Check out the newly published Mighty Guides eBook Data Disruption and my chapter on data-driven marketing.
Data has always played an important role in marketing. What has changed in recent years is the sheer volume of data now available from so many different sources.
If we were once challenged to see the forest through the trees, we’re now challenged to see the forest through the leaves.
“I look at data strategically, with the essential premise that the customer is the ultimate focus of interest.”
Here at Zenith, we primary sell our products through our network of retail partners. We do have a product website, but it is not a major source of our sales. In my role at Zenith Products Corp., I look at data strategically, with the essential premise that the customer is the ultimate focus of interest. With that in mind, I have a four-step approach to using data in customer marketing:
- Start small. For example, we often use Amazon Services (AMS) ads to test the effectiveness of promotional strategies. We will focus on a product or a phrase or an idea and watch how it performs. By doing so, we can create a test with a focused objective, and we can keep the cost of our tests very low. Amazon Webstore provides an excellent data environment in which to try something small at low cost and capture meaningful performance data around it.
- Test and learn. By keeping the test small and the cost low, we can try many different variations. For instance, I used AMS to test category ads, product ads, brand ads, ads based on search words, ads based on competitors, even ad placement that AMS recommended. The good thing about this method is that Amazon provides data that allow us to track ad performance directly to Amazon Webstore sales. In this way, we can identify ad strategies that perform well and those that are total duds. Failures are as important as successes. The best-performing ads returned $5 in sales for every $1 spent on marketing—a 500 percent return on investment (ROI) on marketing spend.
“In this way we can identify ad strategies that perform well and those that are total duds. Failures are as important as successes.”
- Build on success. Using the proof point of a 500 percent marketing ROI, I can then build that ad concept into a larger marketing strategy that involves product packaging, in-store promotions, and many other things. Then, I start looking at other kinds of performance data. For instance, if a store is running a promotion on a product, I pay close attention to the halo effect of that product on the sales of other products.
- Document your knowledge. It is incredibly important to document what you do. Documentation enables you to build a body of knowledge about what works and also to share that knowledge through your organization.
The power of this kind of data-driven marketing is that when you have data that prove your strategy, you can gain credibility and resources to do it again.
Key Lessons for Better Data-Driven Marketing
- When testing ideas, it is important to create a test that has a focused objective and to keep the cost of tests low.
- The power of data-driven marketing is that when you have data that prove your strategy, you can gain credibility and resources to do it again.
Greg Bonsib is an author of the new Mighty Guides Ebook Data Disruption.