I recently heard someone say that we are drowning in information, yet thirsting for wisdom. When it comes to data-driven marketing, that pretty much sums it up for many retail business owners. You have access to reports and data on customer interaction, email and web engagement, and business performance, but perhaps you’re not quite sure how to take things to the next level.
For tire dealers involved in marketing, knowing how to effectively make use of the data you have – especially understanding how multiple sources of information can combine for greater impact – can be a bit intimidating.You’re probably already using your data in a limited sense to properly chunk your email or mailing lists into sensible groups for loosely targeted messaging and advertising. But let’s go a bit deeper on a few approaches to see what works for your business.
The Hunter of Big (Data) Game
The difference between using your basic reporting for broad segmentation and using a data-driven targeted approach to marketing can be compared to deer hunting.
Allow me to explain.
A deer hunter looks for evidence of his prey, where the deer have been before. Evidence can include tracks in the mud, bark or branches nibbled off trees in late fall, trails through the brush that lead to a soft patch of matted grass where the deer might bed down for the night. Many a clever hunter sets up a tree stand along the path where he hopes the deer will walk again. He builds it, he stocks it, and then he waits.
And he waits.
If he’s lucky, by the end of the short season, enough deer will have walked near his stand and he will have tagged his quota.
Many marketers operate like this hunter. They use a few basic data points (plus gut assumptions) in the hope of getting exposure to their prey, i.e. prospective customers. In the process, they wait for their marketing message to be repeated often enough to become memorable to consumers, (which can be expensive) or for the person to eventually have a need so the message finally gets results.
While this is a common approach, it’s not always as effective. Let’s use email as an example, hitting “send” and hoping the message resonates with its audience. First, simply getting the person to open can be a challenge, especially if they are not currently experiencing a need or intrigued by the subject line. Unfortunately nothing happens if nobody opens it or if it gets buried under the other dozens of offers they person received that day.
Like the deer hunter in his stand, marketers relying on a traditional email approach are left sitting out in the cold, planning for the next campaign, and learning from their miscalculations. Often, they keep firing off campaigns, taking a “spray and pray” approach, but having the right data to to incremental ROI inform those campaigns gives such hunter-marketers an advantage. Some might say it’s like switching from a shotgun to a sniper rifle with a scope. Instead of waiting around for the deer (or prospects) to come your way by using your data allows you to know with a degree of or increased relevance and targeting, you can know with a degree of certainty that you’re making the hit at the right moment. Instead of hoping and waiting, walk past your tree stand, actionable data can give you the coordinates so you can target them with your message directly, speaking to them in the moment and with greater accuracy.
Top 10 Reasons to Love Data
10. Data makes you smarter – You’ll be surprised what you learn once you start digging into it.
9. Data makes you stronger – Use your numbers and trends to back up your hunches.
8. Data makes you richer – You’re more likely to get higher ROI on your marketing spend.
7. Data saves you money – You’ll also spend less when you know the value of the audience you’re targeting band use more effective messaging to better engage them.
6. Data makes you faster – Having the information helps you stay nimble as a business owner.
5. Data makes you popular – Your customers want to feel special, and data gives you the information to connect more deeply with them more often so they like you even more.
4. Data unlocks your psychic powers – With the right data in place, you’ll be able to forecast the future with increased accuracy.
3. Data gives you reach – Knowing how people prefer to be communicated with and what they best respond to means your outreach will be more effective.
2. Data is flexible – Play with it and leverage it to your advantage, finding new ways to remain both useful and top of mind with those in your community.
1. Data helps you lead – Data helps you map the course to your success, attract and win the customers you want most, and increase confidence in your overall approach.
Where to Begin
As marketers, we talk a lot about data. That’s because when used properly, it helps make everything else you do perform better, especially when it comes to attracting and retaining customers. Social media becomes more effective when your data allows you to sponsor posts to select audiences. Email becomes more powerful when data allows you to build out more relevant campaigns and conversations filled with engaging content. Display ads online get better when a person’s preferences and online behaviors are incorporated into the messaging.
