Data Driven Marketing Ebook

DATA-DRIVEN
MARKETING
How to use data correctly and drive growth
50 YEARS AGO
2 YEARS AGO
TODAY
Data-Driven Marketing How to use data correctly and drive growth
Table of Contents
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1.
Why Data-Driven Marketing
2.
The Basics of Data-Driven Marketing

and the Customer Journey
3.
How to Drive Growth
4.
How to Optimize the Customer Journey
5.
Results: Connecting the Dots Between

Strategic Goals, Tactics and Attribution
6.
The Road to Data-Driven Marketing
7.
Conclusion
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Why Data-Driven Marketing

Todays marketing has shifted from being a discipline close to
communications, to a discipline incorporating more scientific, technical
and strategic responsibilities. Marketing professionals are tasked with
quantifying, executing, measuring and expanding a growth strategy
based on customer-centric approaches and data-driven decisions. A
CMO or VP of marketing is no longer looking for a shotgun model
spending money to broadcast a message, converting a fraction of the
impressions, then re-investing profits into further broadcasting. The
new model involves technological innovation combined with targeted
spending and executed to maximize precision and drive growth.
Marketing has experienced a fundamental shift recently. Techniques

and thinking that worked for 50 years have grown stale, with the lone
surviving tenet: the customer is always right. Business success is now
directly related to how closely we listen to the customer.
The American Marketing Association defines marketing as:
the activity, set of institutions, and processes for creating,

communicating, delivering and exchanging offerings that have
value for customers, clients, partners and society at large *
For organizations to succeed in a competitive landscape,

they need to employ data-driven marketing. Only with
data can they achieve organizational transformation in
technologically advanced, closely integrated, zero-dollarwaste systems where the only true North is growth and
customer success.
However, this traditional definition no longer works. You can blast

your products value message across the Internet all day long, but
customers just dont buy that way anymore.
Heres an alternative definition to consider.
Marketing is a strategic discipline that uses closely

integrated technology to connect with existing and potential
customers, to drive conversation about a product or a service,
better understand their needs, learn their behavior and
present meaningful answers to their requirements.
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Customer Accountability
Businesses are at the beginning of this journey right now, with
customer demand pushing them in the right direction. Customers and
the competitive landscape demands truly optimized and personal
experiences; however, processes and even business philosophies
now need to catch up. Most areas of strategic importance are still not
being connected together adequately to enable decision making and
resource allocation to be based on data-driven insights.
Each organization can benefit from transparency in goal-centric

metrics, and those metrics need to have a very meaningful
standardized tie-in with the marketing and sales process.
51 percent claim lack of data sharing within their own

organizations is a barrier to effectively measuring ROI.*
39 percent say they cannot turn their data into an
actionable insight.
We all have data in some shape and form, and certainly in great
volume. But the increasing size and variety of sources make it difficult
to analyze and derive simple conclusions. Marketers still believe data
is not successfully and fully utilized in automation, marketing process
and decision making. As a result, decisions are still based largely on
opinions. Even mature marketing organizations struggle to understand
their customers journey and what steps influence it in what ways.
Table of Contents
Even large datasets fail to make meaningful connections to

desired outcomes in a well-connected 360-degree view, taking
into account multiple variables affecting volume, probability,
average cost and revenue.
The sheer volume of accumulated data simply doesnt fit the
old spreadsheet model anymore. Insights are based on much
larger datasets and discover more complex patterns requiring
visualization, validation and process integration.
Research indicates 91 percent of senior corporate

marketers believe successful brands use customer data
to drive marketing decisions, yet 39 percent say their
own companys data is collected too infrequently.
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The reason for this is twofold:
The solution is simple but not easy: data analysis based on business
goals needs to be embedded in each and every organizational
process, so insights can automatically drive action, leading to improved
metrics. The redefined purpose of data-driven marketing is to allow
organizations to focus and refine each step of their customers journey
through meaningful conversations, carefully measured interactions and
timely, strategic and serendipitous intervention.
Challenges for Data-Driven Marketers

Have you ever heard the phrase, Our CFO is very data-driven? Of
course not. For someone in finance, this is an absolute given. Numbers
and data are the sole basis of all financial operations. The organization
would not survive a month if every financial report, projection and
key performance indicator (KPI) were not executed with the highest
degree of precision, based on accurate and risk-averse models. This
expectation is now extending to the marketing organization.
The quest for attribution: Every activity needs to connect closely

to revenue generation. Further, there needs to be a specific model
to explain any volatility or trend, so it can be influenced in an optimal
direction.
The quest for marketing budgets: The question of revenue
attribution can be political. Budgets are often redistributed as a
company gains a better understanding of channel interplay, leaving
CMOs struggling to justify hiring, budgets and spending, without
providing a clear sense of impact.
The quest for a customer journey: Understanding the customer
journey is a true guiding point, but its also complex. Every customer
takes a separate path, so journey data is diverse. Sophisticated models
can not only detect structure, trends and patterns in the customer
journey but translate them into actionable terms.
The quest for centralized customer data: The era of siloed,
unintegrated systems is over. Businesses now need a complete picture
of all customer interactions: both on and offline, as well as those
managed across diverse systems such as WCM, CRM, ERP and more.
Marketing and business executives have become strategically and very

closely connected to growth. Their only true strategic objective is to
maintain growth, and this objective relies on sophisticated technology
and data-savvy teams to understand customer needs and growth
drivers. Combine this expectation with the modern-day plague of
impatience, and marketers often have less than a year to complete
very challenging journeys.
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The quest for true ROI and ROI optimization: The Big Data
space has provided us with broad technological confusion as well as
a few specific answers to the most basic questions such as, how do I
optimize ROI on an ongoing basis?
The quest for omni-channel: The growing number of channels
will remain a primary driver for shifting to a data-centric philosophy
entirely. Being omni-channel in itself means having the full 360-degree
view of the customer data, integrated systems and unified processes.
Essentially, omni-channel is a solution that mandates a data-driven
marketing philosophy.
How to Use This eBook

