An In-Depth Guide to Data-Driven Marketing

Data was once reserved for analysts and number crunchers. And while it's still a critical tool for these professionals, just about anyone operating or managing a business needs to tap into it to make informed decisions that drive success.

This is true even if you work on the more creative side of the business, like advertising and marketing. While intuition and art are still very much in play when you're crafting campaigns or brainstorming ideas, integrating data can provide the clarity and direction you need to maximize your impact and reach.

In this guide, we'll dive into the ins and outs of data-driven marketing. You'll learn the different types of marketing data, how to put all the info to good use, and examples of brands that are effectively leveraging marketing data to engage customers and grow their business. 

Let's get started. 

What is data-driven marketing?

Data-driven marketing is the strategic approach of leveraging customer data and analytics to inform and optimize marketing efforts. Data-driven marketing consists of the tools, systems, and actions you implement to collect, understand, and use customer data.

With data-driven marketing, you can tailor your campaigns, improve targeting, and ultimately achieve more effective and personalized marketing outcomes.

Having the right data also enables you to measure your marketing efforts and demonstrate ROI to the right stakeholders—whether that's your company's leadership or teams in other departments. 

As Rory Moss, Marsello's Chief Revenue Officer, says, "If you can actually measure it down to your marketing dollar, it really helps showcase your marketing efforts as a valuable business asset rather than simply something your business should be doing."

Benefits of data-driven marketing

Every marketer should rely on data where possible. When actual facts and figures back your marketing efforts, you minimize risks and maximize the potential for success. Let's explore some of the key benefits of leveraging marketing data in your business.

Smarter marketing decisions

How are your marketing campaigns doing? Are you reaching the right audience? How do your customers feel about your current campaigns? You can only answer these questions if you have the data on hand. Data gives you a clear picture of how your marketing efforts are performing and who your audience truly is. 

This deeper understanding means you won't have to rely on guesswork when executing your activities. You can make smart and informed decisions on every marketing campaign, and ultimately drive success.

Increased sales

More effective marketing leads to more sales. Data is what allows you to segment customers, personalize your messaging, and identify the right marketing channels. All of that can result in more impactful campaigns that yield higher engagement and conversion rates. 

Leveraging data also allows you to identify your most profitable customer segments and tailor your offerings to meet their needs. When you understand shoppers' purchasing patterns, you can create targeted promotions, leading to increased sales and higher revenue for your business.

Increased customer retention

Data-driven insights help you understand what keeps customers coming back. By analyzing customer satisfaction, purchase history, and feedback, you can identify trends and take proactive steps to enhance loyalty. This not only improves retention rates but also boosts customer lifetime value, ensuring long-term success for your business.

Higher marketing ROI

With data at the core of your marketing efforts, you can track the performance of every campaign and measure the return on investment (ROI). You'll be able to figure out where your marketing dollars are going and which activities yield the best results. 

Remember that marketing doesn't come cheap, so having data on what works allows you to allocate resources more effectively and find the right mix of channels to invest in. 

"Personally, I find that you're better off with your retail or hospitality marketing by focusing and investing in markets that currently work for your specific customer profiles while still investing and testing in new ones," says Rory.

He adds that improving your ROI and focusing on high-yield channels leads to a more robust database—something that pays dividends when leveraged properly.

"Your database is a real business asset. All business owners should view an email address as an opportunity for a sale. On average, an email address is worth around $105 based on the life cycle of an email. How many times can you send it, how many times a customer receives it, and what is the average transaction value resulting from it? This is based on survey analysis by Experian Marketing Services using CRM data and Klaviyo transaction volume."

Lower costs

When you spend your marketing dollars wisely, you reduce unnecessary expenses and optimize your budget allocation, which naturally leads to lower costs. It also means you can reinvest those savings into more impactful initiatives or expand your marketing efforts without increasing your overall budget.

And remember what we said about customer retention? Keeping customers happy through smart, data-driven efforts can lower churn costs and acquisition expenses. 
 

Types of customer marketing data

The data you use in your marketing efforts can come in different forms. Here are some of the types of data to consider. 

Demographic data

Demographic data provides insights into your customers' basic characteristics—e.g., their age, gender, income, educational level, etc. It gives you a very straightforward way to view and segment your customers, allowing you to craft more targeted and relevant marketing messages that resonate with specific groups.

How to collect demographic data:

• Surveys and registration forms: Ask customers to provide demographic information when they sign up for newsletters, accounts, or loyalty programs.
• Social media analytics: Use tools like Facebook Insights or LinkedIn Analytics to gather demographic data on your audience.
• Customer profiles: Compile data from various touchpoints, such as CRM systems, to build comprehensive customer profiles.
  
