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What does data-driven actually mean?

This content is produced by a member of The Drum Network, a paid-for membership club for CEOs and their agencies who want to share their expertise and grow their business.

How do you become a data-driven business?

Anyone who works in or with the contemporary digital marketing industry will have noticed the increasingly common claims of agencies to be ‘data-driven’ and ‘insight-led’. Which is great, right?

Well, perhaps, but first it’s necessary to understand what these agencies mean by ‘data-driven’ and then be clear on what a data-driven agency can actually do for your business. Collecting data is one thing, but what tangible results can you expect from your decision to utilise customer and sales data within your wider marketing strategies? And, in a post-GDPR landscape, how can you ensure that you are collecting and storing an appropriate volume of only the most relevant data?

More than enough

A good question to start with when considering your business’s current data strategy is: how much data are you currently collecting versus how much are you actually using to inform strategy/planning? Statistics suggest only 50% of B2B marketing and sales decisions are backed by data-based insights.

One way to provide focus to your data collection activities is to ask what data informs personalisation within digital campaigns. These days, simply including a customer’s first name in an email no longer counts as ‘personalisation’ but there is a fine line to be walked – how can businesses keep up to date with personalisation without looking like they’re stalking their customers?

Your business type and vertical market will often inform the type of data you collect and the ways in which you can utilise it to better understand the motivations of your consumer, as well as gaps where you might be falling down in terms of communication and engagement.

Ecommerce businesses, for example, are in a great position to use past sales data to recommend new products, or using the number of page visits to view trending products they can then react to with an offer.

Some businesses deliver personalised landing pages based on things like device, location and time. Other businesses utilise a recommendation engine to show different products users might like, discovered through past purchase and customer data. An interesting statistic from MTA shows that over 35% of Amazon’s sales are generated through recommendation data, so it’s a technique that has been proven to work.

Essentially, brands that can offer an obvious and engaging value exchange are the ones that encourage the delivery of data. Customers are willing to part with their information if they know they will get something they truly need, in the form of products and services that are tailored to them. Salesforce data shows that 62% of consumers actually expect offers and discounts based on their past purchases.

Analysis and implementation of this data into an actionable strategy will more than likely require partnering with an agency with relevant experience and expertise in doing just that.

What does a data-driven agency actually do for a business?

In short, any agency that makes claims to be data-driven should help its clients to discern the value of the data collected and find routes into using that data to achieve tangible results.

An obvious example of this would be helping clients to inform strategy through attribution modeling. By analysing data to understand where your traffic, leads and sales are coming from online and the varied customer journeys involved, the insights gained can be used to optimise your online spending on media partnerships that truly pay off.

Your data may show sales spikes during commute times which might thereby give you a deeper insight into your demographic. You can capitalise on this by offering time-sensitive discounts on services. Or, perhaps your seasonal analytics demonstrate a drop off in traffic or sales at a certain time of year. Again, you can react to this data by proactively showcasing an offer during these periods of downtime to boost sales.

For the uninitiated, reams of data can be hard to understand and even harder to interpret into meaningful insights. For larger organisations, it can also be tough to work out which data applies to which arm of your business – the involvement an agency adds clarity to these figures, allowing you as a business owner a better understanding of how your key audiences see and interact with your business.

Of course, data also has its limitations. A good agency has a healthy mix of data and heart, bringing together scientific knowledge of the figures with a passionate interest in the business, its goals, KPIs and general ethos. A good agency will be able to spot the limits of data and create human-centered strategies and campaigns to fill in the data gaps.

How can you embrace a data-driven model in your own business?

There is a dizzying array of tools on the market for data collection, storage and analysis. Finding the right tools for your business is very important and the selection process can usually benefit from the inclusion of an experienced agency to provide an independent and impartial perspective on the various technologies on offer.

Investing in a DMP (data management platform) can help make sense of gathered data by integrating first-, second- and third-party data into one area where it can then be segmented. A number of DMPs utilise AI and machine learning algorithms to drill down even deeper into the data, helping to create smarter segmentation.

Another key step on the way to becoming a data-driven business is to foster a culture of analytical measurement throughout your organisation. Forget about the way things have always been done: it’s time to test those long-standing assumptions against the alternatives and use science and data to show the way forward. Once your team begin to see the value of basing their decisions on more than hunches and tradition it becomes easier to embed data-based decisions at the heart of your marketing strategy.

That sort of buy-in from the wider team is important because the data you need to provide true insights are dotted all around your organisation. One of the best ways you can utilise your internal data is through your content strategy. Elements like sales trends, user behaviour, and survey data can even be anonymous as the numbers will speak for themselves. Instead of using another company’s research and figures, you can get real insight by using this data that is not replicated anywhere else online. The content you create from this will, therefore, be original and add more authority to your brand.

Close collaboration between teams will be required to get the best from all your data streams and, in some cases, the key barriers to progress will be inter-personal rather than technical.

Jasmin Dreher is head of digital at Gravytrain

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