The quest for real-time marketing: Individually customized realtime customer communication remains a prized goal. To succeed,
businesses must mature, not only with technology, but with content
and process, as well.
The book is divided in the following sections:

Basics of Data-Driven Marketing and
the Customer Journey:
How are goals, insights and process connected to the
customer journey? How is data extracted from customer
engagements and contact information?
There is an endless supply of solutions claiming to solve the datadriven marketing challenge, but marketers and business executives
require a solid understanding of the technological principles
each embodies to prioritize and make the best decision for their
organization.
How to Drive Growth:
What are traditional and data-driven perspectives on the main

marketing objective: to drive growth in key business indicators?
The aim of this book is to introduce you to the theoretical components,

technological principles and overarching process needed for a datadriven system to come together. Through examples and illustrations,
we explore the practical application of technologytaking you
from buzz words such as Big Data and Customer Journey into an
overview of actual business problems and how they can be solved.
How to Optimize the Customer Journey:
How do we organize the process for optimizing engagement

and understanding customers so we can find the fastest, datadriven way to increase growth metrics?
Results: Connecting the Dots between Strategic Goals,
Tactics and Attribution

How do we prove results in a data-driven fashion?
The Road to Data-Driven Marketing:
How do we get from buzz words into the actual questions Big
Data can answer, and what are the best ways to ask them?
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Table of Contents
Basics of Data-Driven Marketing and the Customer Journey

There is good news for marketers. Data-driven marketing can be
broken down into easily digestible components. In fact, the basics can
be translated into specific and understandable terms and connected
together in more sophisticated frameworks to formulate business
process. Its critical to evolve our thinking beyond some existing
abstraction models, such as the marketing funnel. This chapter will
introduce a construct describing the components businesses need
to carefully identify and consider along the journey to becoming fully
data-driven.
CONTACTS
ENGAGEMENTS
process
GOALS
To start, the first important concepts are goals, contacts, engagements,

data and insight.
Here is a simplified illustration showing how they interact in a datadriven process. Start by building engaging user experiences, and drive
users to a well-defined set of business outcomes. After tracking the
data, you can derive insights based on both positive and negative
patterns and business results. Those insights result in actions, or
repeatable actions in the form of process.
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DATA
math
INSIGHTS
behavioral traits, which can be fully contextualized to drive

decisions about new interactions and/or devise new ways to
understand customers and their interests.
The main components of this process are as follows:

1) Goals or Desired Outcomes: These are clearly defined and
cover two perspectives:
4) Insights: Data is only as good as the insights you derive from

it. In a very simple case, going from data to insights is a matter
of crunching the numbers. With the relatively new boom in
Big Data technology, we are going through a technological
disruption. But behind the buzz words of this disruption is a
simple problem to solve for marketing: how to provide a clear
interface to derive meaningful conclusions to key marketing
questions. Getting from data to insights is a matter of having
the right data, defining the right problem and having the right
technology behind the scenes.
a. Definition of success: How many customers have

converted and what made them convert? is an
important question to ask. But the next question
should be, convert to what? In reality, organizations
have multiple goals tracked by different departments,
potentially including clicks, test drives, trials, purchases
and customer lifetime value. It is a data-driven
marketers mandate to move definitions and success
tracking from short-term metrics (a click) to long-term
metrics (customer lifetime value).
b. Metric to influence and improve: Having a clearly
defined goal and action plan is a good way to structure
and centralize key performance indicators, track
progress and prove attribution.
2) Engagements/Interactions: These represent different steps in
the customer journey, spanning multiple channels. They can be
online and offline interactions, both in the digital and physical
worlds. Everyone has a series of engagements defining his or
her experience. An experience has multiple layers, including
what content the customer sees, how the content is designed
and what the interactions are. This path will be unique for
every customer, and for some, it will be a very long sequence
of disperse engagements.
5) Process: Insights are only useful if they are clearly and

distinctly connected to process or automation. The point of
data-driven marketing is to let data reveal hidden gems that
drive business action. This is why analytics systems must be
an inseparable component of execution or process systems.
Together, these systems can determine actions, control the
path to actions and track their effect thereafter. The role of
data-driven marketing is to seek those insights and act upon
them, either through automation or through process, and then
clearly prove and measure attribution.
If we look at things in a circular process such as this one, we get a
system of constant data-driven improvement in which you prioritize
with the help of data, then execute, measure, automate and reprioritize.
3) Contacts: Contacts are a combination of all anonymous or

non-anonymous customers or prospects interacting with you
in a certain way. They carry a number of demographic and
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Table of Contents
The diagram on this page proposes an entirely new circular process for
marketing professionals to follow.
The marketing process shown on the left-hand side of the illustration
below is the funnel model. The data-driven model shown on the
right is very different, and poses different answers to some of the most
important business questions:
- How do you drive growth?