You may already have large amounts of data in the systems that support your organization. Consider these to be business assets. Explore what nuggets of gold are in there – details that can be processed for clearer insights into your customers and better decision-making for your business. Making use of the information doesn’t have to be complicated. In fact, you can start in smaller steps, like using the data in various systems and refining it based on additional available information to help you pinpoint the targeting of campaigns (based on things like calendar, ZIP-code-based demographics, purchase history, vehicle type, past service recommendations, etc.).
You can also look into your reports to help anticipate trends and market to them. Dig a little deeper. For instance, year-over year views on the purchase trends of specific services by defined customer segments can help you with retention on things like seasonal maintenance services, which brings me to predictive modeling.
Predictive Modeling
Predictive modeling is about using your data to define, forecast and anticipate a future behavior that is tied to a specific business goal. Getting back to the deer hunting analogy, it’s better to know where the deer is going to be versus waiting for him to come back to where he’s been before.
Let’s say your data shows that you do very well with alignment work so you want to do more of them. You can look at patterns of consumer behavior – details of those who have purchased alignments from you in the past – to discern the audience qualities, then determine who in your broad base of customers might be most likely to respond to your marketing in the future. It could be based on everything from vehicle age, repair history or demographic data to construction zones and potholes near where they live, making them more likely to need an alignment more often.
Predictive modeling is more about what’s to come in the future versus focusing on reporting on what’s already happened in the past. While the past can inform us about future behaviors, there may be other factors involved. And just because a person behaved in a certain way in the past doesn’t mean they’ll do it again. Note that the bigger the dataset, the better the model.
Begin with the end in mind. Let’s say that you want to build your customer base in your community. Consider the essence of that goal – do you want to get more people in the door, or do you want to sell more of a specific type of service or product, or do you want the people who come to you to be more like your best and most profitable customers? Once you’ve determined what it is you really want, you can dig into the data you have available to identify trends and unifying characteristics of those you wish to target.
Then using that information, you can more efficiently target specific marketing tactics to attract the look-alike audiences (based on the modeling you did of your current customers that behaved in a certain way) with marketing that appeals directly to them. At the same time, you can design campaigns that are more relevant to them as individuals and spend only across marketing channel they tend to prefer, being more strategic in your overall approach. Done well and this can help decrease the amount you spend on marketing and increase the effectiveness of your outreach.
When using this approach, accept the fact that there will be grey areas due to the black-and-white nature of targeting. Some prospects could fall through the cracks if you’re not careful. When you apply hard-cut rules based on data to a group of individuals, the tighter the rules, the more people you’ll have that you may not reach. You’re either in or you’re out. Filtering the overall audience based on four conditions and you might get a group of 2,000. Add four more conditions and that group might end up at 20 – depending on the specific attributes and criteria based on data. But if those 20 people are highly likely to convert and become excellent customers for you, you’ll need to weigh their lifetime value with the initial potentially higher cost of acquisition.
To help adjust for this, it helps to rank the importance of the multiple factors you have in place. Does it matter if they’re of a certain age? Does it matter if they live one mile away versus five? Be strategic. Consider weighing the criteria used based on its importance to your business and to the relevance of your campaign approach.
Just Do It
Tire manufacturers and larger tire dealerships have data scientists on staff (or on retainer) to help with the data that fuels business operations, including advanced marketing. These folks work with various forms and sources of data, applying it to specific algorithms for advanced modeling designed around business goals. But even if you don’t have a team of data-mining experts on hand, you can still get started by understanding how the data you have access to that might align with a business question you’re trying to solve. Start with data based on that past behavior can then be used to predict future behaviors in a specific areas. Try to see where the deer is going next.
The better you use your data, the stronger your results – and the more likely it is that your customers will appreciate you for the service and convenience your marketing provides.
