150805 Advertising Age_5 Ways to Win With Data-Driven Marketing
May 8, 2015
Best Practices: Five Ways to Win with Data-Driven Marketing
How to effectively target prospects and improve marketing ROI
Data-driven marketing has come to the forefront for companies that want to better
engage their customers and prospects. With data-driven marketing, firms are able to
gather, integrate, and assess data from a variety of internal and external sources to
help enhance value.
In "The Value of Data: Consequences for Insight, Innovation, and Efficiency in the
U.S. Economy," the Direct Marketing Association's Data-Driven Marketing Institute
points out that the flow of data throughout the data-driven marketing economy is
forcing traditional producer-centric firms to become increasingly customer-centric.
In the old days, in the words of Henry Ford, "Customers could have any color car
they wanted, so long as it was black."
Here are five ways companies are using data-driven marketing to enhance customer
value and gain better positioning within their respective industries:
1. Determine what really makes customers tick. According to the DMA, data-
driven marketing is about discerning what customers want and need and
engineering the company to provide it: "The more firms can use data to develop a
360-degree, multi-channel view of what customers think and want, the more the
customer will truly be king." Through the use of both internal and external data,
companies are learning how to "crown" their customers -- truly understand what
makes them tick, and then develop campaigns that engage them in the most
effective manner possible.
2. Set baselines for campaign effectiveness. Data-driven marketing has effectively
replaced the traditional "hit-or-miss" test component of the typical direct marketing
campaign. For example, we normally ask new clients for one to two years' worth of
data in order to identify statistically relevant response curves for past campaigns
and marketing efforts. We then use a statistical approach to web attribution
2. analytics to measure the response curve of TV airings and extrapolate the hidden
signal from the visible signal through a proven methodology. With this information
in hand, marketers can set baselines for current and future campaign effectiveness.
3. Block out the "noise" and focus on what's relevant. When assessing data over
multi-year periods -- and across different marketing channels -- it's not unusual for
things to be extremely "busy" at the outset. There's a lot of static and responses are
all over the place. However, by using proven data-driven marketing techniques, you
can start to pull out the relevant information, analyze it over time, pick up on traffic
patterns, and drill down to specific marketing touch points (i.e., number of website
hits that come in when a specific direct-response show airs).
4. Determine exactly how customers are responding. When a major online
retailer needed a better way to harness its online data and figure out where its
customers were coming from, the deal site ramped up its data-driven marketing
efforts. To help, Hawthorne gathered all of the company's data, input it into our
analytics system, and then used the resulting information to pinpoint where the
online sales activity was coming from. Other companies have taken a similar
approach by honing their approach to targeting particular demographics through
5. Reach extremely targeted customer bases. A company like Dollar Shave Club,
which has made a name for itself by sending razors to customers' doors for a
monthly fee, knows that it's probably never going to be able to go head-to-head with
Procter and Gamble. After all, the latter basically targets every man and woman
around the world with its products. However, the smaller entity can use data-driven
marketing strategies to fine-tune its own targeting and create demand for
consumers that are looking for a more customized, membership-oriented
When executed correctly, data-driven marketing helps companies reap more from
their investment in media and advertising. It lifts sales on already successful
product lines, helps membership-based companies better target their audiences,
and creates higher consumer demand for brands that may be languishing on the
virtual or bricks-and-mortar store shelves. By strategically narowing down your
audience to a select group of individuals who are most apt to respond to your
advertising, you can more effectively target prospects and consumers, enhance
response rates and improve your marketing ROI.
Jessica Hawthorne-Castro is CEO at Hawthorne Direct.