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Why Small Businesses Should Embrace Data-Driven Marketing
November 7, 2023

Understanding customer and client behavior patterns has always been important to small business owners. In the “old” days (pre-mall construction boom, circa mid 1960s), Main Street businesses drew customers from a relatively small geographic area. It was easy for business owners to know what their customers liked and disliked since many were their neighbors and friends.

The advent of first, the mall (drawing customers from a wider area) and then, the internet (attracting a global audience) makes it nearly impossible to personally know your customers.

That’s where data comes in.

Collecting and utilizing data about your customers and clients enables you to gain valuable insights into who your customers are, where they live, and their purchasing behaviors.

Although it may sound oxymoronic, using technology to do a deep dive on your customers’ actions, personalizes customer experiences, helping create more loyal customers and clients.

Q: What is data-driven marketing?

A: Data-driven marketing is, according to NG Data, the process marketers use to “glean insights and trends by analyzing company-generated or market data, and then translating these insights into actionable decisions informed by the numbers.”

Q: How does data-driven marketing work?

A: NG Data says to get the most from data-driven marketing, you need to collect information on all aspects of a customer’s engagement with you, from their demographics to industry metrics and specific customer interactions. You use the data to determine the best ways to market to these (or similar) customers. And, of course, the idea is to get the best ROI (return on investment) for your efforts.

Q: What are the advantages of using data-driven marketing?

A: Using actual data, whether your own or from your industry, helps you better understand who your customers are, what they buy (or don’t purchase), when they buy and even why they decide to do business with your company. According to NG Data, data-driven marketing explains how, “consumers engage with your marketing efforts,” enabling you to make more informed decisions when developing marketing campaigns.

The experts say deploying data-driven marketing reduces wasteful spending, because you’re giving customers what they want, based on their actual past engagement with your small business. It also helps you customize your marketing efforts to better reach your specific target markets.

Data-driven marketing is considered by many marketers to be more effective than other marketing methods, and often easier to implement.

Of course, you cannot reap the benefits of data-driven marketing unless you continually test your results against a successful control (a simple A/B test, or a split test with two variants, works well).

Q: What are the challenges of using data-driven marketing?

A: NG Data says by hyper-focusing on the data, you may sacrifice creativity and inventiveness. The company advises it’s better to blend creativity and “numbers-driven factors” and create integrated marketing strategies.

Q: Should small businesses use data-driven marketing?

A: Yes, since technology makes it relatively easy to collect the data you need to make more informed decisions. NG Data breaks it down into a series of steps:

  • Plan
  • Test
  • Analyze
  • Iterate
  • Deploy
  • Scale

You’ll first want to decide what your goals are. You can’t be successful if you haven’t defined what success looks like for your small business.

Q: Do I need special tools to effectively engage in data-driven marketing?

A: There are a lot of tools in the market, so it can be overwhelming to find the ones that work best for you. NG Data has compiled a list of 37 tools it considers “must-haves.” Many of the tools offer free options.

Learn how Deluxe can help your small business.

Conducting a Market Analysis
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Copyright © 2023 SCORE Association,

Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.

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