- How do you optimize the customer journey?
- Who is my customer?
- How do you optimize process?
In the next sections we explore how traditional marketing has tackled
those questions, and how data-driven marketing reframes the thinking
around them.
OPTIMIZE
CUSTOMER
JOURNEY
BROADCAST
SPEND
MONEY
PERSONALLY
COMMUNICATE
VALUE
NEW
CUSTOMER
LEARN
CONVERT
HAPPY
CUSTOMER
Traditional Marketing
Data-Driven Marketing
The standard definition of marketing revolves around communicating

value. For a long time this has translated into a circlular model of spending,
broadcasting, converting and spending the profits again. This model is
getting more expensive and more inefficient by the day.
Armed with data-driven process, marketers can take a completely different,

more personal approach toward customers. Learning from existing customer
data, they can apply what theyve learned to target customers and improve
personalization. The more customers you have, the more you can perfect your
approach; the more you perfect your approach, the more customers you get.
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Table of Contents
How to Drive Growth
CUSTOMER
LIFETIME
VALUE
POTENTIAL
CUSTOMERS
HAPPY
CUSTOMERS
JOURNEYS
We have been using the funnel for decades, but it fails to help us prioritize
the best customers and recognize them early on. This is no longer in the
scope of sales you need scale and you need to be able to scale your
marketing methods.
Having a map of the customer journey allows you to predict very early on
who your potential customers are and serve relevant experiences for them
in real time. This allows you to prioritize both customer segments and
marketing activities.
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Table of Contents
10
Determining the role of data in the big picture requires a quick look at
the the following formula:
NUMBER OF ARCHIVED GOALS =
(NUMBER OF CONTACTS WHO ENGAGED) * (AVERAGE CONVERSION RATE)
If the goal is a sale, then the total revenue matters more than the
number of sales. For example, if you sell 1 million packs of gum for $1
each, this is different than getting 20 superstores to buy a shipment
of 2 million gum packs each. So if we add the revenue factor for each
of these, then the formula simply states total volume, the velocity and
how much revenue you get on average from an achieved goal as the
factors you need to grow.
Traditional Perspective: The Marketing Funnel

Improving business outcome using the traditional funnel approach has
three aspects:
More volume: Adding more people to the top of the funnel,
increases revenue or any other goal, since a fixed percentage of
them will convert. For the most part, this is statistically plausible
if you assume you are getting more of the same type of users
with the same type of conversion rate. However, this presumes
your assumptions are correct, and its very difficult and
extremely expensive to achieve. Typically, to increase quality
you decrease quantity, and different techniques decrease in
effectiveness. As the law of s#$ty clickthrough rates
clearly states:
Over time, every marketing strategy results in s#$ty click
through rates.
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11
More to the pointyour target market segment is not infinite.

A volume-based approach is essential, but there are traditional
and data-driven ways to increase volume. The data-driven
methods work on the basis of more of the right buyers, and
you can clearly see the difference between more of the right
buyers and more people and lets hope some of them turn
out to be the right buyers. This is yet another difference
between data-driven and traditional approaches to volume.
Better conversion rates: You can achieve much higher
conversion rates through customer journey optimization for
critical steps. Customers frequently follow such steps beginning
with popular landing pages or home pages. Optimizing these
areas provides some return and may prove experimentation
and A/B testing to be an effective way to influence the
customer journey. Starting with the most frequented
experiences generally makes sense, and traditionally, this is
where digital marketing professionals have focused. But what
happens when that potential has been reached and youre still
below your goal?
Higher average profitability/revenue per goal: This metric
is very tricky to influence and doesnt have a clear answer
in the traditional marketing sense. A traditional marketing
methodology promotes the oppositediscounts and
promotions. In reality, the amount of revenue you get per
customer certainly depends on business strategy, but in general,
influencing this metric usually entails a change of customer type,
quality of product, product strategy, perceived value or other
variables widely considered in the field of product and strategic
marketing. Here, the data-driven answer is a bit simpler: more
of the right buyers. But only after providing them with the right
experience would they be more likely to increase their spend.
So, which one of these should you focus on? Impact on any and all
of these parameters would account for the same growth. They are
directly proportionate: a 30-percent increase in volume has the same
effect as a 30-percent increase in conversion rate or a 30-percent
increase in average profitability. Since conversion rates typically are
smaller numbers, they seem likely to be the easiest to change. If your
conversion rate is 1 percent on 1 million leads, for example, growing it
to 1.3 percent seems more doable then getting 300,000 new qualified
leads. Below well see different data- and customer-centric ways to
achieve increasing profitability and desirable outcomes.
But heres the trick: not all customers and experiences are the same.
Funneling more and faster is not an answer to sustainable growth.
The business world has learned this the hard way. Funneling more
and faster as a model is a linear system; it has a beginning state and
an end state. No linear system can ever work in a finite space. Imagine
that your market segment is growing by 10 percent this year, then 8
percent next year, then 7.3 percent next year and you target 12 percent
year-over-year growth. The only way to achieve that growth is to cause
negative growth in some of your competitors, otherwise you will run
out of marketplace buyers at some point. This is why the funnel model
is reaching its limit, leaving businesses to pursue more customercentric models.
Data-Driven Perspective: The Customer Journey

