Using Data in Marketing: The Power of Data-Driven Insights

Consider the following statistics that highlight the importance of adopting a data-driven marketing mindset. A study found businesses that use data-driven marketing see up to 5 to 8 times more revenue opposed to those that rely on traditional methods.

Customer acquisition also grows with data-driven approaches, with a separate study citing that data-driven organizations are 23 times more likely to acquire customers.

The benefits of data-driven marketing are clear: more revenue and more customers.

In this article, we’ll explore multiple facets of using data in marketing such as the type of data marketers should be looking at, data’s myriad benefits, the tools that can help provide more visibility into your data, and strategies for implementing data-driven marketing.

Types of Data Used in Marketing

It can be difficult to discern what exactly constitutes marketing data. Data-driven marketing encompasses a mix of customer and competitor intelligence and looking into other types of external influences (economy, global issues, wars) which makes it essential to familiarize yourself with each to have a better understanding of what to look for.

For the purpose of this post, we’ve separated the main data marketing into three distinct categories which include customer, market, and performance data. Each category has its own unique distinctions and nuances, and with a thorough understanding of these, it can help marketers identify what’s most important to measure.

Customer Data

As the name suggests, customer data gives you a transparent view of how customers are engaging with your business and what’s motivating them to choose your business over your competitors. This type of data can be very impactful for businesses as it helps inform your messaging, segmentation, and customer journey mapping.

GA4 Demographic Data Example

There are three types of customer data worthy of mentioning including demographic, behavioral, and transactional data.

• Demographic: Demographic data gives you a look at who your target audience is exactly, giving your business information around their age, gender, location, income bracket, highest degree received, and more. Demographic data is important as it allows marketers to better segment their audiences and who is truly worth targeting.
• Behavioral: Behavioral data looks at how customers engage with your business any time or place they encounter it such as on a social media platform or when they receive your monthly newsletter. A few different types of behavioral data marketers would want to look into include click through rate, likes or follows on social media, website traffic, and more. Behavioral data can identify numerous ways to improve marketing efforts such as common customer complaints, roadblocks in purchase, and content types that resonate more with your intended audience
• Transactional: When looking at transactional data, marketers are looking at how often customers are purchasing, their average order size, and if they’re coming back to purchase more These insights can give marketers information into products customers are gravitating towards, which products could use some more love and promotion, and products to upsell. Understanding these figures can help businesses focus on what to promote, what’s already doing well, and what might need more marketing resources.

Market Data

Market data strays from looking solely at customer information but rather at external factors that could impact sales and business in general. Some of these factors might include the economic environment, current events, wars, inflation, presidential elections, and much more. A few types of market data to look for include:

• Market Trends: External forces can have a significant impact on sales and customer behavior, which is why it’s important for marketers to keep up with current events. This highlights the importance of continuing education and staying informed about events that impact businesses on a greater scale. Market trends have the power to negatively and positively sales, irrespective of your marketing efforts.
• Competitor Analysis: Knowing what your competitors are doing, falling short on, and excelling at is important. Competitor intel should happen often, analyzing how they rank in the search engine results pages against keywords you’re trying to target, common complaints customers have when doing business with them, how their price point compares to yours, their level of service, and more. Knowing where your competition is lacking enables your business to bridge that gap and become the vendor of choice.

Semrush Competitor Data Example

Performance Data

It’s integral to track how each of your marketing efforts are performing to ensure you’re allocating resources appropriately, prioritizing the right initiatives, and identifying high-performing and low-performing campaigns.

By doing so, businesses are able to assess how to make the best use of their dollars and employee’s time. A few diverse types of performance data to consistently monitor include:

• Key Performance Indicators (KPIs): KPIs are quantifiable metrics that can help your business determine the effectiveness of marketing initiatives. These metrics are tangible proof of whether an effort is excelling or stalling. KPIs will vary by platform and channel. For example, your social media KPIs will look different than email marketing measures of success. It’s important to understand KPIs to track by marketing efforts to make informed adjustments to improve performance.
• Campaign Analytics: Marketers often run comprehensive campaigns that touch more than one channel such as a product launch that reaches potential customers through an email, social media post, podcast episode, and direct mailer. It’s important to bucket these efforts together to understand the true impact of the effort and learn how to improve future marketing campaigns. Campaigns often run during a specific period of time which can make it easier to track performance during those certain dates.

Benefits of Data-Driven Marketing

Undoubtedly, capturing consumer’s attention is more challenging than ever before. Their preferences shift in an instant and current market trends aren’t favorable across a variety of business segments. Data is the one proof point that is certain in this highly unpredictable era, helping marketers make more informed decisions that lead to favorable results.

Imagine your business operating at a consistent loss, consistently watching your bank account dwindle without any clue as to why you’re losing money. Without data, a business isn’t poised for success and is set up for failure.

When considering the frequency of tracking your marketing metrics, sporadically looking at your numbers won’t suffice. Instead, data-driven marketing entails a frequent and recurring look at customer data to inform marketing efforts and make sure those efforts are worthwhile.

Using data in marketing offers numerous advantages that can significantly boost a business’ bottom line, grow its customer base, and keep loyal customers engaged for years to come. It also ensures your marketing messaging doesn’t go unnoticed, helping to reduce irrelevant content and enhance customer communications.

Here are a few of the main benefits of operating a business with a data-driven mentality.

Enhanced Targeting and Personalization

Almost every (90%) marketing leader says personalization helps boost business revenue.

Personalization has become a cornerstone in helping drive marketing success. A recent study found that nearly every marketer (95%) said that their personalization strategies are (somewhat or very) successful. 

Knowing marketers are finding personalization to be highly successful, it can benefit your business too by using data to your advantage.

