Big data is bigger than ever before, in terms of its volume, variety, and velocity—but it’s how you make use of this data that really counts. To beat their competitors and better serve their customers, organizations need to efficiently analyze their enterprise data for hidden trends and insights.
The 2019 report “Mind the Data Gap” found that 94 percent of B2B marketers agreed or strongly agreed that greater use of data and analytics was changing their approach to marketing campaigns. In particular, the financial industry is adopting data-driven marketing at a rapid pace. According to an Econsultancy survey, financial services companies rank data-driven marketing as the second most exciting digital technology opportunity to explore, just behind improving the customer experience.
But what is data-driven marketing exactly, and how can you implement data-driven marketing for financial services? We answer those questions and more below.
What is Data-Driven Marketing?
As the name suggests, data-driven marketing is an approach to marketing that makes data a priority in the decision-making process to target the right leads and customers.
The data used in data-driven marketing may be sourced from a number of sources. It may be information about the general population or prospective leads, or it may be data about your existing customers from your CRM (customer relationship management) software. However, all marketing data can generally be divided into one of the following four categories:
- Demographic: a customer’s statistical characteristics such as age, gender, race/ethnicity, marital status, household size, income and education levels, etc.
- Geographic: information about the customer’s location, potentially segmented by city, county, state, region, or country. Depending on the product or service, other geographic information (such as whether the customer lives in an urban or rural location, or a hot or cold climate) may also be relevant.
- Psychographic: a customer’s personality traits, values, lifestyle, hobbies, etc.
- Behavioral: a customer’s patterns of interaction with your business (e.g., customers who have already purchased from your business, or customers who recently visited your website).
Why is Data-Driven Marketing Important for Financial Services?
Data-driven marketing has several advantages for financial services companies, including:
- • Smarter marketing campaigns: With data-driven marketing, it’s much easier to segment your customer base and target the right populations for your marketing campaigns. Data-driven marketing gives you a holistic 360-degree view of the customer by capturing interactions across multiple channels so that you can understand which segments are most valuable or most receptive to your messaging.
- • More effective cross- and up-selling: Data-driven marketing can help you identify opportunities for cross-selling and up-selling with your existing customers, giving an extra boost to your revenues. For example, customers with an existing service such as a mortgage may be good targets for cross-selling opportunities such as a personal loan or an investment account.
- • Stronger personalization: 91 percent of consumers are more likely to purchase from brands that provide them with personalized offers and recommendations. Machine learning and artificial intelligence technologies can analyze your customers’ history and behavior and help identify the most appealing content, products, and services for them.
- • Better customer service: In addition to acquiring new customers, data-driven marketing can also help you offer better service to existing customers. By collecting data about each customer’s touchpoints and interactions with your business, you can better understand their goals and motivations, improving your customer retention rates.
How to Implement Data-Driven Marketing for Financial Services
The advantages of data-driven marketing are numerous—so how can financial services companies actually implement data-driven marketing? Below are a few suggestions:
- • Break down data silos: In many cases, businesses already have the information they need for data-driven marketing—they just don’t know it yet. Data silos occur when a single team or department intentionally or unintentionally isolates data from the rest of the organization. Breaking down data silos and collecting this information in a centralized, accessible location is the first step toward data-driven marketing.
- • Create buyer personas: “Buyer personas” are fictionalized descriptions of the different types of customers that you envision buying your products and services. Having these buyer personas in hand makes it easier to understand your audience’s background and thought processes, and tailor your content and marketing campaigns to the right people.
- • Implement data analytics: A strong data analytics tool is essential for data-driven marketing. You should be using an iterative analyze/test/repeat strategy: use the insights you glean through data analytics to develop customer-centric messaging, analyze the results of the campaign, and refine and adapt your marketing strategy accordingly.
Data-driven marketing is an essential tool for financial services companies to stand out in an ever-shifting business landscape. To learn more about sales and marketing strategies for financial services, check out the latest articles on our blog. You can also get in touch with our team today for a consultation about how we can help with your business needs and objectives.