Data-driven marketing is a form of direct marketing using databases of customers or potential customers to generate personalized communications in order to promote a product or service for marketing purposes.
The method of communication can be any addressable medium, as in direct marketing. This has transformed marketing from an innovative approach to a fundamental part of advertising and business strategy; it can now be defined in multiple ways, but at the most basic level, it can be explained as follows:
Data-driven marketing refers to strategies built on insights pulled from the analysis of big data, collected through consumer interactions and engagements, to form predictions about future behaviors. This involves understanding the data you already have, the data you can get, and how to organize, analyze, and apply that data to better marketing efforts.
Although there are many reasons why companies use data-driven marketing, more often than not, its intended goal is to enhance and personalize the customer experience. To provide more clarity around the topic, we’ve outlined key benefits and common challenges of data-driven marketing, in addition to example applications.
Personalized Marketing: It’s essential that companies convey the right message, to the right audience, at the right time. Data-driven marketing allows brands to create a customized campaign that converts leads through a deeper understanding of the customer profile.
Clear-Cut Clarity: With a wealth of information in their database, marketers can sift through to determine the most accurate and actionable information about customers and prospects. With a data-driven approach, it becomes much easier to separate and group the target audiences that you’re trying to reach.
Multi-Channel Experience: Marketers can leverage data to extend reach across multiple networks, and take communication beyond just email. Distributing data- driven ads across channels, through automated marketing campaigns, will ensure that your message is consistent, aligned, and reaches each recipient in the perfect place and at the perfect time.
Better Product Development: Data-driven marketing considerably diminishes product failure rates. Companies can establish a better understanding of their target audiences, which leads to the development of better-suited products for that particular market.