One of the primary reasons people prefer online shopping is the low price tag. Other reasons include free shipping, speed of delivery, and the vast catalog of products. As such, providing free delivery is an effective strategy to attract customers. This is what a data-driven strategy for e-commerce looks like.
Data drive most business operations, and it’s a valuable source for offering insights into your customer’s behavior. If you want to increase your conversions and amplify your customer engagement, you must implement an effective data-driven marketing strategy for your e-commerce store.
Through this article, we will examine what data-driven strategy is and how to build a data-driven e-commerce strategy.
Data-Driven Strategy: What Is It?
The information you collect from an authentic source about your customer, audience, and current market trends is termed as data.
When you use that data to formulate a business strategy to accomplish your business goals and objectives, that strategy is called a ‘data-driven strategy.’
This strategy is the most reliable method for e-commerce to attain its goals as the data maximizes the sales and marketing efforts and helps predict the outcome.
The following are some tips on how to build a data-driven strategy for your e-commerce business.
Set a Goal
The first thing you need to do is to set your goals.
What do you want to achieve through your marketing and data-driven e-commerce strategy? Whether it’s to pull in customers, build loyalty, drive sales, etc., they must be realized over time.
However, you must organize your goals and focus on one at a time.
Centralize Your Data
To create a data-driven e-commerce strategy, it’s crucial for you to collect data from an authentic source. Google trends and google data are some niche sites for collecting data.
Data can be derived from various sources, and this will provide you with in-depth information but ensure that the data is not kept fragmented. If you do, you won’t have a full view of your customer, and you may overlook some critical points.
After collecting your required data, centralize it in your CRM. This will provide you with a complete analysis of your customer’s behavior and help track their preferences and behavior.
Build a Buyer Persona
After collecting and centralizing your data, you must create buyer personas. Data shows that 56% of companies have generated higher-quality leads by using buyer personas. The buyer persona is fictional but is a factual representation of your perfect customer. It includes critical information such as demographics, shopping behavior, gender, and average age.
Thanks to this, you can have comprehensive information about your customers, their behavior, and preferences: what product categories they prefer, which banners they like to click, how they came to know about your services and products, among others.
Collect data from various sources and analyze it to create a buyer persona. After that, you can compile them together, and if required, you can also divide them into different segments. You can have one or multiple buyer personas. However, you must identify all of them.
Choose The Appropriate Channels
Buyer personas tell you who your customers are and what they like and where they spend most of their time.
Some of them might prefer online shopping to in-store. Some may check their social media more than their emails, and some may prefer their smartphones over their PC. This data is indispensable and helps figure out where your potential customers prefer to spend most of their time and how they want to receive marketing messages.
Use this information to select the best channels which will make your marketing efforts more effective.
Time Your Campaigns
Data shows that more than 80% of consumers prefer brands to know the right time to approach them. And Other than the ‘where’ and ‘who’ of buyer personas, you must also consider the ‘when.’ At what time do your customers browse, buy and share about your products? When you create your buyer persona, you’ll gather information about your customer’s timing and preference. Use it to time your campaigns, and it’ll pay off. You have to make sure that your marketing messages don’t get ignored by your prospects.
Segment and Personalize Your Emails
For e-commerce stores, email marketing can be a powerful tool. Data shows that 82% of marketers witnessed an increase in email open rates through mail personalization. However, 70% of marketers don’t use them. They can help retain and bring back customers, boost revenue and lower the rate of abandoned carts.
However, for this to happen, you must send the right email at the right time to the right person. Use your buyer persona to segment your email lists. This will allow you to send more targeted emails.
Instead of a one-size-fits-all approach, email list segmentation will enable you to personalize the emails to your customers’ particular needs, wants, and interests.
Invest in Influencer Marketing
Influencer marketing is an effective approach to boost engagement and reach your target audience. However, if you offer a wide range of services and products, it can be challenging to find an influencer that appeals to all of your customers.
