What is Data-Driven Marketing? Benefits & Strategy

Although many marketing campaigns require creativity and brainstorming, you can use hard data acquired from various analytics tools to improve your strategy. Here’s how to do data-driven marketing properly and increase your sales.

You can get to the heights of your creativity and still achieve very little with your marketing campaigns. That’s why you need to know what resonates most with your target audience. The data-driven approach relies on evidence, not assumptions, and therefore has a better chance of succeeding.

If your marketing efforts don’t bring satisfying results, it’s time to consider a data-driven marketing strategy.

In this article, I’ll tell you everything there is to know about data-driven strategy. We’ll discuss how to do it properly, what tools to use, and how to combine it with other marketing efforts.

What is a data-driven approach to decision-making?

A data-driven approach to decision-making involves using data and analysis to inform and guide decisions rather than relying solely on intuition, opinions, or past experience. In this type of approach, data is collected, processed, and analyzed to identify patterns, trends, and insights that can be used to inform decision-making.

In data-driven marketing, you use data analysis to determine marketing decisions instead of coming up with ideas during (for example) brainstorming sessions.

To follow this approach, marketers must first define the problem or decision to be made and identify the relevant data sources. Once data is collected, it must be cleaned and prepared for analysis. The analysis process involves identifying key insights that can be used to inform the decision-making process and improve marketing efforts.

What is a data-driven approach to decision-making?

A data-driven approach to decision-making involves using data and analysis to inform and guide decisions rather than relying solely on intuition, opinions, or past experience. In this type of approach, data is collected, processed, and analyzed to identify patterns, trends, and insights that can be used to inform decision-making.

In data-driven marketing, you use data analysis to determine marketing decisions instead of coming up with ideas during (for example) brainstorming sessions.

To follow this approach, marketers must first define the problem or decision to be made and identify the relevant data sources. Once data is collected, it must be cleaned and prepared for analysis. The analysis process involves identifying key insights that can be used to inform the decision-making process and improve marketing efforts.

Examples of data-driven marketing strategies

Data-driven decision-making in digital strategy is crucial if you want to maximize your marketing ROI. Below you’ll find a list of examples where you can use data-driven marketing.

Personalization

You can use various customer data sources for personalized messaging. Use analytics tools to study your customers’ behavior to make tailored marketing messages and experiences. This technique can include; customized emails, recommendations based on past purchase history, and targeted ads based on user behavior.

A/B testing

A/B testing is one of my favorite data-driven marketing strategies. Create two versions of your campaign and test them with different segments of the target audience. Then, analyze the results to identify which variant converts better.

You can A/B test almost everything. Ads copy, creative assets such as packshots or infographics, landing pages, newsletter titles; you name it!

Retargeting

Retargeting is a strategy that involves using customer data to serve targeted ads to users who have previously engaged with your brand. For example, you can set up retargeting to display ads to users who visited your website but didn’t make a purchase or abandoned the shopping cart.

Predictive analytics

You can use historical data and statistical algorithms to make predictions about future customer behavior. By analyzing customer data through predictive analysis, marketers can identify patterns and trends that help them forecast which products, services, or features customers are likely to be interested in.

Customer segmentation

The customer segmentation strategy involves dividing your target audience into smaller groups based on common characteristics, such as demographics or purchase history. By analyzing customer data, you can create more targeted campaigns that resonate with specific customer segments.

There are, of course, more data-driven marketing strategy examples, but you should grasp the idea now. Almost anything that involves data management and analysis can be named data-driven marketing.

The most common data-driven marketing challenges

Each marketing strategy encounters some challenges, and the data-driven approach is no different. If you want to pursue this marketing strategy, here are some problems you may face and how to overcome them.

Data quality

Because data-driven marketing relies solely on data collection, you need to make sure your sources are trustworthy. Poor data quality can lead to inaccurate analysis and flawed decision-making.

If you want to make sure the data collected by your team is accurate, check your sources and use the right analytics tools. Make sure the tools you use are properly implemented.

Data integration

Having raw data collected is not enough for data-driven marketing. Integrating multiple sources of data can be challenging because different tools use different metrics or terminology.

Check if your data collection tools are compatible and make sure you understand all the numbers they provide.

Data privacy and security

In your data-driven marketing strategy, you need to make sure all this data is acquired legally and ethically. Especially now, with strict GDPR and cookie policies.

All data-driven marketing tools should have legal details somewhere in their ToS. If you are not sure about how the company is acquiring the information, contact them directly and ask. Better safe than sorry!

