Maximizing your Return on Investment (ROI) is more important than ever for marketers in our increasingly global digital environment. The way to maximize ROI is through data-driven digital marketing. With data-driven digital marketing, you can use data to support your decision making on marketing strategies, measure and adjust for improved performance metrics, better identify and locate your customers, and increase revenues with less wasted marketing expense. The first consideration with maximizing your ROI is collecting data. Marketers can collect data on just about any imaginable customer characteristic from hobbies to buying behavior data. What marketers ultimately want to collect is a connection to the customer journey from all of the collected data. If collected and analyzed correctly, effective data collection reveals insights that are meaningful into how that customer engages with your brand. Utilizing data to better understand the customer wants and needs, but more importantly what customer pain points motivates decisions to buy, helps to create audience specific campaigns and messages that are relevant and hyper-targeted, so marketers can effectively communicate with each unique segment of their customer base. Pushing out countless generalizations and messages to customers is also in the past with digital marketing, which is more about hyper-targeting the customer to get the most from each ROI dollar.effective tactic that takes part in the data-driven marketing scope. Through A/B testing marketers can test two versions of either an advertisement, email or landing page to compare which version is best. A/B testing is a simple and very effective way to improve a marketing campaign through iterations to make it more engaging and boosts conversion rates. When an eCommerce brand for example sends out emails to customers, they could A/B test the subject title or their promotional offer and measure how that change affects their conversion and open rates. This iterative approach allows for continuous testing and adapting in a manner that makes it very easy to guarantee every campaign is optimized for improved performance and return on investment. Another approach to analyzing and improving ROI is through prediction analytics. Prediction analytics is the amalgamation of machine learning algorithms that predict future behaviour.For instance, AI powered tools help marketers to find customers with a likelihood (compared to other customers) of making a future purchase, as well as the when and the what of products. Mindset is important in marketing, and once marketers understand customer actions, they can make sure they deliver the right message to the right customer group at the right time. You could think of it as the increase in likelihood to convert. Take someone who consistently looks at athletic shoes without buying them, predictive analytics may capture a behavioral response and alert marketers to remit a proactive personalized offer, or some discount or newly listed products which is all designed to maintain the customer in active consideration and move them to conversion. Data can also provide real time marketing decision making, ensuring they can maximize ROI. Rather than waiting until the campaign is complete to know how effective it was; marketers could measure in real time, using KPIs such as click through rate (CTR), conversion rates, or customer acquisition cost (CAC). This should allow marketers to change the marketing campaign immediately, this could involve reallocating a media budget to another channel, changing ad copy or making changes to their targeting. Marketers’ ability to make changes in real time, which surely minimizes wasted marketing efforts.
In closing, it’s important for data-driven marketers to consider lifetime customer value (LCV) so that they can generate bigger ROI versus just one sale. Knowing how long and how much your existing customer engages with your company and purchases from you, your business can ascertain how to try to retain customers and convert them into repeat business. If your business can retain customers, customers will spend more over time for your business with individual offer specials, loyalty programs, or exclusive content. Measuring predictable ROI and revenue through lifetime customer value with those strategies alone, can actually alter the trajectory of revenue in a big way. To summarize, data-driven digital marketing is not just a fad, and should be incorporated and executed as a part of an overall ROI maximizing strategy. The primary opportunity for data-driven marketers is using customer data to construct more engaging, better targeted and engaging campaigns, that will produce conversions, and optimize performance while campaigns are running, in turn bettering revenue. The additional tools and systems used to make data-driven marketing successful are predictive analytics, A/B testing, and automation technology for better and faster campaigns that maximize ROI. If you predict changes to the data landscape to come, position your business to data-driven marketing, and you will be ahead of all competition.
