From Guesswork to Precision: The Benefits of Data-Driven Decision Making in Marketing
So far, my articles have touched on the basics of outcome-based marketing (OBM) and how an OBM strategy can support verticals across various industries.
Now, I’d like to zero in on some of the core aspects of a successful marketing strategy. At Perform[cb], we’re big proponents of data-driven decision making in marketing, as this approach allows us to prioritize metrics, analytics, and data to help brands make more informed and strategic decisions!
How Data-Driven Decision Making (DDDM) can Help Improve ROI
One of the major benefits of data-driven decision making (also known by its acronym, DDDM) in marketing is its ability to measure how campaigns are performing. By analyzing tangible KPIs like eCPA (effective cost per acquisition), ROAS (return on ad spend), and CLV (customer lifetime value), brands can use this data to understand which strategies are and aren’t working effectively. Here’s a quick example: if your ad receives a lot of clicks and results in few transactions, then you will have higher eCPA, versus an ad that potentially drives fewer clicks, but more transactions.
Of course, there are many more factors that need to be considered in a DDDM marketing approach. Before anything else, it’s important to first identify the data that’s most relevant to your desired outcome – be it sales, sign-ups, downloads, etc. After that’s been identified, make sure you’ve collected and organized the necessary information, which might involve data visualization tools that will help to present it in a more clear and purposeful way. From here, the data can be analyzed using statistical techniques or even machine learning algorithms in order to identify patterns, predict future trends, or create customer segments.
So with all this in mind, it’s easy to understand why DDDM marketing can lead to more accurate attribution models (i.e. how the credit for conversions is assigned to touchpoints within the conversion path), as well as more comprehensive ROI reporting. And to take it one step further, when applied to an outcome-based marketing strategy, brands can take advantage of marketplaces that are already enriched with insightful reporting about the consumer journey, revenue generated by source and channel, and more. This not only allows marketers to understand the ROI generated on a daily basis by their outcome-based campaigns, but also allows for the creation of optimization loops.
This actually brings me to my next point:
Personalizing the Buyer Journey
The customer experience is arguably the most important part of a marketing strategy, especially since customer demands and expectations for the buyer journey are continuing to grow. As such, brands need to be thinking of ways to personalize the buyer journey. This can include messaging, discounts, and recommendations that are specific to the audience’s interests and previous purchases.
This is why it’s so important to leverage a data-driven approach, as this will allow marketers to gain more visibility into which channels are working, where the target audience spends their time, and other insightful behaviors. Making optimizations to your strategy based on these insights can then enable you to develop a more personalized, memorable experience for the customer, increasing the chances of achieving your outcomes.
And remember, this doesn’t have to be done manually! AI and machine learning tools like predictive analytics, which use ML to learn and analyze customer data, are extremely valuable tools, especially when dealing with massive datasets. Our recommendation? Look for solution providers that can offer detailed audience segmentation based on number of values, such as traffic channel, device type, day of the week, and geographic location. This can help to achieve more qualified leads, buyers, and opportunities for high CLV.
DDDM and OBM partners—a match made in heaven
With more and more data accessible to us these days, this creates a more urgent need for data literacy. But for companies that are not already data-driven in their processes, making this shift can be a massive, time-consuming, and expensive undertaking—in fact, a Tableau study from 2021 showed that while 85% of businesses wanted to be data-driven, only 37% have been successful.
This is why we recommend turning to OBM partners. Partnering with experts that can offer granular reporting, actionable insights, and the technology to attribute detailed conversion and perform optimizations for massive scale can help brands to better understand the consumer journey, as well as the ROI generated on a daily basis—all without breaking the bank, since you’d only be paying once the desired outcome is achieved.
At the end of the day, taking a data-driven approach will give you more clarity, visibility, and control over your marketing strategy than the traditional trial-and-error method, which in turn helps save valuable time and resources.
If you love this idea but aren’t sure how to get started, don’t hesitate to reach out to our experts at Perform[cb], or reach out to me in a DM.
Be sure to follow along with my updates for more insights on outcome-based marketing!