What is the importance of data in marketing?

Marketing has reached new heights since the inception of internet decades ago. Successful managers have utilized data available at their disposal to drive marketing strategies. And, Business-to-business managers have optimally utilized data in driving sales. It has been observed that the organizations which use data for market planning are more successful than the organizations which don’t rely on data.

Once data is available, the next step is to ensure that the organization has the right set of tools as well the right personnel working on it. Unless the employees in-charge don’t do proper data analysis, the data is of no use. It is just set of useless numbers. Organizations who have understood the importance of the data have seen improvement in sales as well as profits.

Now days, organizations are also utilizing maps to see the clusters of potential buyers in specific areas. More advance mapping system gives details of the spending power and other characteristics of buyers in those areas.

For example, United Way/Centraide Ottawa used location intelligence to segment their donors, etc. In 2012, United Way purchased its first subscription to ArcGIS desktop software for resource allocation, identify and build relationships with critical stakeholders, tell clients’ stories and encourage collaboration with other contributors to design a cohesive strategy for community success. Now they use Esri’s mapping tools and analysis services for planning, marketing, etc.

https://resources.esri.ca/news-and-updates/applying-the-element-of-where-to-social-change

There are various tools available for organizations to break down data and do analysis for targeting specific customers. This way leads are generated and can be handed over to the sales team for converting these leads to long term customers.

With the historical data of the organization, marketers can easily identify the buying behaviors’ and post buying behaviors’. This information is very important to frame correct promotion strategies to influence first time buyers. After the sale, the buyer’s behavior is also collected in terms of feedback, complaints, etc. to ensure appropriate after sales services are provided to existing as well as future buyers. This helps in retaining customers who if unsatisfied will move to competitor products.

The data helps in anticipating needs of buyers, understand their preferences and challenges.

This information helps the organization in below ways-
1. Easy segmentation of customers – Some customers have different preferences from others. Segmenting customers along different criteria will help in making common strategy addressing needs of particular set of customers.

2. Proper marketing budget utilization – The biggest challenge for marketing managers is to generate highest Rate-of-return by staying on budget assigned to them by the organization. With properly analyzed data, the marketers chart out proper plans which are focused and targeted, and within the marketing budget allotted.

3. Gives competitive advantage – After carefully analyzing customer’s needs and preferences, marketers are in a position to design products and services which fulfill customer’s needs. This gives competitive advantage to the organization. The competitor’s face challenges to lure an organization’s customers who are satisfied with that organization’s offerings.

4. More focused marketing campaigns – It is important to have personalized conversation targeting the pain areas and need areas of buyers. Data provides great insights on buyer behaviors which eventually help in forming promotion campaigns that excite potential buyers to try organizations offerings.

5. Product modifications – Changes to the products and offerings are made basis the feedback and complaints from existing customers. Also, surveys carried out before launch of the products gives enough data to work on for product changes.

Challenges with Data collection and use-
There are challenges in current times where customers are concerned about their privacy. The best way to stay away from legal problems is to gather data in a way that customers appreciate. It is always safe to comply with government regulations during the process of gathering data, and working on it like making phone calls, sending emails, mails, etc. An organization and its employees should comply with regulations that fall in the framework of customer data security. Regular training of employees, taking advice of consultants and employing staff members who can work in the legal team ensuring the organization is in compliance with the relevant regulations.