How can data help improve the return on investment of my marketing budget?
As a CEO/CFO or CMO, at the moment there is quite possibly a high focus on budgets and ensuring that your business is operating as efficiently as possible, which means that there may also be renewed pressure to start cutting marketing budgets.
In times of economic downturn there is always a heightened focus on marketing budgets and ensuring that marketing is delivering a good return on investment. This is quite understandable, but nevertheless a painful time for Chief Marketing Officers, who have to demonstrate that their marketing is delivering results.
In this Blog we look at why data-driven marketing is essential and how you can use data to inform your marketing decisions and significantly increase your return on investment (ROI).
1. Understand your ideal customer – data can help you to understand who your target audience is, as well as gain a detailed understanding of their purchase behaviours, so you can target them more effectively.
2. Utilise the most effective channels for promotion – understand where you can reach your target audience when to target them, and how to get more of the same type of customers. Identifying the most cost-effective channels for engaging with your audience and at what times, will ensure you make the most of your marketing budget.
3. Personalise the experience to existing customers - once you have a customer on-board, utilise data to increase their spend and frequency of purchase. Use your data effectively to build stronger connections with them.
4. Build loyal customers – utilise your data to develop loyalty programmes, to increase customer lifetime value, improve retention and increase their propensity to recommend.
5. Increase customer engagement and gather feedback – data-driven marketing enables greater personalised content and an ability to get a quick view on product and brand trust, loyalty, and engagement.
6. Real-time metrics and decisions – rather than having to wait weeks to see if a marketing campaign is driving performance, digital data enables immediate results tracking, quick decisions and the ability to change campaigns to optimise performance. You will be able to see which elements of your marketing are working and what areas need improvement.
7. Quick test and learn and optimisation – With digital and data-based marketing you can utilise an element of risk-taking on perhaps new channels, prices, content, and offers, and be able to see quickly if things are working. You will also be able to see what channels work together to optimise conversion rates.
8. Monitor and continually improve your marketing ROI – using your data effectively leads to continuous improvement and learning to deliver a significant increase in your marketing return on investment.
In conclusion, using data to drive your marketing decisions can help you to improve the effectiveness of your marketing by targeting and optimising campaigns which can contribute to a higher ROI of your marketing.
By leveraging data, you can take a more strategic and informed approach to your marketing and see better results in terms of increased conversions, customer loyalty, frequency and value of spend, and therefore increasing overall ROI.
If you need support in developing data to utilise in marketing then please get in touch, or read our Blog on Why you should invest in a data strategy consultant to support you in developing your data-driven marketing.