Buyer personas can be helpful in this case. Whether you work with one or multiple influencers, you must work with people who align more with your buyer personas.
This will make sure that your marketing campaigns get noticed.
Come up With a Great Customer’s Journey Map
Continuously trying to increase incoming traffic flow is one of the most common mistakes made by e-commerce businesses. In reality, this can cause a positive effect only when the case is associated with more prominent brands that already have a grasp of their audience’s behavior and needs. In other cases, it’s more vital that you concentrate on analyzing sales funnel stages and tracking their performance.
Tracking various events can offer you a larger picture of where you went wrong, whether it’s the thank you, landing, pre-landing page, or others. Most of the time, checkout is the most troublesome area for e-marketers. By understanding your customer’s behavior, you’ll be able to figure out which parts of the customer journey need optimization.
Generally, optimization results in an instant boost in conversion rates. A smooth purchase process can be the deciding factor between making a sale or losing a customer forever.
Learn From Your Loyal Customers
If you want your e-commerce store to be successful, one of the essential ingredients is a high customer retention rate.
One of the easiest and best ways to achieve this is through studying your most loyal customers. To find your most loyal customers, segment your customer list and narrow down the 100 customers with the most lifetime spend.
After that, you’ll have to examine their behavior and how they interact with your business. For instance, if most of your loyal customers purchase a specific product, you can focus on marketing that particular product to attract similar customers. Similarly, if most of your loyal customers follow your business on Instagram compared to other social media accounts, you can devote more resources to Instagram ad campaigns to boost your profile reach.
Analyze the Results and Optimize Further
After you’ve created buyer personas and strategized your marketing campaigns, you’ll still have to evaluate and optimize your data. One of the most critical and challenging data-driven marketing areas is being up to date with your continuously decaying customer data. Research shows that customer data decays at a rate of 30% every year, and this number is as high as 70% per year in some markets.
You must know that your buyer personas and customer data aren’t static. They will always be changing. Your customers buying habits and behavior are influenced continuously by trends and technology.
Due to this, you must consistently re-evaluate your buyer personas and the information used to create them. Many companies make the mistake of reassessing their buyer personas only after their campaigns come to a halt. Instead, you must routinely analyze your marketing campaign results, examine your customer data and modify your strategy whenever necessary. If you become complacent, your strategy will become outdated.
You should also consider using predictive analytics. As the name suggests, predictive analytics uses historical data to help predict what will happen in the future.
By analyzing algorithms, big data, and machine learning, this technique can forecast business outcomes. With predictive analytics, you can recognize various patterns, and this will help you identify frauds, reduce risks, improve operation and optimize marketing campaigns.
Examples of Data-Driven E-Commerce Marketing
Here are some examples to simplify the concept of data-driven e-commerce marketing
The Cable Provider
A cable provider analyzes their customer base and realizes that a majority of their customers made big purchases after they moved to a new home. To take advantage of this, they bought information from the United States Postal Service so that they can know who moved recently. After that, they particularly designed a multi-channel marketing campaign for the new buyer persona ‘the mover’.
Large Online Retailer
A large online retailer sells a plethora of products and services. After studying purchase trends, they realized that some products were purchased more than others. To capitalize on this, the online retailer initiated a subscription service that allowed customers to schedule the delivery of particular products on a pre-planned basis. This strategy proved to be highly successful as shoppers were less likely to go out and purchase a similar product from another retailer when they knew they had a pre-determined delivery scheduled.
By now, you must have realized that data-driven marketing takes various forms. The way you interpret and use the data you’ve collected depends on you, but you must routinely analyze customer data, behavioral analytics, and purchase trends. If you don’t, you might miss out on crucial business opportunities.
Robert Jordan, a seasoned marketing professional with over 12 years of experience, currently working as Media Relations Manager at InfoClutch Inc, which offers the most sought-after technology database including Netsuite customers list, Salesforce clients list with other services. His passion is writing. Now he works at Study Clerk as a content creator.