Data-driven Marketing Is the Future
Posted on 02 Sep 2014
Data-driven Marketing Is the Future
By Dumi Maseko

I fully subscribe to the philosophy that says, ‘What does not grow dies, and what does not contribute is eliminated.’ Brands are quickly losing touch with their customers, clients and target markets, and most CMO’s don’t know why. The best excuse for Marketing Executives in the board room is ‘the economy’. When did marketers start being economists? This is because they are not willing to open their budgets to ‘Data-Driven Marketing’.

Let me start with the definition. Data-Driven Marketing is a retentions focused tactic using customer data, customer behaviour to determine the exact timing, approach, targeting and content of marketing campaigns. This means that marketers have an advantage of all this data to be smart with their content to their customers and deliver relevant, sustainable marketing campaigns. Data-Driven marketing brings about a new dimension which has never been part of marketers in the world. Data-Driven marketing, specifically big data requires marketers and their teams to collect, integrate and analyse data from external and internal sources, from market research and social media interactions to fine-tune the ad campaigns to remain relevant to their customers. This is something that is just not happening in South Africa. None of the top 20 best brands in South Africa are doing this right now. And if they are using data, they are not being innovative enough to remain relevant to the target market.

There is a saying in marketing circles that was made famous by John Wanamaker, ‘half the money I spend on advertising is wasted, the trouble is I don’t know which half’. There are many benefits which Data-Driven Marketing addresses, but I am only going to mention three of them.

Customer intelligence
This is a no-brainer for any brand that is serious about its customers. Twenty-nine percent of companies reported that their marketing departments have too little or no data on their customers. Data-Driven Marketing gives you insights into your customers, their buying patterns and most importantly, that your marketing reaches the right person. For instance, telecoms companies have data on their customers, but they never use it to remain relevant to their customers. You only need to look at the number porting stats released by the Number Porting Company NPC. It shows that customers are moving from the big operators and small operators are benefitting because they are more innovative with their packages. This is information that is publicly available, but it seems that most marketers of the ‘Big Two’ are ignoring it, or maybe the agencies advising them are doing some serious lip-service, or maybe hoping the problem will quietly solve itself. The ‘build it, they’ll come’ mentality is not serving them well, they have to use the data creatively to remain relevant to their customers.

Save Money
It seems that some companies are allergic to saving money. I am firm in my stance that with Data-Driven Marketing, the same results they are currently getting, can be achieved with half their current budget and with two-thirds of their current budget, between 5 and 15 percent further growth can be achieved, and every cent can be accounted for. And when CMO’s request a 20 percent increase in their marketing budget, the data is going to assist them to make their case that much stronger. I always tell marketers that Data-Driven Marketing will make money for the companies, if does not make money, it will certainly save them money.

Accountability
A friend of mine who is a fellow marketer said something very interesting. He said that there is no marketer who is a CEO of the top 50 companies in South Africa, because of accountability, or lack thereof. The COO knows exactly how much his sales team produced and the CFO is accountable to the figures and those figures are undisputed. And what is the CMO accountable to? Apparently nothing. COO’s and CFO’s are promoted to being CEO’s because they can account for their budgets. And the CMO refuses to embrace the very idea that will make him more respected in the boardroom. Marketers or even agencies don’t know what their role in the sales funnel. Marketers have no idea what is the cost of the customer acquisition, or at least what it took for them to make the customer sales ready. Ignoring data is the very reason why there is so little accountability in marketing departments in South Africa.

Now that I have defined Data-Driven Marketing and why is it important, let me reveal why I say it is the future. Customers are no longer just consumers, they have evolved to becoming ‘Prosumers’, which means that they no longer just buy what they are being fed. Prosumers research and design the best buying conditions for them. This type of a consumer needs good content and research show that because they know so much about the product that they also become ambassadors of the product or of the brand. Conventional marketing is simply out of touch with this kind of consumer or customer. This customer needs more than the content you advertise, they need to know how the product will benefit their lifestyle. In order to make this customer loyal to a particular brand, you need to know where they find their information and be able to influence the content they receive about your product.

Lisa Arthur wrote in Forbes magazine, ‘At its core, data-driven marketing centres on one thing and one thing only: propelling value by engaging customers more effectively.’ If Data-Driven Marketing’s primary objective is to propel value to customers more effectively, why isn’t Data-Driven Marketing practiced at every company. Data-Driven Marketing addresses these issues, you know that people like the content the brand posts on its blog. They take the suggestions of their customers to heart and engage with them.

When marketing departments come across this data, they know exactly the psychographics of their customers. They will know the timing and know how to segment their market, but most importantly creating meaningful customer engagements. Teradata stated on its website, ‘Today’s marketers know… data is everywhere. But it’s what you do with your consumer data that matters. Transactional events are no longer a sufficient means of cultivating long-lasting consumer relationships. What matters is creating interactions – relevant, meaningful consumer dialogues informed by data.’

Data-Driven Marketing is not an easy task, it requires collecting, analysing and collating data in a way that makes sense. But once marketing departments have this data, they will know exactly how to create sustainable value to the customers. To efficiently create value that goes beyond just making a sale, it is about creating long-lasting dialogues with customers. And the future of marketing clearly lies in Data-Driven Marketing. The future is now, because by the time big brands warm-up to the idea of Data-Driven Marketing, someone else will have the attention of their market and might be too late.

The beauty of Data-Driven Marketing is that once you know your customers intimately, there are marketing campaigns that are no longer relevant to your customers. Therefore, marketing departments will stop wasting their budgets on advertising that no longer leads their customers to buy. Marketing agencies will specialise in mastering customer trends and ensuring that they marry their creativity with the data from customers. Every CMO should take seriously an agency that says they can give them customer intelligence, save them money and help account for their marketing budget. They might just be Data-Marketers and might have insight to your future.