It’s very trendy to talk about data-driven marketing. Everybody’s claiming it’s the way of the future and almost everybody’s doing it.
Or are they?
Data-driven marketing is one of those buzzwords that sound awesome and intimidating at the same time. It looks like it’d make you millions, but people can’t exactly explain what it is.
Well, it’s the opposite of doing marketing in the dark, the way you or people before you have been doing it, following subjective assumptions and basing marketing decisions on guesswork.
Data means facts and it is the most solid, objective foundation to run your marketing on.
The process of making decisions about marketing strategy based on facts and data insights rather than guessing and gut feeling.
Ecommerce data consists of customer behavior and feedback, marketing performance, sales trends and product insights.
By collecting, processing, distilling and analyzing this data generated by the business, ecommerce marketers are able to:
Your store generates tons of data – customer interactions, orders, product performance, marketing campaign stats, etc., etc.
Data-driven marketing tools process this data so you see trends, correlations, insights, and results. This way, you understand better what works and what doesn’t, what’s a waste of money and time and so on.
Then, based on this knowledge, you can make marketing decisions faster and better.
Your strategy will be backed by facts and numbers, eliminating distractions and focused on the things that have proved to bring you growth.
If you’re not doing it already, you might be a bit reserved. Why should you change the way you do marketing?
One reason is your competitors who utilize their data have an advantage over your gut feeling and assumptions.
Another is that marketing now is more science than art. You need to be able to justify decisions – especially when they involve money – with solid numbers, i.e. data.
Data shows results objectively. That’s why in A/B testing you start with a hypothesis and look at the numbers to confirm or reject it. You don’t jump to action on the hypothesis alone. Informed decisions are better decisions.
Although things change over time, it’s good to have a starting point – a hint what to expect – when planning for the future.
In ecommerce, you can catch important trends looking at customer behavior: buying cycles, product use cycles, seasonality. Those are pretty much connected to your products and brand so they need to be taken into account in your strategy.
How can you understand your customers if you – in ecommerce – never meet them? You have to read their actions and decipher their wants, motifs and buying stimuli.
Customer behavior data holds the answers. It shows you how often they buy, what they buy – and like, what promotions make them buy, what’s the best way to reach them, how much they’re willing to spend on your products and so on.
If you want to sell more to those people and find more like them, this knowledge should be the basis of your offers. Thanks to data, you’ll know how to reach each customer subgroup and give them the experience they want.
When things happen is one of the easiest things to catch and act on in data-driven marketing.
Knowing when and how often people buy (different things!), when they churn, how often they browse your site without buying and so on is a gold mine of opportunities for engagement. Your email marketing will be right on spot.
The simplest data-driven email marketing campaign is an email sent exactly when people are ready to buy again – if your data says that usually happens 5 weeks after the 1st purchase, shoot at the end of the 4th week.
Since data is merciless about results, you can see what’s worth keeping and what efforts should go:
What can you do with data? Basically, anything but better.
With data, you know where your best customers come from, what offers they bite on, what messaging works, etc. So getting more of them can be a strategic effort.
When people go longer than your average Time between orders metric, you can proactively remind them about yourself to get that repeat order.
If you follow typical customer lifecycles, you’ll know when people are most likely to leave you and never return. Take chance into your hands and proactively work on retention.
Data-driven marketing increases ROI because it optimizes spending for the greatest returns. You don’t have to waste time on things that don’t bring you sales.
From product insights, you’ll know what products inspire loyalty and make customers talk good things about you.
Those are the products you need at the front so as many new customers try them and get hooked on your brand. We call that the Superstar Product Technique.
All behavior and demographic data give you a picture of the buyer.
From here, personalize their experience to fit their way of shopping (for example, buying in bulk once in 2 months, on mobile, gets free shipping because of order value) and tailor offers to reflect their taste (needs baby stuff, cares about eco options).
Once you stop guessing where people are in the mood for shopping, focus on these channels and engage actively, dropping the others.
See that a review site is a steady referral source of traffic? Get featured more on there. Notice customers from Instagram often cancel orders? Save yourself the trouble and don’t push there.
Shipping, holidays, products can all depend on customer’s location.
One example we love is that you can sell woolen Christmas sweaters to Aussies and better yet remember not everybody celebrates Christmas.
Seasonal offers can work wonders if you take the time to craft them for specific locations. Girls from Central Europe where winters are not to be underestimated will appreciate it if you don’t insist on sandals and silk dresses in your New Year’s collection.
When you track what customers do, you can react accordingly, adding value – appropriate automation is giving more content of a certain kind to those interested or offering only similar products to the ones bought (e.g. vegan supplements, or girl room decorations, or plus-size clothes).
Any automation shooting in the dark won’t get the results you want. One-size-fits-all doesn’t work anymore.
Product development is not to be overlooked. With time, you’ll know what direction your brand is taking to be relevant to its perfect customers.
Any product decisions can be solved with insights what people buy over and over, what the recommend to friends, what they buy as gifts and what gets returned.
In short, data-driven marketing is listening to data and navigating your strategy backed by numbers. Anything else is shooting in the dark.
Metrilo’s mission is to help you build your ecommerce brand and win your place in the customer’s heart. We share what we learn from our daily work with product innovators and founders here. Subscribe to our weekly newsletter to get the freshest lessons and conquer your niche.