A different model, the so called customer journey, approaches growth
with a different philosophy. It is not a simple flow measurement
measuring people in and out of the buying cycle and seeking to
increase them. Instead, it captures every single step of every single
customer. It does that to find patterns. With patterns, you can resurface
priorities at will, such as who are your most important customers,
which prospects have the biggest customer potential, which customer
engagements are working and which can be improved. The customer
journey fixes some of the biggest flaws in the funnel, namely, its
inability to prioritize customers and actions.
Why has the industry migrated toward this model? This is where
the customer-centric trend comes into play. The right customer,
when he or she is happy, engaged and promoting, brings a level of
circular attribution and exponential growth that becomes sustainable.
Additionally, knowing exactly what made a customer convert helps
you convert more customers in kind. This is then coupled with the
increasing expectations of customers to be more connected and
receive personal and compelling experiences prior to conversion. The
confluence of factors means that meeting and exceeding customer
expectations requires solving multiple problems, while creating
a model of sustainable, sometimes exponential growth amid a
continuous learning system that improves customer acquisitions and
produces happy customers.
This is the win-win scenario for which data-driven and strategic
marketing strives.
A smarter way to phrase the question is, What is the optimal growth
in key metrics that influences my goals and is achievable over a period
of time? As with many things, it depends. The world of marketing and
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Table of Contents
12
digital experience relates very closely to your capacity to influence a

certain outcome in a certain amount of time. If someone can give you
insights about 50 campaigns that present the biggest opportunity for
your conversion optimization, can you execute on all 50 in a week, a
month, a year?
This is why its important to consider a strategic and tactical
perspective. Draw models and process based on a long-term strategy,
but consider optimizations and tactics as they relate to the next step
with the most potential to produce a maximum measurable impact.
But what exactly is this model for growth from which we can derive
tactics? Again, this is where customers come into play.
Start from your existing and ideal customers. Learn why you
have become successful in acquiring and converting them and
where you have failed the rest.
This becomes an insight to acquire more of your best
customerswhere do they come from and what are they
interested in? This is an insight you can apply within a demand
generation or advertising strategy.
Based on those insights, you can also optimize some of the
key routes they go through and become more successful in
acquiring new customers. This in turn resurfaces new insights
on new routes to optimize.
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Table of Contents
Simply put, in a data-driven marketing world, we first answer the

question, What do we want to achieve: sales, donations, sales
conversation? With data we can start answering questions such as:
Which customers deliver this result most often?
Whats the profile?
What are the trends and patterns in the customer journey that
lead to a positive result?
How?
Consider the 80/20 rule of productivity. Twenty percent of the things
you do bring 80 percent of the results. A more likely rule for your
business is the following: two percent of your visitors bring in 80
percent of the revenue. This is an essential component to consider
when starting to examine the customer journey. What are the
dynamics that attract your best and happiest customers, at both a
macro and micro level? Influence the customer experience for those
folks first, so when a similar customer comes in, you can usher them
toward a faster path to conversion. Repeat and refine the process
for each successive group until the level of granularity is so acute it
approximates a personal conversation.
The next chapter takes a granular look at data-driven optimization
techniques on top of a similar 80/20 rule.
13
How to Optimize the Customer Journey

Going back to the basics, we looked at a few terms that define our
process for building and analyzing the customer journey. Now to
optimize our approach, we need to look at how to improve them further:
Better engagements
Better goals
Better insights
Better customers
Better data
Better process
Engagements: Engagements are the largest and most meaningful

set of data points we have. Each user has a number of engagements
across different channels. Our optimization purpose is to build, present
and drive such engagements to increase the probability of customer
conversions.
LEARN FROM
CUSTOMER
SUCCESS
BUY
FIND
KEY STEPS
APPLY TO
ACQUISITION
PICK AN
EXPERIENCE
FIND BEST NEXT

EXPERIENCE
OPTIMIZE
When you need to influence a metric, you usually start a guessing game of
what to do: what promotion to run, what to optimize, which customers to
target. This usually means everybody working six times as hard, but a lot of
this effort doesnt help your actual growth in an optimal fashion.
In data-driven marketing you learn from customer success and apply it to

customer acquisition and conversion. Data around the customer journey
helps you find key segments, steps and experiences that will influence
exactly the tactic you are targeting, transforming your team into a zerowaste system.
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14
Optimizing Engagements:
A Data-Driven Perspective
Reverse Engineering Customer Success
demographics, interests and behavior. Its difficult enough to track

these in one system, but because of cross-channel challenges, you
might have difficulties consolidating dispersed data in disparate
systems and reconciling it to know its coming from the same customer.
Optimal engagement patterns for each customer are unique. No

two are necessarily the samebut they can be. Thats where the
data comes into play. Recognizing and leveraging behavior patterns
presents a huge business opportunity.
Start with successful conversions. What do you see? Are there
customer journey patterns in common? What was the shortest and the
most common path? What path is typical for my target buyer? This
type of analysis provides meaningful segmentation on your customers
based on behavioral data, as well as a segmentation of engagements
based on their impact and attributionboth by themselves, and in
combination with other noteworthy engagements.
A customer journey by definition is a chain of engagements, so
gaining insight about a combination of engagements that produce
better conversions is invaluable. In a website, the main way you guide
the journey is simply through linking navigation, calls to action,
banners and so on. In a sales conversation, you interlink mentions of
certain benefits, collateral, customer successes and so on, essentially
controlling the flow. Insights about individual step attribution toward
the larger goal gives you vital information about what resources to
emphasize or replicate. Insights on engagement order illustrate the
flow you need to optimize and how to best arrange your journey.
Mapping the customer journey is very difficult to visualize on a

