How Consumer Data Drives Modern Marketing

Why Data is the Heart of Marketing

Consumer data is no longer a “nice to have.” It now serves as the cornerstone for marketing in the modern age. Nowadays, they don’t just trust their guts, intuition, or broad trends. They leverage data to better know their customers, fuel targeted campaigns, and remain agile amid stiff competition.

This is what the five-part series of blog posts aims to guide you through, the basics of how consumer data is leveraged in marketing, sharing insights into what data is, why it is helpful, when it is challenging, what it means to you (the reader) and the reader’s real-life world, and where is it all going. And whether you’re in marketing or an entrepreneur, knowing these things will be more important than ever in making smart decisions with a big impact.

Understanding Consumer Data

In fact, if you want to really use the data in your marketing efforts, the first step is to know what data you’re working with, and from where it is derived. Let’s break it down.

Types of Consumer Data

• Demographic Data: General information such as age, gender, income, and location that tells you who your customers are.

• Behavioral Data: Monitors what consumers do (visited website, clicked or not, purchased or not…)

• Psychographic Information: It represents customer preferences, hobbies, values, and beliefs, and helps determine why people make a purchase.

• Transactional Data: Transactional data will tell you how often your customers make purchases, how they pay for them, and the transaction sizes, revealing monetary behavior.

How Does Consumer Data Work?

• Web analytics on your site or e-shop

• Engagement on social media — likes, shares, and comments

• Responses from a survey and direct from customers

• CRM (Customer Relationship Management) systems

• Third-party data providers offer aggregated consumer information

When programmed on top of one another, organizations can have a comprehensive view of their audience and make it actionable.

Marketing Strategies Based on Data

With consumer data in hand, the question is what you do with it to enhance marketing efforts. Here’s how it plays out.

Segmented Targeting

The days of one-size-fits-all marketing are over. Using customer data, you can break down your audience into separate groups according to demographic characteristics, behavior, or psychographics. An athletic brand, for example, may develop separate campaigns for a young professional curious about home workouts versus a seasoned runner in the market for marathon gear.

Personalization

If one single benefit can be attributed to using consumer data, it is personalization. According to research, 80% of consumers are more likely to buy from companies that offer personalized experiences. Those may just be a few polite emails calling customers by name or suggesting a product based on their browsing history.

Marketing Automation

Leveraging the tools to automate tasks with information from consumers allows companies to create super-targeted campaigns with much less manual input necessary. For instance, data can be the source for abandoned cart emails, birthday discounts, or reminders about renewing your subscription.

Predictive Analytics

Predictive tools identify patterns in previous consumer data to predict future behavior. A typical use case? Anticipating the customers most likely to churn and launching targeted retention campaigns to retain them.

Advantages of Data-Driven Marketing

Differentiate Through Personalization

With countless digital brands facing off against one another, personalization is a competitive differentiator. Customers are made to feel appreciated and they’re understood, which in turn makes them want to be loyal for a long time.

Higher ROI

Being able to know exactly who you’re going after can help allocate resources better. Instead of spraying ad spend across everyone, accurate data points to the users who are most likely to make a purchase, resulting in greater ROI.

Better Customer Experiences

There’s nothing better than making sure your customers have a great experience at every step of the game! The insights you get can help with any number of common pain points — from polishing your UI on your website to building better post-purchase support systems.

The Pitfalls of Data-Driven Marketing

Privacy Concerns

Consumer data-fueled marketing is frequently scrutinized for potential privacy violations and ethical concerns. In the age of regulations like GDPR and CCPA, companies must be certain that they are fully compliant when it comes to the data that they are leveraging and storing.

Data Security

Holding sensitive customer data? You’re not just bolstering your marketing strategy; you’re also painting a bull’s-eye for cyberattacks. It is essential to ensure state-of-the-art data encryption and security protocols to maintain trust.

The Data Analysis Black Box

Data’s promise is enormous, but making sense of it all can be daunting. Big data is not just about tools, but also about people with specialized skills, including data science, analytics, and machine learning.

What Comes After Data in Marketing

Better AI and Machine Learning

AI will further develop targeting, predictive analytics, and create ultrapersonalized consumer journeys.

Cookie-less Tracking

With the elimination of third-party cookies by browsers, brands will be at an inflection point. You will see more investment in first-party data collection models such as email opt-ins and mobile applications.

Real-Time Insights

The real-time analysis of data will enable brands to tailor messaging in a matter of seconds. Whether updating social ads for a holiday rush or fixing pricing on-demand during a surprise spike in demand, real-time analysis is going to be key.

Here’s How to Realize the Full Capacity of Marketing with Data

No other time in history has consumer data had more power to create meaningful, engaging, and relevant marketing. Privacy and data security challenges can’t be ignored, but the rewards dwarf the challenges for forward-thinking marketers.

Today is the day for businesses to take a data-driven approach to lock in customer loyalty, fine-tune their campaigns, and be proactive in an ever more competitive space. If you want to make the most of consumer data but aren’t sure where to start, now is a great time to learn more about these tools and strategies.