Demystifying Data-Driven Approaches: Three Facts
Simultaneously, the breadth of marketing responsibilities has increased exponentially. In addition to driving sales revenue, these responsibilities now span across pre and post-contact communication, brand persona development, awareness building, demographic and psychographic breakdown for targeting, territory planning, overall consumer experience, monitoring channel and portfolio performance, managing business KPIs and referral propagation — to name a few.
Let’s stop here for a second and ask ourselves a question: how are we possibly going to do all these things and, more importantly, tie it all together so it starts making sense? Knowing about these responsibilities is one thing, but making it all come together is another — and perhaps a lot more difficult.
Enter the savior — data. The creators of Star Trek had it right decades ago, when they made Lieutenant Commander Data an integral part of their mission, and marketers now have a chance to do it again. Based on Star Trek facts, Lt. Cmdr. Data isn’t commissioned until Feb 2, 2338, and given that marketers are thinking about data today, they’re technically a little ahead of time!
A recent report from eMarketer shows that about 91 percent of marketing professionals worldwide are using the power of data for their segmentation and targeting strategies. I consider this a radical shift in mindset from merely a decade ago, when information dissemination was not this rapid and the use of data to drive efficiencies was a luxury rather than a necessity. There are, however, facts and myths associated with using data-driven approaches for business. In my conversations with theorists, practitioners and leaders, I found a few common themes.
1. Data-Driven Approaches Deliver a Better Experience and a Better ROI
Very few people disagree with this statement. Those who use the power of data have already seen it, and those new to this concept have probably heard of the potential benefits from other sources — blogs, social media, magazines, newspapers, journals, periodicals, professional connections, you name it. Knowing where your customers are, what stage of the decision cycle they are in, who is influencing them and how you can help them move toward their need (which may or may not be what you have to offer at that time) helps keep costs down, makes expenses relevant and applicable and increases sales conversions. This leads to a higher Return on Investment (ROI) or Return on Spend (ROS) — whichever way you measure it. Additionally, as the customer interaction is relevant at each stage, the overall experience is a lot more pleasant, which keeps the customer coming back for future purchases. Marketers often refer to this as “extending the Lifetime Value (LTV) of the customer.”
2. It Can Potentially Align Your Organization Better
Line managers, middle-managers and executives all face situations where there’s a difference of opinions among team members. A good manager or a good team will often look at these competing points or priorities and use data to guide the next steps. Some problems may become trivial after data are used for decision making. Even tougher issues with large strategic implications, such as expanding into a new line of business or launching a new product in a new region, can be better planned and structured by looking at internal and external data. The use of data may or may not reduce the number of differences, but it certainly helps by addressing the problem quickly and by aligning the group toward the next set of steps.
3. It Requires Organizational Support
In my last piece, I outlined the importance of sensory and motor functions in your organization. The identification of this structure is important as it determines the breadth of usable data your organization has. This then helps determine the missing pieces of information you will need to collect to achieve the purpose behind your data-driven approach. It’s important to realize a data-driven approach does not work in a silo, and unless you can look into the various parts of your organization, it will be difficult to develop decisions that translate into higher sales, more customers, a better customer journey, higher brand awareness or any other business goal you have. Data-driven approaches require organization-wide participation and support.
In the conclusion of this two-part series, Singh outlines the three biggest myths surrounding data-driven marketing in higher education.
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“Data Driven Marketing Efforts Increase”, eMarketer, August 6, 2013. Available at http://www.emarketer.com/Article/Data-Driven-Marketing-Efforts-Increase/1010108
Ramendra Singh, “Marketing Strategies to Keep Institutions in Lock-Step with their Customers (Part 1),” The EvoLLLution, March 18, 2014. Accessed at www.evolllution.com/opinions/marketing-strategies-institutions-lockstep-customers-part-1/
Ramendra Singh, “Marketing Strategies to Keep Institutions in Lock-Step with their Customers (Part 2),” The EvoLLLution, March 25, 2014. Accessed at www.evolllution.com/opinions/marketing-strategies-institutions-lockstep-customers-part-2/
Author Perspective: Administrator