macro level, not to mention draw enough insight to impact business
results. The analytic work is exhaustive because the path is unique
for each customer, and the number of possible paths is immense.
However, when we break down these engagement and customer
segments into who has beneficial behavioral engagements, we can
see certain combinations produce more than others. For example,
customers browse activity gear because they are outdoor enthusiasts,
they ask about car safety because they are new parents, and so on.
By combining these behaviors with demographic data, youll find
some paths in the journey are more closely associated with certain
demographic characteristics or profiles.
Try to answer this for your business: what combination of interactions
work best to achieve your goals, and for which customers does this
have the greatest effect?
Consider this: in a customer journey, you have to examine each

page or email viewed, sales call made, event or billboard seen, or
document downloaded, and millions of other engagements. Each
user has participated in some combination of touch points in a certain
order and timeframe, bringing his or her personal context based on
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15
One way to answer this question is to have an opinion based on some

superficial data and observation. We sent out a survey that included
a question about job position; 40 percent of our buyers turned out to
be marketing directors. Although this is good insight, but how do you
classify someone as a marketing director if he or she is just browsing
anonymously on a cell phone, for example? More importantly, do
you know what type of engagements are important for this director
and what to present? If not, here are some important segmentation
questions:
Is this segmentation focus decision opinion- or data-based?
Standard marketing data derived from surveys or even benchmarks

cannot answer this question because:
It requires a full 360-degree view of the journey for each
successful customer.
The number of possible combinations grows extremely
quicklyexponentially, in fact. If you have 32 parameterssay
16 regions and 16 web pagesthat you care about, then you
have over four billion combinations of them, but in reality only a
few dozen will prove to be meaningful.
This is the secret behind how Google serves ads and how Netflix
recommends movies: certain algorithms draw insight as to which
exact combinations of behaviors are the big money makers and which
components in those combinations have the biggest attribution.
Then, they dictate which the best next experience is for them. This
is not technologically impossible; its simply not yet commoditized for
companies that do not have a data science department.
What other segments in your purview could be bigger

growth drivers? Which specific industries, sub industries or
demographic groups, for example?
Are certain customer journeys enough to qualify customers
in a meaningful segment?
How quickly and accurately can you predict conversion rates
based on a specific segment?
These optimization questions are impossible for humans to process.
To come up with a meaningful list of customer segments that are
low-hanging fruit or experiences with the opportunity to drastically
improve your goals, you need to look at endless behavioral and
demographic criteria, most of which will turn out to be close to
irrelevant. However, some will prove to be very importantthis is
your insight.
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16
The Customer
In business, your main priority is to have a keen sense of your current
customers. This helps determine who your ideal customers are and
what your growth plan should be to retain and acquire more. In the
comparison between the data-driven and traditional models, youll see
that data-driven marketing principles dont take a drastically different
approach toward customers. Instead, they create better in-depth
understanding and better connections with data to drive insights, as
opposed to some more superficial decision-making techniques.
A Traditional Look:
Segmentation, Surveys and Statistical Data
Traditionally, customers play a role in marketing planning, but decision
making is typically based on a high-level understanding of the
customer. Some of the traditional principles have been:
Manual segmentation based on demographic data:
In traditional marketing, behavioral segmentation has
been difficult until recent years. The main factors driving
segmentation are demographic: job title, industry and
geography for B2B sales, age, gender, family status and
interests for B2C. Based on those, marketers have created
models to picture and profile customers.
Lead scoring: A more advanced model is lead scoring, which

is the ability to accumulate behavioral and engagement data
to achieve some type of predictability over whether someone
will become a customer and offer some level of automation.
The benefit of scoring is that it is easy to understand and
works with automation process (lead reaches score X, they get
passed to sales). The drawback is that the prioritization created
by lead scoring is still created based on opinion-driven criteria.
Manual segmentation is used to frame certain campaign and
promotion planning, create personalized offers and experiences with
the brand, locate advertising media and create marketing messages
that are intended for a particular segment.
Surveys and a handful of other data points have been the traditional
marketers way of proving or disproving assumptions made in the
manual segmentation.
Scoring is currently used by some of the more advanced organizations
to achieve some level of automation in the segmentation and sales
enablement process.
Survey-based marketing: In surveys, we use specific

methodology to get a snapshot of the audience at one point in
time. Based on that snapshot, businesses make decisions about
what channels, products and services to develop, what type
of marketing materials to create, what is the health of key KPIs
such as a Net Promoter Score or Customer Satisfaction Rating.
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17
For example, take the oldest question in marketing: How did you hear
about us? This comes from a time in which systems were unable to
track the exact customer journey that a certain large client has taken,
and further pinpoint its starting point. There are a few problems that
exist in such a method:
Most of your customers will not answer this type of survey; the
type that does answer it usually has similar traits (wants to win
the free thing you are offering), which introduces bias into the
numbers. Even the ones that do answer might not remember
to give a very data-centric response.
Customers: A Data-Driven Perspective

Micro Segmentation, Behavioral Profiling
and Validated Learning
To understand the data-driven principles behind customer
development and the role that strategic marketing plays in it, you have
to know lean and agile principles and implement them correctly.
The main goal of data-driven marketing, in this case, is focused on the
following KPIs:
Minimize cost to acquire a customer
The question assumes incorrectly that how the customer

heard about you is the main characteristic, and by prioritizing
the most common answer, youll yield unlimited growth.
Maximize customer lifetime value