Using data in marketing personalization ensures your business is able to craft personalized messaging, learning what consumers are most interested in and sending them content related to that interest.

For example, a customer may have clicked on and visited a certain product page on your website multiple times. It would benefit the business (and the customer) to send the customer tailored outreach highlighting that product through email marketing or through remarketing.

When a customer sees targeted outreach, they are more likely to feel the business understands their needs and unique buying preferences, leading to action. Customer experiences are enhanced, motivating customers to convert, stay engaged, and return for more.

Improved Decision-Making

Decisions based on guesswork and intuition rarely lead to impactful results. Data-driven marketing allows businesses to guide their marketing efforts based on solid evidence and numbers that give more credence to their decision-making.

Numbers can be cited for why decisions are being made when asked by upper management, serving as a foundation for building stronger marketing campaigns.

Data drives improved decision-making, enabling marketers to see what’s working with every marketing initiative. It also highlights efforts that aren’t working well, allowing marketers to pivot and refine their strategy to achieve greater success.

Additionally, data helps marketers establish realistic goals and a baseline for their key performance indicators, ensuring goal setting is achievable for team members.

By measuring success frequently, weekly or at minimum on a monthly basis, marketers can be agile and adjust their tactics when they see a dip in numbers. Being able to identify problems as they occur can help mitigate larger issues that may arise when problems are left unaddressed for an extended period of time which can result in lost revenue.

Increased Return On Investment

As previously mentioned, when marketing campaign efforts are not effectively tracked or monitored, wasted dollars are on the table. Return on investment (ROI) is one of the most critical aspects of any business effort. No business wants to continue to spend money on efforts that yield a negative return.

Data can help mitigate the chance of losing hard-earned money and allocate resources more effectively. Data informs what channels and campaigns yield the best results, highlighting where to focus resources in the future.

Many businesses operate on tight marketing budgets, making it crucial for marketers to spend wisely for the betterment of the organization. With precise data, marketers can pinpoint performance and stray away from tactics that aren’t producing results.

Every dollar that’s spent on marketing becomes more strategic, shining a light on the importance of marketing at an organizational level leading to more job security, increased opportunities for advancement within the business, and optimal outcomes in terms of money management.

McKinsey & Company suggests a universal dashboard that every stakeholder in the organization can view to have a transparent view of performance. The same research suggests that organizations that use data-driven marketing strategies achieve a 15% increase in ROI on average.

Better Customer Insights

Having a firm understanding of what motivates and interests your customers is pivotal to enhance customer experience and sales. Each of your customers have their own unique needs and preferences, however, they often seek out your business to solve a common challenge.

Knowing what motivates potential customers holds the key to converting them. Data can provide valuable insights into what engages and motivates your customers most.

For example, you may A/B test an email subject headline to see what resonates best with your subscribers. One headline might have an emoji in it and the other might only have text.

By analyzing the open rate for both diverse subject lines, you’ll be able to discern whether your customer base prefers emojis or if they like you to stick to plain text. This can help inform future email subject lines to help you improve your email open rate.

In another example, a marketing team may come up with two different ad concepts with divergent copies for each. Again, the team might A/B test the two different options, seeing which encourages potential customers to click through more.

A/B Test Email Overview Example

Having insight into what has a higher click-through rate can inform the marketing team which ad to display more often, ensuring PPC money is allocated towards the ad that captures attention most.

As we can see in both these examples, better customer insights breed better results and ultimately build bottom lines.

Strategies for Implementing Data-Driven Marketing

Data-driven marketing requires thoughtful execution to ensure marketing teams are interpreting and making the most out of the presented data. To successfully implement your business’ data-driven marketing strategy, we recommend taking the following steps:

1. Set Clear Goals and Objectives: Ensure your marketing team is aware of and aligned with the goals you set for each channel and campaign. Keep in mind that every goal and marketing effort should align with broader business goals (such as supporting a product launch, driving more organic traffic, reducing steps it takes to purchase, improving customer retention, etc.). Communicate these across the organization so every department is aware and part of the effort.
2. Define KPIs: Clearly define how you’ll measure success by identifying key performance indicators. Regularly assess if and how you’re reaching those KPIs and report performance to wider teams such as to your c-level executives to show how marketing is impacting revenue.
3. Collect Data: Ensure your team is set up for success by leveraging the right tools for data management. While some platforms allow for comprehensive data management, most marketing efforts require separate platforms to effectively measure results, such as Hootsuite for social media analysis and HubSpot for email marketing. Keep in mind the most affordable option may not be the best option.
4. Check Data Quality: Keep a pulse on your data and take note of any large fluctuations. It’s essential to ensure your data is accurate and reliable to make the right decisions. Look for duplicates, noticeable changes, and abnormalities and investigate further to diagnose the issue.
5. Analyze Data: Analyzing data will look different depending on the platform. In most cases, data analysis is clear and transparent, and you’ll be easily able to assess performance based on the numbers presented. For more advanced data analysis, roles like marketing analysts and statisticians may need to be leveraged to ensure full comprehension.
6. Implementing Change: Use your data to your benefit. Implement data-driven changes to your marketing efforts and campaign to match the preferences of your target audience. Your data serves as an evidence-backed map to follow to achieve maximum success and improve marketing-related outcomes.
7. Continue to Track: Data mining isn’t a one-time and done effort. It requires rigorous oversight to ensure you’re appropriately measuring every facet of marketing. Track your efforts continually to make it more than a habit but a day-to-day task that becomes an integral part of your routine.

Hootsuite Analytics Example

Using data in marketing is a must for revenue-driven strategists and leaders. It informs your work, provides an actionable plan for achieving better results, and provides the necessary evidence to back your decision making.

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