Skills gap

Depending on the size of the marketing teams, each person has a different set of skills and experience. It may occur that some of your teammates are not that experienced in the analytics field and are not experts in data-driven marketing. The skills gap is what could be challenging while analyzing data for your next campaign.

To overcome this challenge, invest in trainings and courses to make sure the skill set is good enough for data-driven strategies.

Measuring ROI

Although data-driven marketing is strongly based on hard evidence, some teams struggle with calculating the return on investment. You must ensure that your team has the necessary metrics and tools in place to measure the impact of campaigns and make data-driven decisions accurately.

Benefits of the data-driven strategy

Despite some challenges, data-driven marketers report many benefits of this approach. Here are some of the best advantages of data-driven marketing.

Improved efficiency

Because this type of marketing strategy is data-driven, you can easily improve the efficiency of your campaigns based on simple analytics. Check which of your marketing efforts work best and focus your actions on what works the best with your target audience.

Improved customer targeting

By analyzing customer data, marketers can better understand their target audience and create more targeted campaigns. This tactic can improve customer engagement and increase conversion rates. Accurately personalized marketing is a great data-driven feature.

Better customer experience

Data-driven marketing will allow you to create more personalized and relevant experiences for your customers. By leveraging customer data, marketers can deliver personalized messages, recommendations, and offers that are tailored to each customer’s preferences and behavior.

Increased ROI

I’ve mentioned that calculating the ROI can be a challenge, but once you overcome it, you will see that data-driven marketing can actually improve this metric. You can increase the effectiveness of your marketing efforts by leveraging data to make informed decisions and optimize campaigns.

Better insights and marketing decisions

You can uncover hidden patterns, trends, and insights just by properly analyzing complex data. Then, you can use the achieved information to improve marketing communication and sales.

Competitive advantage

Not every company is using data-driven marketing, so that may be your strong advantage. You can create more effective campaigns that resonate with your target audience and make data-driven decisions and achieve a competitive advantage.

Tools for gathering and analyzing consumer data

Fortunately for us, we live in a modern society with advanced online tools that can help us with digital marketing efforts. There are tons of companies that specialize in making apps for managing data-driven marketing. Here are some of my favorite tools that you can use. Remember that the more data sources you have, the more data-driven you become, so it’s wise to use more than one digital help (of course, if your budget allows).

Here’s a list of my favorite data-driven marketing tools that you can include in your stack.

01 Ahrefs

Ahrefs is another data-driven marketing tool that I use on a daily basis. The tool is aimed mostly at SEOs, but other marketers will also find the data useful.

Ahrefs provides users with in-depth statistics about your website, namely, your backlink profile, organic results, paid search traffic, and more. You can use it for keyword research, linkbuilding strategy planning, and many more.

02 Semrush

Semrush is a similar tool to Ahrefs, so it’s usually a matter of preference which one you’d like to have in your marketing team.

Semrush is another advanced SEO tool that provides in-depth insights about your website health (SEO-wisely), organic results, and backlink profile. The advanced keyword research features are much appreciated by many SEOs worldwide.

The tool offers a free trial so before you base your data-driven marketing on Semrush metrics you can try it out and decide on your own.

03 Similarweb

Similarweb is a handy tool that provides key metrics for websites based on various data sources. You can check the approximate traffic or demographic data that you can later use for data-driven benchmarking, competitive analysis, and many marketing types of research.

Similarweb provides a free Chrome plug-in that will bring out some of the most important statistics just with a click of your mouse. It’s a definitely useful tool in your data-driven marketing.

04 Google Analytics

Google Analytics is a free tool that probably all marketers used at some point in their life. It’s really hard to plan data-driven strategies without knowing the basic statistics about your website.

There’s a lot of controversy going on with the switch from Universal Analytics to GA4, with many marketers unhappy about the change. Frankly speaking, though, GA4 provides a lot of new useful event-based features that allow a lot of personalization.

If you are not convinced about GA4 yet and are researching alternatives, I highly recommend you check out some courses about the new Google solution before you jump to another data provider. There are some great Google Analytics alternatives, but maybe you do not realize the full potential of the free tool yet.

05 AdRoll

Last but not least – AdRoll. Data-driven advertising tools like AdRoll make marketing a whole lot easier in retargeting campaigns and user segmentation. The tool includes a lot of helpful e-commerce integrations, so it’s much easier to manage abandoned carts and not converted users.