Why those metrics? Because of this simple business rule:
Simple surveys are entirely too narrow in scope to review

the thousands or even millions of questions you need
each customer to answer precisely to prioritize campaigns,
messaging, flow, digital experience and cross-channel outreach
and to maximize customer acquisition. A survey is not able
to cover the information breadth you need, giving you only
a partial view, although the data points measured may be
accurate.
While potentially helping to identify a value segment, this
approach fails to account for the next action step: automating
future activities to guide business-critical customers through
their experience. Essentially, it disregards the next step of what
happens after they hear about you.
Cost to Acquire Customer < Customer Lifetime Value
This formula, although popular for startups, is critical for any business
to track and control. In very simple terms, Customer Lifetime Value on
average should be larger than the Cost to Acquire a new Customer
in the range of 3x, 4x or 5x largerif one is to maintain a successful,
growing business.
This approach uses profitability-based decision making, and its
much more sophisticated than using traditional metrics, which simply
measure small windows of interaction, such as clicks, page views or
customer satisfaction ratings.
The answers to these questions are within the scope of data-driven

marketing.
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18
Strategies of the data-driven approach include:

Studying customers with high Customer Lifetime Value
Targeting cost for acquisition for similar customers
Validating and refining metricsconstantly
Data-Driven Marketing Process
MARKETING
ACTIVITIES
CUSTOMERS
CONVERT
IDENTIFY
SEGMENTS
THAT CONVERT
BELOW/ABOVE
AVERAGE
IDENFITY
SEGMENTS YOU
CAN INFLUENCE
TO CONVERT
EXECUTE
ACTION TO
INFLUENCE
CONVERSION
AUTOMATE
ACTION TO
CONVERT
SIMILAR
CUSTOMERS
TRACK SUCCESS
INCORPORATE
LEARNING
TO DEVELOP
KEY TARGET
PROFILES
The main idea here is to start by listening and incorporating past data. This will help you find patterns revealing a successful customer journey,
while exposing a few critical things:
Which customers are likely to take that journey
Which customers are already on that journey
What can further influence their path, delivering the Best Next Experience
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Traditional vs. Data-Driven Segmentation

There are several differences when segmenting customers according
to traditional versus data-driven marketing approaches:
Segmentation criteria are selected by humans based on opinion and

superficial data.
Segmentation criteria are intelligently derived from data.
Number segmentation criteria are limited, usually to 3-10 factors,

including job position, geography, industry and so on.
Segmentation criteria are data-derived and can be any behavior,

trait or interaction, as long as it indicates a segment with specific
behavior similarities and is predictive of results.
Classifying and prioritizing customers and marketing actions cannot

happen in real time. Distribution of priorities is derived from scarce
data and statistical methods, such as surveys.
Classifying and prioritizing customers happens in real time, based

on a full analysis of the voluminous customer data.
Essentially, a data-driven approach removes anything opinionbased or based on scarce and incomplete data. Instead, it starts with
the question Who is my customer, and lets data reveal patterns
to guide decision making. From high-level data such as customer
title33 percent Marketers, 54 percent Developers and 13 percent
unclassifiedto low-level, granular data that delves into thousands of
microsegments based on unique characteristics or behaviors, the datadriven approach is extremely powerful.
Example: Netflix movies are classified in 80,000 different categories.
These categories help it gain a unique understanding of your movie
preferences, which influences not only the recommendation engine,
but the entire decision-making process of what movie catalog would
drive up subscriptions.
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The original Netflix series Orange is the New Black and House
of Cards are examples of strategic decisions to draw viewership
and subscriptions. What you may not know is that those decisions
were data-driven ones based on observations about relationships
between a viewers preference for seemingly unrelated categories.
But it wasnt an executive who suggested looking at whether there is
a relationship between people who like Kevin Spacey movies, people
who like British political dramas and people who like dark, cerebral
shows. It was an algorithm that identified that combination, providing
actionable data for Netflix to act upon. The results are evident: profits
and revenues have more than doubled, and Netflix passed the 50
million subscriber milestone.
Results: Connecting the Dots

Between Strategic Goals, Tactics and Attribution
A goal is a natural and intuitive term in the business world, but it
has yet to make its way to the everyday marketing process. While a
business usually has clear and specific revenue and sales goals with a
prioritized and quantitatively outlined set of goals on a conceptual level,
a marketing organization rarely deals with that type of structure.
As marketers, we have become obsessed with data, but have had just
a few years of data with which to connect the dots and catch up to
sales mechanisms that have had a 50-year head start. We havent yet
reached the stage where quantitative goals for a marketing department
are the norm, not to mention goals for each individual or team.
REVENUE
MARKETING
ACTIVITY
$$$
Marketer A: We launched 5 major campaigns this year, reaching 20

million users in 30 different countries. Our website redesign provided
a great experience increasing page views and time on site and our
mobile traffic is up 300%. After launching a new product and massive
advertising campaign, we received 210 mentions in the media and 1M
impressions on Twitter. As a result our company revenue grew with 32%.
Marketer B: By targeting key segments with maximum buying potential

through cross-channel campaigns and dynamic personalization, the marketing
department contributed to 20% of the revenue increase and 35% of the
customer lifetime value increase, exceeding our overall goal of 30% growth
this year by 2%. The marketing initiatives drove 10x return on investment on
budget and provided a twofold increase in the customer lifetime value/cost per
acquisition ratio. Here are the clear points that attributed to this
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Marketing Goal vs. Business Goal
There is nothing wrong with the story shared in scenario A. In fact, it

