A Data Driven Mindset Delivers Inbound Marketing Results
When I spoke recently at iSummit 2012 on data driven marketing, I knew the topic was hot. The truth is, this is not a new topic. But, during the past three years with the rise of interest in big data in social business, data driven marketing has taken on new meaning.
Three Marketing Eras
In the 1960s and 1970s, the creative era gave rise to some memorable ad campaigns such as Wendy’s “where’s the beef?” In the 1980s and 1990s marketers added direct marketing to their mix using database marketing tactics with a “1% mentality.” A 1% return produced a profit, even if it alienated 99% of their list. Today, the consumer has revolted. We live in the relevance era. Consumers expect brands to know more about them, and to message them relevantly. It’s relevance or die!
The Stakes are High
The potential consequence of delivering irrelevant messaging to our target customer is loss of the relationship with our customer. Recent survey data supports that consumers are willing to sever brand loyalty ties when consistently delivered irrelevant messaging.
Unfortunately, many brands are not yet getting this right. And, as a result brand defection is high, due mostly to delivery of irrelevant messaging. The truth is the customer is “mad as all-get-out and they’re not going to take it anymore!” And, that is because the customer is in control. All we have to do is tweet our dissatisfaction, or post it on a brand’s Facebook page, or post it on a forum and the brand’s customers see the complaints. We live in an open communication, digital world where the customer is in control.
Enter Data Driven Marketing
The way for marketers to increase their chance of winning and keeping customers in the digital age through inbound marketing is with a data driven marketing approach. And, it starts with the collection of data from customers.
Although, the data driven marketing tools have been available for decades, most brands have not adopted a data driven mindset yet. Until recently the data analysis tools were mostly limited to large organizations with large budgets. But, in recent years, small and midsize companies have affordable access to analytical tools, which levels the playing field. Essentially, a $10M company can steal market share from a $10B company with smart data driven marketing practices.
Data Driven Marketing Delivers Inbound Marketing Results
Data driven marketing can produce results all brands want; more revenue, customer retention and loyalty, and ROI on marketing expenditure. If more organizations practiced data driven marketing, the average tenure of a chief marketing executive could be more than 22 months. In fairness to the CMO though, it takes a village. IT must cooperate in allocation of resources to license, implement and support data analytical technology tools. Effective data driven marketing is inherently dependent on technology tools, supported by an analytical mindset.
Three Forces of Data Driven Marketing
The first one is economics. Consumers want the best bang for their dollar. They are less loyal to brands who don’t deliver the best bang. And, the C suite is scrutinizing every dollar of marketing spent.
The next one is intensifying competition. In the digital age it’s easier for competitors to make inroads in almost any industry. Oracle saw Salesforce go from a scrappy startup to a serious threat in CRM software. Google saw Facebook encroach on their turf within six short years. New marketing paradigms allow competitors to reach and engage consumers like never before. And, when a consumer is wowed (in a relevant way of course) she develops brand loyalty, provided the wow is backed up with a quality product.
The third force is advancing technology. The market for business analytics, marketing automation software and optimization is growing very rapidly. IBM alone has invested more than $20B in recent years in acquisitions to be well positioned to capitalize on a $200+ billion market. As technology continues to become available to marketers to reach their customers in relevant ways, businesses are allocating budget as they increasingly understand the need to use data driven marketing and analytics to micro target customers with relevant messaging.
Data Driven Marketing Wins New Direct Flight at TPA
Tampa International Airport’s (TPA) management team used a data driven approach to attract a new international route. Under a new management team, TPA executives poured over data knowing that the economic impact of direct routes is substantial – $154 million and 1,200 jobs. After pouring through data, TPA officials learned that 35% of guests in Pinellas county beaches rented cars in Orlando. That meant that people were flying into Orlando with an interest in visiting Florida west coast beaches. With a powerful buying rate in Tampa Bay, TPA officials decided to pitch their airport to Edelweiss, a popular Swiss airline with direct routes between Orlando and Zurich, Switzerland.
The pitch to Edelweiss was entirely based on data. TPA officials showed them that more 30 Tampa Bay companies do business in Switzerland and that 24 Swiss companies have subsidiaries in Tampa Bay, and that many European travelers fly to Orlando end up in Tamp Bay to visit the beaches.
The end result was that Edelweiss Airlines cancelled their Orlando to Zurich flight and instead launched their Tampa to Zurich flight.
Data Driven Marketing is Precision Marketing
In today’s hyper competitive digital world, organizations across all industries that use data driven marketing give themselves a fighting chance to excel. No brand is secure just on brand equity alone. Just look at the current state of Kodak and Research in Motion (Blackberry). Marketers who embrace data driven marketing give themselves the possibility of being relevant to their customers. And, at the end of the day, that is what your customers want most from you – relevance.
All the sources supporting the this blog post are available in my slide deck below. Additionally, I strongly recommend you pick up a copy of Precision Marketing for a deeper dive into data driven marketing and many more case studies.