Explore our Digital Marketing Strategy and Planning Toolkit

Data-driven marketing strategy

By 20 Jul, 2015
Big Data

Understand your marketing ROI and use the data to inform your data-driven marketing strategy

While the attraction of data-driven marketing isn’t in doubt, the challenge confronting businesses can be daunting.

According to the Q1 2014 Gleanster Research customer experience survey, about eight out of ten senior marketers believe their organisation could be doing a better job of using customer data to inform customer acquisition and retention strategies.

But with data-driven marketing involving so many working parts, the end goal can appear unobtainable. To create a data driven strategy, you first need to know how to establish an effective way to measure marketing ROI.

Data-driven measurement

The advent of data-driven marketing should ensure that organisations can not only identify the strategies and campaigns that are most likely to be successful, but also secure buy-in and investment for marketers by demonstrating the potential ROI of impending campaigns.

Put simply, if a marketing department is truly data-driven, the measurement of ROI should be at the fore.

However, a number of obstacles and errors can undermine the efforts to measure ROI of even those organisations that are data-centric. For instance:

  • Businesses may be unable to access the necessary data to accurately measure the ROI because data is held in silos.
  • Organisations may not collect all the right data from the channels (email, SMS, mobile, web, social media, print) and ensure comparability.
  • Companies may not analyse the collected data for sufficient insights.
  • Total marketing costs may not be included – i.e. the fully loaded cost.

And of course there is also the issue of data volume.

“Today’s digital marketing tracking capabilities generates a pool of data that’s readily available to companies, whereas traditional marketing mediums such as direct mail and print couldn’t be tracked so accurately simply because data wasn’t available or when it was it wasn’t entirely accurate,” explains Kate Cooper, CEO of Bloom Worldwide. “The main challenge with data driven marketing today is that there is a lot more data available – choosing the most important data to analyse and not wasting time on the unimportant metrics will bring benefits. Data overload can be very daunting.”

So what steps can marketers take to ensure that their data-driven efforts put ROI measurement at the core of their operations?

measure ROI

Set SMART (Specific, Measurable, Achievable, Realistic and Timely) objectives

Marc Michaels, director of behaviour and planning at DST, says: “Do you want the campaign to increase revenue & profitability, increase retention, or build brand awareness, brand equity and brand identity? The duration of the payback can greatly vary in each case so you need to ensure you have the right timeframe for your ROI measurement.”


Identify what will be measured and how, which involves defining experimental designs (testing) to ensure that all measures (e.g. a campaigns response rate) and dimensions (e.g. a respondent’s profile) are able to be analysed with the appropriate level of statistical confidence.

Erfan adds: “Before ROI can be measured in a multichannel integrated marketing environment, it is key to set out a full evaluation plan that will identify the relative contribution of marketing channels. It is also important to recognise this contribution both in the short-term and in the long-term – i.e. considering the life time value of a customer.

“It is important to make sure that the right data is collected on a ‘continuous, consistent, comprehensive and comparable’ (4Cs) basis (custom links, landing pages etc.) and re-attribution methodologies employed as necessary for proper comparison.”

Run a pilot/small test campaign

This will help marketing departments determine how campaign will play out before committing large investments.

Analyse and review

Michaels advises: “Fervently collect data and analyse to provide detailed insight on the campaign’s performance and the factors underlying this result, e.g. full media source analysis by response channel. Periodically collate into a holistic ‘story’, share and discuss the analysis findings with all relevant stakeholders.”


Change channels and calls-to-action for better performance, i.e. fix what is not working. “Evaluation will fully inform the optimisation of our activity to proactively and intelligently suggest improvements/redeployment of budget in the roll out in order to increase value for money and the payback from the marketing investment,” says Michaels.

Redeploy and scale up

Once you get the formula right for your marketing mix, you can start investing more money into the campaign. Adopt a continuous improvement ‘test and learn’ strategy that will slowly raise the bar in terms of the ROI effectiveness of your campaigns over time.

Michaels notes: “Once you understand the revenue-to-cost ratio, it's easier to start ranking marketing decisions. Should I advertise in press? Should I pay to advertise on Facebook? How does direct mail sit in the mix? Should I do a daily deal? The likely impact of all of these decisions can be assessed against your ROI hurdle.”

