes from is a key factor. Some data types consistently used by online marketers include:
- Captured data. Captured data generally refers to all data based on consumer behavior. Businesses typically use Google Analytics to compile data such as clicks; in addition, queries entered into a Google search result in data such as keyword frequency, location, and more.
- Transactional data. Purchases produce transactional data, and they can tell a business which products consumers are buying, which retailers experience the highest volume, and more.
- User-generated data. User-generated data is collected by simple observation of users’ reactions and interactions on social media sites, or on rating sites like Yelp or Foursquare. This data can help gauge consumer opinion.
- Collected data. A consumer filling out a survey, pre-purchase lead, or some other form generates collected data. The data collected may be contact or demographic information that helps a business gauge which populations are showing interest.
- Compiled data. Compiled data refers to a larger set of data, such as census or internet usage data, which can reveal larger trends.
- Created data. Created data refers to a set of data produced by a company’s individual research. For example, a business could choose to perform a study or form a focus group to gather data about a population’s reaction to a new product.
How Do Companies Use Data?
In order to more effectively reach consumers, a business will analyze a set of data to determine the information collected. For example, a recent survey revealed that only 25% of potential customers are willing to pay more for faster shipping – a rate that dropped over 20% from two years ago. A business wanting to increase online sales would determine whether its shipping rates are competitive, and whether changes to the tiers of shipping it offers would generate more purchases.
As always, however, you must weigh marketing data against existing data. Perhaps the business in the previous example stands to take on significant expense by absorbing customer shipping costs. The business would then need to determine if the expected increased revenue (yet another set of data) would be substantial enough to offset the additional shipping.
Another killer example of a data-driven marketing strategy is that of Greenpal, a Nashville lawn care service. Their Google Ad campaign targeted the entire metro area, with a resulting CTR over 1% and conversion rate over 10%. These are good numbers but there was room for improvement. The CEO of Greenpal and his team found that a market segment in a particular area was a price-sensitive demographic. They targeted those zip codes with a cost-friendly appeal and an appropriate landing page. This resulted in a 200% increase in CTR and 30% improvement on conversions.
Why Should Your Business Use Marketing Data?
You can use properly analyzed data to make decisions about where your marketing dollars are best spent. If consumers in your target market tend to spend a great deal of time on social media, analysis of data from their usage patterns, the types of ads they watch, and the types of content they share can help you invest in the strategies that are most likely to reach them. Likewise, if data reveals that your business blog posts aren’t producing as many click-throughs to your website as you’d like, you can seek additional data to guide your changes or focus your attention elsewhere to drive consumer reach.
If you’re ready to see how data-driven marketing can help maximize your business’s marketing budget, reach out to us today.