Today's ecommerce world is inundated with data. There’s so many different apps and software for tracking customers and potential customers using heatmaps, journey mapping, clicks, page view times, and that’s just naming a few of the thousands of metrics out there. Once you have the data, you have to make sure it’s accurate and then find some way to bring it all together to get to anything actionable.
Data-driven decision making sounds like more trouble than it’s worth, but ecommerce businesses that utilize data to their advantage save money, increase sales, and expand their brand faster and more effectively than those who don’t.
Data-driven marketing may also help lessen the risk of wasted advertising income and wasting time focused on the incorrect target market.
With changes in 3rd party data collection services like Apple’s IDFA declarations and changes to Facebook marketing, you cannot rely on external systems anymore. You also cannot rely solely on gut instincts or assumptions about what your consumers want or how you should promote to them - no matter how well you know your own space.
What is Data-Driven Marketing?
Data-driven marketing means that you are using data to guide your decisions about your marketing campaigns. Simple sounding but difficult to pull off in this ever changing digital marketing landscape.
It's using data that you have collected from various sources to develop a focused strategy and goal for your digital marketing campaigns and then using data to measure the success of that strategy. Lastly, using those outcomes to determine what to do next.
For example (and in the simplest terms), let's say that you have an eCommerce business and want to increase your sales revenue. You might base your strategy on targeting potential customers in specific geo-locations, as your past customer purchase data shows that they are more likely to spend more than customers in other areas.
By creating a strategy based on your data analysis, you are making more informed decisions and saving time, energy, and money that would have been spent on dead ends. By analyzing your data, you will know if your strategy is working, and if it isn't, you can adapt it to better suit your needs.
Data-driven marketing is a compelling marketing strategy, and it's not even a new concept. It's a marketing strategy that is gaining popularity because of the amount of data available to businesses and the number of apps and tools available to ecommerce shop owners.
What are the Benefits of Data-Driven Marketing?
1. You can save money by reducing waste in your marketing.
When you are data-driven, you can reduce your risk of wasted advertising spend when you choose the right target market for your campaigns. This can help you save money, as you are only targeting people who are likely to be interested in your products and services.
To do this, you would need to figure out what are the defining characteristics of your current purchasers. At Baotris, we use past-purchase surveys and interviews, journey mapping, and more to figure out what are the strongest indicators that someone will buy the product you are selling, and specifically what are the strongest indicators that they will buy it from your store.
This process helps us find the right potential customers so we can focus marketing directly to them on the channels that will reach them best, with a message that will lead to a purchase more often. It can also help you reduce wasted time on ineffective marketing, as you can quickly determine which tactics aren't working and replace them with more effective ones.
2. You can increase sales and customer loyalty.
If you can find your ideal customer, you can improve your sales (obviously) but more importantly, you can also increase your customer loyalty.
Talking to your customers is a great way to learn more about them but even that can only tell you so much as there are inherent biases such as memory bias or a desire to please. The data, if it is clean, never lies. By mapping your customer journey you can see what compelled people to come to your site and where they spent their time while on your site.
Customers who spend a lot of time on content around certain topics are curious to learn more. By servicing these types of customers and their lookalikes with educational content aimed to increase their knowledge about both your product and the environment in which your product exists, can help develop a trusting relationship. The customer knows they can come to you for how to’s, tips and tricks, and more. You’re giving them more than just a product and a sale offer. You’re giving them information. They know to come back to you, because you care about their needs.
3. You can find new customers and learn about your potential market.
When you are data-driven, you can find new customers and learn about your potential market and how your business can grow.
What do a certain group of your customers have in common? Often you can discover other hobbies and interests that customers have that are a partner intertest for your product and this leads to new groups of potential customers to market to who are more likely to purchase your product.
For instance, you may know to market your protein bar to health-conscious folks or people who love to work out, but by using data, you could discover that you have a growing number of new mothers who are buying your products because they don’t have time to cook with a new baby in the house and need something to keep them full and gives them the proper nutrients they need. With that information, you can develop special deals and offers, reach out to influencers in this space, and even build ads and landing pages that specifically target this new group.
Data-driven marketing is a powerful strategy and one that many businesses are adopting.
While this strategy isn't new, it is refreshingly different from the traditional marketing strategies of the past, where businesses would work off of gut feelings and assumptions rather than what they could track and analyze.
Any experiments that are run, should be analyzed and compared to baseline campaign metrics so you know if they are effective at increasing your sales or brand awareness, depending on your goals.
Many businesses realize that with the amount of data available to them, they can make better, more informed decisions with their marketing, resulting in increased sales and a more successful business - however a lot of ecommerce shops also don’t know where to start or how to bring the data together to make sense.
At Baotris, this is what we specialize in. Check out our Case Studies page to learn more about how we’re helping Shopify ecommerce shops tap into their first party data to grow their business and expand their customer base.