  

Transactional

Transactional data tracks your customers' purchase history, including what they bought, when they bought it, and how much they spent. This data is invaluable for understanding customer preferences and identifying trends in buying behavior. By analyzing transactional data, you can predict future purchases, create targeted promotions, and optimize pricing strategies to drive sales.

How to collect transactional data:

• Point-of-sale (POS) systems: Record transactions directly at the time of purchase, capturing details like items bought, prices, and transaction dates.
• Ecommerce platforms: Track online purchases through your website or third-party ecommerce systems, collecting data on order history and customer spending.
• Loyalty programs: Monitor the purchase behavior of loyalty program members, including frequency of purchases and preferred products. Pro tip: A solution like Marsello does this for you automatically.
  
  

Behavioral

Behavioral data captures how customers interact with your brand across various touchpoints, such as website visits, email opens, and social media engagement. This data helps you understand the customer journey and identify patterns in behavior that can inform your marketing strategies.

How to collect behavioral data:

• Website analytics: Use tools like Google Analytics to track user behavior on your site, including page views, click-through rates, and time spent on pages.
• Email marketing platforms: Analyze open rates, click rates, and engagement metrics from email campaigns to understand how customers interact with your communications.
• Social media monitoring: Track likes, shares, comments, and other interactions across social media platforms to gauge customer engagement with your brand.
  
  

Attitudinal 

Attitudinal data reflects customers' opinions, beliefs, and feelings about your brand, products, and services. It answers questions like how they feel about your brand and what they think about your offerings. Understanding your customers' attitudes allows you to address their concerns, build stronger relationships, and enhance brand loyalty. When you incorporate attitudinal data into your marketing efforts, you can ensure that your messaging aligns with your customers' values and expectations.

How to collect attitudinal data:

• Customer surveys: Conduct surveys using tools like Marsello's feedback feature, which enables you to gather feedback on customer satisfaction, brand perception, and product opinions.
• Online reviews and ratings: Monitor review sites like Yelp, Google Reviews, and product review sections on ecommerce platforms to understand customer sentiments.
• Social listening tools: Use tools like Brandwatch or Hootsuite to track mentions and conversations about your brand across social media, identifying common themes and sentiments.
  
  

First party data vs. second party vs. third party data

You can also view data through the lens of how it was acquired or where it came from. This is where the notion of first, second, and third party data comes into play. 

Let's break these data types down:

First party data

First party data is the information you collect directly from customers through your own channels. This data is very reliable because it comes from direct interactions with your audience. Since you own this data, you have complete control over how it's used and can tailor your marketing strategies accordingly.

• Examples:
  • Purchase history from your ecommerce platform
  • Transaction data from your POS system
  • Customer feedback from surveys and reviews
  • Data from loyalty programs
    
    

Second party data

Second party data is someone else's first party data that you can access through a partnership or data-sharing agreement. This data is often more targeted than third party data because it comes from a trusted source that has a direct relationship with their audience. It's useful for expanding your reach while still maintaining a level of accuracy and relevance.

• Examples:
  • Data shared from a strategic partner's customer base
  • Audience data acquired through a co-marketing campaign
  • Insights from another company's social media following
    
    

Third-party data

Third party data is collected by entities with no direct relationship with the consumers it describes. This data is often aggregated from various sources and sold to businesses to enhance their marketing efforts. While it can help you reach a broader audience, third party data is less precise and may raise privacy concerns.

• Examples:
  • Data purchased from a data broker or aggregator
  • Information collected through cookies across multiple websites
  • Audience demographics from a third-party analytics provider
    
    

Which data type should you rely on?

As you may have guessed, first party data is the most reliable form of data, because it's information you've gathered directly from customers.

Unlike second and third party data, first party data is a lot cleaner; plus, you have more control over the information. 

It's also worth noting that with data privacy laws like GDPR and the California Consumer Privacy Act (CCPA), consumers are becoming wary of being tracked by apps and websites. Your customers are increasingly demanding greater transparency and control over their personal information. 

As such, if you want to build trust and stay compliant with evolving regulations, it's best to rely on first party data.

Note that for the remainder of this guide, we will heavily focus on how to collect first party data and put it to good use. 

How to collect customer data

Now that we've covered the fundamentals of marketing data, let's discuss the action steps you can take to gather the information you need effectively. 