seems very impressive, and one might conclude that this is a driven
organization because it cites a lot of data. However, it provides no
business answers to the following questions:
1) How did these tactics contribute to revenue growth, and
exactly which ones?
2) What type of budget should I allocate for next year to produce
even higher growth?
The difference between marketing and business goals is the way

theyre defined. In the first case, we can see a clear example of a goal
based on marketing data. In the second example, we track goals based
on financial data such as revenue, fulfillment and services, as well as
by reviewing forecasting models for customer lifetime value for each
acquired account. Business goals are not instant gratification goals,
satisfied by a click, view or impression. These goals are achieved in due
time, making it challenging to connect them to earlier stages of the
customer journey.
3) What customers should we prioritize?

4) What initiatives should we prioritize?
A similar assessment from CMO A might lead to the logical conclusions
of investing more money into campaigns and increasing the budgets.
However, as these investments grow over time, the return on them
will decrease. As data-driven professionals, we need to move quickly
toward attribution models. This is a main aspiration of data-driven
marketing: to have full context and journey attribution percentages for
each activityas well as the full costattached to each activity. Only
this way can you calculate a true ROI and fine-tune your spending and
effort in ways that maximize relevancy.
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22
In both cases, the business teams are responsible for contributing to

revenue. But when you look into a short-term goal, the revenue impact
is difficult to quantify. Theres a tenuous connection between random
growth in prospects entering the sales funnel, perhaps in response
to campaign activity, and an associated increase in customers at the
other end. That scenario can be just as easily coincidence as causality.
In data-driven marketing, maturity and success is directly correlated
to how far ahead your goals are long term goals such as increasing
Customer Lifetime Value usually yield much better long-term results.
Interestingly enough, the more mature your process is, the fewer goals
you end up tracking. In stage 1, you might have to review page views
and data for various assets, trying to make sense of data, while in stage
4, you strive for one very special metric: the Customer Lifetime Value.
Your main goals then become to increase the number of customers
and/or increase the Customer Lifetime Value for each.

To achieve that goal, you must examine how much each of your
actions and your spending contributed to generating Customer
Lifetime Value.
Four Stages of Data-Driven Marketing
STAGE 4
+ CLV DATA
STAGE 3
+ FINANCE DATA
STAGE 2
+ SALES DATA
STAGE 1
Revenue-based
decision making
Add data from finance,
fulfillment and services.
Marketing driven by strategic
business objectives.
Result: Measureable success
MARKETING DATA
Response-based
decision making
Marketing driven by
marketing data alone.
Result: Fast failure
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Conversion-based
decision making
Add data from sales.
Marketing driven by sales
pipeline performance.
Result: Slow failure
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23
Profitabillity-based
decision making
Add data from support and
account management. Marketing
driven by Customer Lifetime
Value (CLV).
Result: Market mastery
Therefore, our immediate goals are to try to connect customer journey

data across every channel and start with as data-driven an approach
as possible. Over time, shift goals to cover more sales, financial and
even retention or lifetime value data. In this way, you can progress
through stages 1-4 at a pace that works for your organization.
Whether a prospect completes a form, registers for a webinar

or downloads a whitepaper is not a goal by itself. It matters only
whether or not there is contribution to the end goal. The technical
challenge is that:
1) Most companies dont have all marketing, sales, financial and
account management data for a single customer together
in one system. This requires very sophisticated integration
platforms, good ways to purge and consolidate data, and
enormous volumes of storage.
2) The companies with sufficient data dont have the ability to
process it to provide enough macro-level insights.
3) These goals do not provide the instant gratification that a
click provides. Even after you have the infrastructure to process
data, there is a waiting time for the cycle to close, resulting in
the accumulation of months or years worth of data.
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24
The Road to Data-Driven Marketing

Shifting to a data-driven marketing approach is much more than
buying the right piece of technology. Its a process that requires a
complete commitment from stakeholders across the company, and
even with that, will likely take several months to implement.
In this chapter, well highlight some aspects of the technical conversion
to a Big Data approach that are good to avoid. This frees you to focus
on the organizational journey, which is, in truth, the most important
part. This map of the journey tackles all of the quests and challenges
described in our Challenges section.
Cross-channel data: This is a big infrastructure challenge
because we need to combine data for each customer from
each channel. It has both integration and data integrity
implications because you must accommodate easy data source
additions, large data storage and ways to anchor customer
data from diverse channels to the same person.
Customer intelligence through record and scoring systems:
Once you can properly understand customer data, you can
start adopting general customer intelligence. This has different
implications for sales and marketing, because each requires
unique data to have an impact on their part of the customer
journey. Systems need to accommodate both.
Customer journey understanding: While customer insight
often starts with opinions and gut instincts, data injects
objectivity. Simple questions about which course to take are
settled by applying buyer journey behavior to similar customer
prospects. Seek success by using what has already proven to
be successful.
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Long-term business goals: The journey toward true datadriven infrastructure starts with a mind shift away from
superficial metrics toward long-term goals. The focus should be
on identifying your long-term goals and leveraging whatever
positively influences those goals. This enables marketing teams
to define and diligently track KPIs and strategize to influence
them. Further, it provides the tools needed to answer questions
around true ROI, cost of acquisition, forecasting, optimized
marketing planning and so on.
Accurate predictions (predictive analytics): Once your goals
are set, with the complete dataset available, you can make
much more accurate predictions. At this point, a lead score
becomes more meaningful, taking you from a relative number
of points assigned to an actual conversion probability you
can predict with great accuracy. Shifting from opinionbased heuristics to data-driven models is a key step toward
automating the sales and marketing machine of a data-driven
organization.
Best next action for each customer
(prescriptive analytics): Accurate predictions on a
macro level (forecasting), as well as micro level (customer
conversion) are stepping stones to another level:
prescriptions. Once you can predict behavior, you can
prescribe next steps. This is similar to how Google can predict
your likelihood to click on a certain ad with great accuracy. It
uses data to present ads proven to be successful with people
similar to you. By having the previously mentioned protocols
in place, technology can now be effectively leveraged to help
improve and prioritize the marketing process and increase
customer conversion rates organically.
Proven attribution for marketing actions and true ROI:

Proving marketing attribution is traditionally challenging, as you
need to manipulate parameters and track success. Statistics
and the scientific method offer ways to prove cause and effect
between different actions, and data-driven marketing has
a major task in pulling the story together. Broad marketing
activities provide little clarity into how they specifically
contribute to metric growth. With a clear understanding of
journeys, goals and conversions, you can devise ways to prove
attribution in very specific terms. Then you can mold an
organization that plans, executes and delivers based on true
ROI, thus maximizing every effort.
All steps in the marketing maturity process are, in one way or another,
within the scope of whats commonly referred to as Big Data or
Data Science. With the right tooling, you can cover all bases and
start improving the different steps. But the point of these steps is to
direct you toward a repeatable, circular process with a scientific basis,
providing all necessary marketing metrics and leaving your team with a
clear priority list and set of iterations.
Full cycle of automation to maximize ROI

(real-time marketing): Imagine the following: you get an
insight and send an email to all people in that segment to
promote an offer. Results? Instant success for that customer
base. But what happens for the next 1,000 that will come in
the next year? For this, you need to automate, making sure
they get the same real-time offer or experience that will drive
them further.
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Conclusion
Data-driven marketing wont be the gold standard for a few years,
which puts you in a unique position. You can get ahead of the curve
by changing the game for your organization, being an innovator and
reaping all the credit.
Data-driven marketing presents a number of challenges that are

both technological and behavioral in equal measure, each requiring a
mindset change.
Pursuing the perfect data-driven end result will yield continuous
predictability, prioritization, attribution and automation. This can be
integrated with the creative process to provide maximum impact and
fast growth.
If you want to learn more about data-driven marketing or consult

a technology expert about jumpstarting this process for your
organization, visit the Telerik Sitefinity Digital Experience Cloud and
request a demo.
With a mind shift into data-driven marketing, marketers can move

away from deprecated notions like the marketing funnel, counting
clicks, opinion-driven decisions and one-way communications. Instead,
they can turn infrastructure into a smart, self-improving intelligent
system to guide them to real customer conversations.
Request a Demo
Until recently, this seemed like science fiction, as opposed to marketing

practice. But now, the road ahead is taking shape. It consists of
understanding components of the customer journey and how it can
be changed and expanded: ultimately providing more and more value.
With current technology, most of these steps take a matter of weeks to
initiate and benefit from.
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DATA-DRIVEN

Data-Driven Marketing How to use data correctly and drive growth

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Why Data-Driven Marketing

The Basics of Data-Driven Marketing

How to Drive Growth

How to Optimize the Customer Journey

Results: Connecting the Dots Between

The Road to Data-Driven Marketing

View more information at Sitefinity.com

Data-Driven Marketing How to use data correctly and drive growth

Why Data-Driven Marketing

Marketing has experienced a fundamental shift recently. Techniques

the activity, set of institutions, and processes for creating,

For organizations to succeed in a competitive landscape,

However, this traditional definition no longer works. You can blast

Marketing is a strategic discipline that uses closely

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View more information at Sitefinity.com

Data-Driven Marketing How to use data correctly and drive growth

Each organization can benefit from transparency in goal-centric

51 percent claim lack of data sharing within their own

Even large datasets fail to make meaningful connections to

Research indicates 91 percent of senior corporate

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The reason for this is twofold:

View more information at Sitefinity.com

Data-Driven Marketing How to use data correctly and drive growth

Challenges for Data-Driven Marketers

The quest for attribution: Every activity needs to connect closely

Marketing and business executives have become strategically and very

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Data-Driven Marketing How to use data correctly and drive growth

How to Use This eBook

The book is divided in the following sections:

How to Drive Growth:

What are traditional and data-driven perspectives on the main

The aim of this book is to introduce you to the theoretical components,

How to Optimize the Customer Journey:

How do we organize the process for optimizing engagement

Results: Connecting the Dots between Strategic Goals,

Tactics and Attribution

The Road to Data-Driven Marketing:

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View more information at Sitefinity.com

Data-Driven Marketing How to use data correctly and drive growth

Basics of Data-Driven Marketing and the Customer Journey

To start, the first important concepts are goals, contacts, engagements,

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View more information at Sitefinity.com

Data-Driven Marketing How to use data correctly and drive growth

behavioral traits, which can be fully contextualized to drive

The main components of this process are as follows:

4) Insights: Data is only as good as the insights you derive from

a. Definition of success: How many customers have

5) Process: Insights are only useful if they are clearly and

3) Contacts: Contacts are a combination of all anonymous or

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