Company-wide goals

Another consideration that may further complicate ROI measurement for marketers is that with marketing increasingly sitting at the revenue table as co-owners of revenue, they also share the same goals and objectives as the company’s sales and service teams. This has implications for the way that marketers approach ROI, according to Erfan.

“It has become harder to measure marketing ROI, because it requires alignment with what sales defines as sales ready leads or what the services team believes determines a customer’s readiness for upsell. The ROI conversation in this context requires marketers – and their business counterparts – to have a consistent, single view into what describes a customer, and in particular what defines a high value customer.”

To help address this issue, it would be helpful for organisations to break down silos between the departments, bringing data from CRM, marketing automation, service and financial systems together in a single view, as well as agreeing on shared definitions, and aligning definitions of ROI as well. A further benefit of this, of course, is that this single trusted source of data can also be used to make strategic decisions on what types of customers to go after, where to focus your energies and what type of programmes to run.

Once ROI is defined a truly data driven marketing strategy can be established.

Key steps for developing a data-driven marketing strategy for you organisation.

Implement an organisation-wide data strategy

To be truly data-driven, data must be shared between business units, and for this to be successful, data needs to be managed consistently across the entire business. For this reason, businesses need to ensure that a strategic approach to data is adopted organisation-wide.

Restructure the organisation

For data-driven marketing to become a reality, different business units and departments must be able to collaborate and share data.

In particular, silos must be broken down between IT and marketing. IT is a vital partner for the marketing department, playing a crucial role in connecting the touchpoints throughout the business, and thereby supporting data collection and integration. Survey findings indicate that over three-quarters of marketers view the development of a strategic partnership with IT as a priority.

Create a cross-functional team

To support collaboration and break down silos, organisations should also develop a cross-functional team, including marketers and IT.

Forrester Research estimates that over 45% of Big Data deployments are for marketing – but that doesn’t mean that marketing should own marketing data and technology single-handedly: they must also recognise the skills IT brings to big data technology choices and deployment. It is therefore important for the CMO and CIO to work together, leverage different areas of expertise, pool resources and ensure the robust, scalable platforms are in place to deliver long-term value.

Integrate data

Marketers need to create a single, complete, actionable and flexible view of their customers and prospects. However, over time, most enterprises have invested in numerous marketing technologies that specialises in different disciplines, leading to siloed data and a lack of visibility of prospect behaviour, and a lack of a holistic understanding of customers.

To address this, enterprises will inevitably need to integrate customer data from disparate systems. The Global Data-Driven Marketing Survey indicates that businesses are making progress with this challenge, with 43% of executives reporting they have achieved fully integrated data across teams, compared with only 18% in 2013.

Leverage analytics

With the data integrated and augmented, businesses can utilise analytics to deliver actionable insights and guide decision-makers. And it is not just marketers that can benefit from this rigorous exercise – departments ranging from sales and customer service, to finance and purchasing, can all profit from greater insight into prospects and customers.

To drive results, identify high-priority customer personas (according to profitability or other goals), and then focusing analytics on those core personas and optimising for 3-5 of them.

Creating a data-driven marketing strategy is neither quick nor easy, and involves making changes across your organisation to be truly effective. However removing silos to better integrate departments so they can utilise data will deliver a marked improvement in results, and thus more than justify the effort involved.


This blog post has been tagged with:

Data Driven Marketing

Start the discussion on our community and social networks

Turbocharge your results with our

Digital marketing strategy and planning Toolkit

Get FREE marketing planning templates

Start your Digital Marketing Plan today with our Free membership.

  • FREE fast start guides to review your approach
  • FREE digital marketing plan templates
  • FREE alerts on the latest developments

Need help with your Digital Marketing?

Get more from your digital marketing with in-company or remote training and consultancy from Smart Insights

Get FREE marketing planning templates

Start your Digital Marketing Plan today with our Free membership.

  • FREE fast start guides to review your approach
  • FREE digital marketing plan templates
  • FREE alerts on the latest developments

Recommended Blog Posts

Popular Blog Posts