Have the right tools in place 

The first step to collecting marketing data is to have the right tools. Depending on your marketing tech stack, these can include:

POS system

Your point of sale (POS) system is essential for processing transactions and gathering valuable customer data in your brick and mortar locations. It captures detailed info about sales, customer preferences, and inventory, making it a critical component of your marketing data strategy. 

• Types of data the tool can collect:
  • Transactional data (items purchased, total amount, payment method)
  • Customer profiles (loyalty card usage, purchase frequency)
  • Sales trends (best-selling products, peak buying times)
  • Inventory data (top suppliers, product categories)
    
    

Ecommerce platform

If you have an online store, your ecommerce platform is the backbone of your operations. It provides the infrastructure you need to manage transactions and customer interactions. Your ecommerce platform also collects a wealth of data that can help you understand your shoppers' online shopping behaviors, preferences, and buying patterns. 

Examples:

• Order details (products purchased, order value, payment method)
• Browsing history (pages visited, time spent on site)
• Customer segmentation (repeat vs. new customers, product preferences)
  
  

Marketing automation system

A marketing automation system like Marsello streamlines and automates various marketing tasks—including email marketing, SMS marketing, loyalty program, feedback, and more. It collects and analyzes data from customer interactions, so you can deliver personalized and timely messages based on user behavior and preferences. 
 

• Types of data the tool can collect:
  • Behavioral data (message opens, clicks, website visits)
  • Automated responses based on triggers (abandoned cart emails, birthday offers)
  • Customer segmentation data
  • Campaign performance data
    
    

Web analytics

Web analytics tools like Google Analytics are critical for understanding how customers interact with your website. These tools track a wide range of data points, from page views to conversion rates, providing you with insights into customer behavior and the effectiveness of your online marketing strategies. Analyzing this data lets you optimize your website's performance and improve user experience.

• Types of data the tool can collect:
  • Behavioral data (page views, bounce rates, session duration)
  • Traffic sources (organic search, referrals, direct visits)
  • Conversion data (goal completions, ecommerce transactions)
  • Audience demographics
    
    

Connect your systems

Already have your tech stack in place? The next step is to ensure its various components can "talk" to each other. Doing so makes data analysis much easier, and you can get the full picture of your customer's journey. 

Rory says it best:

"For merchants, this means ensuring that online systems talk to their point of sale and connect seamlessly into their marketing stack through a better centralized system. Ensuring these technologies all talk to each other helps you gather information about your customers, their purchase behaviors, what they're buying, and what they're not buying but you'd like them to buy. Many people undervalue how important that information is to their business."

The good news is that connecting your marketing technologies is entirely doable, thanks to integrations and platform APIs. 

As Rory points out, "It should be relatively easy nowadays thanks to cloud technologies, and there are integration services, native or third-party solutions, to help bridge that gap."

Comply with data laws

With great data comes great responsibility. You don't want to mess around with consumer privacy, so be sure to responsibly handle any customer information that comes your way. 

"You want to comply with all data laws in your region, ensuring customers consent to provide information through appropriate data usage and laws," advises Rory. "Once all systems are talking to each other, understand what your data means. What is a marketing subscriber, and how did they subscribe to your platform? Can you showcase that? That's important at every data level."

The specific privacy laws you need to comply with depend on where your business and customers are located, but the list below should give you a good starting point.

General Data Protection Regulation (GDPR): Applies to businesses operating in the European Union or processing the data of EU citizens, requiring explicit consent for data collection and the right for individuals to access and delete their data.

California Consumer Privacy Act (CCPA): Grants California residents the right to know what personal data is being collected about them and the ability to request deletion of their data.

Personal Information Protection and Electronic Documents Act (PIPEDA): A Canadian law that governs how businesses collect, use, and disclose personal information in the course of commercial activities.

Children's Online Privacy Protection Act (COPPA): Imposes certain requirements on operators of websites or online services directed to children under 13 years of age in the U.S., including the need to obtain verifiable parental consent.

Brazilian General Data Protection Law (LGPD): Governs the processing of personal data in Brazil, similar to GDPR, with provisions for data subject rights and the obligations of data controllers.

ePrivacy Directive (EU Cookie Law): Requires websites to obtain consent from visitors to store or retrieve any information on a computer, smartphone, or tablet, often related to the use of cookies.

Putting marketing data to good use

You have the marketing data; now it's time to use it. Here are some ways you can leverage the information you have about your customers.

