As a marketer, one of your most important assets is data. High quality data allows you to take your marketing up a notch to target different customer segments, deliver customized marketing materials, and focus your efforts on those most likely to buy from you. Marketing data modeling is the key to unleashing the power of your data and creating effective marketing.
What is Marketing Data Modeling?
Marketing data modeling is a powerful tool that analyzes your customer data and gives you key insights into who your top customers are. Data models provide in-depth customer profiles that highlight demographic, geographic, lifestyle, and behavioral characteristics of your customer base. You can use this information to make strategic marketing decisions and create strategies for growing your business.
Benefits of Marketing Data Modeling
Why should you invest in data modeling? One of the greatest benefits of data modeling is getting a deeper knowledge of who your customers are. Modeling goes beyond general audience demographics such as age, income, and net worth and looks at thousands of different data variables and their relationship to one another.
If you know your customers are males in their 40s with an income of 75k, which individuals in that audience should you focus on? If you target everyone in that audience, you’ll be wasting resources. By applying data modeling, you can narrow your focus. You might learn that you should advertise to the ones who have dogs, love hiking, own a boat, own their own home, and live within 10 miles of your store. The rest of the group will yield little to no response. Having this information lets you trim those least likely to respond from your prospect universe.
This level of focus brings another great benefit of data modeling and that is the ability to improve your targeting and personalization. When you have a strong sense of who your customers are, you know which prospects you should go after. Prospect lists can be scored and ranked by your model, so you can target the top prospects. Knowing more about them, you can personalize your marketing materials for the selected households. People pay more attention to advertisements that are tailored to their interests and seem relevant to their stage of life.
A third benefit is optimizing your campaign towards responders. Because you know who was targeted, you can match up responders with the marketing list, delivering accurate ROI measurements. The response data can be fed back into your marketing data model, so you can refine the model and optimize your prospect list and marketing strategy.
Steps in the Marketing Data Modeling Process
The marketing data modeling process begins with data collection. You always want to start with your current customers because they are the ones buying from you. Pull your transaction files and lead generation form data. The most important information to gather are names and postal addresses, but you might also want to collect email and phone numbers. If you are not collecting any customer data, then create systems to start capturing that information.
The next step is data preparation and hygiene. This step is critical to getting accurate results from the data model. This step involves removing duplicate records, cleaning up records, updating data, filling in missing information, and aligning formatting for processing. If you skip this step, the data modeling process will produce skewed results and lead to inaccurate customer insights.
After the data has been prepared, it’s time to model it. Data scientists will analyze the information and see what variables offer insights and how different variables correlate to each other. They will gather the information together and evaluate the findings to ensure accurate results are presented. Once everything has been confirmed, you will receive the modeling results and a customer profile. Use this information to guide you as you build out your marketing strategies and plans for growth.
Creating effective marketing starts with knowing who your best customers are, finding prospects who look just like them, and tailoring marketing pieces for your target audience. If you want to know how marketing data modeling can help you grow smarter, reach out to our team.