Segment and personalize

One of the best ways to tap into data is to segment your customers with it. Use the data to slice and dice your customer list so you can market to them more effectively. Consider the following:

Demographics. Categorize shoppers based on essential characteristics such as age, gender, income, education, and location. For example, you might promote different products to younger customers versus older ones or customize your messaging based on where they're located. 

Purchase history. Analyzing the products they've bought or their average order value allows you to create relevant offers and product recommendations. For example, if a customer frequently purchases high-end skincare products, you could recommend complementary items like luxury serums or exclusive skincare bundles.

RFM segmentation. RFM segmentation categorizes customers based on their Recency, Frequency, and Monetary value of purchases. This segmentation method (which Marsello automatically does for you) helps you identify your most valuable customers and those at risk of jumping ship. 

By focusing on these segments, you can tailor your marketing efforts—such as re-engagement campaigns for lapsed customers or exclusive offers for VIPs—to maximize customer lifetime value and improve retention rates.

Inform current and future marketing decisions

Another way to leverage data is to make smarter marketing decisions. The more you collect data, the more insights you'll gain into what works and what doesn't. You'll be able to determine which channels are worth investing in, what types of promotions work best, and whether certain marketing activities are profitable. 

You can use all that info to refine your marketing efforts. Let's say you notice that your weekend email campaigns consistently get more clicks than your weekday ones. You can start scheduling more important sends on Saturdays and Sundays to maximize engagement.

Or maybe you run a few different promotions and see that your buy-one-get-one-free offer outperforms the others by a mile. You can use this insight to plan similar deals in the future, knowing they'll likely drive more sales. 

Examples of data-driven marketing

Curious to see data-driven marketing in action? Here are some real-life marketing examples to inspire you. 

Data-backed marketing from HobbyTech Toys

HobbyTech Toys effectively utilized customer data to inform its marketing calendar and craft highly targeted and timely campaigns.

"We have a marketing calendar with targeted campaigns daily. We also run event-based campaigns for holidays like Mother's Day, Father's Day, and Black Friday. Each campaign is heavily targeted based on customer data," explains owner Jordan Hepburn. 

"For example, we send Mother's Day emails to males, targeting products that our female customers buy. Seasonal campaigns also promote relevant products based on the time of year. Data segmentation makes planning and strategizing easier."

Finnleys Boosts Sales with Data

Finnleys, a family-owned fashion boutique in Nashville, has successfully harnessed the power of marketing data to drive significant growth. How much growth, exactly? So far, the company has increased repeat purchase rate by 27.2% compared to the previous year with the help of smart marketing initiatives.  

Creative Specialist Carlie Huss credits this success to the company's strategic use of customer data, which allows the team to target specific audience segments more effectively. 

With the help of Marsello's tools, Finnleys sends 4-6 segmented email campaigns per week tailored to key customer groups: 

• Locals
• Trendy out-of-towners
• Broadway tourists
  
  

This targeted approach has boosted online traffic and sales, proving that personalized marketing drives results. 

Not only that, Finnleys utilizes Marsello's Heartland POS integration to gather essential customer data, including emails and phone numbers that the team matches with Facebook and Instagram profiles.

Using Marsello's Meta audience sync feature, Finnleys can reach a highly specific audience. "It was all in Marsello, and I used it for targeting purposes and everything," explains Carlie. This means Finnleys ads are seen by the most relevant customers, leading to better engagement and higher conversion rates. "It has made it super seamless."

Bakers Delight boosts sales with the help of loyalty program data

Bakers Delight uses loyalty program data to find sales and customer engagement opportunities. The team analyzes visit frequency, among other metrics, to encourage customers to visit more often, which is especially important given the brand's premium market position.

For instance, Bakers Delight utilizes Marsello's double points campaigns to increase sales during slower afternoon periods. The company has also seen positive results with text message campaigns and plans to expand its SMS strategy to accelerate customer return rates.

"Marsello offered us that one-stop solution, which was great. We had email marketing, we had loyalty, we were able to track everything we needed," says Karen at Bakers Delight. 

Bringing it all together

Between an increasingly competitive consumer market and more stringent privacy laws, a marketing data strategy is more important than ever. Having tools for gathering and analyzing data can help you better understand your customers and keep them coming back. 

The good news? Platforms like Marsello make data-driven marketing easy through features like marketing automation, loyalty, analytics, and more. Plus, our integrations with leading POS, ecommerce, and marketing tools allow you to keep your tech stack in sync and have a central view of all things customer data. 

Want to learn more? Take a demo or free trial of Marsello and discover why thousands of businesses around the globe choose our platform to power their data-driven marketing initiatives.