Data is important, but must like everything else be put into perspective. A wise man said about data: “You can’t operate without it. But you can never win with (only) it”. This is definitely true in marketing and communication. All communication must be data-driven. At least if we mean having data to base our marketing decisions on, regardless of channel or activity. Most importantly, we should refine those data points into information, insights and knowledge.
This means that we marketers should be knowledge-driven – not just data-driven – in at least four areas:
- To understand the company’s business. Key aspects such as different customer segments, willingness to pay, product mix, pricing, and distribution issues are the foundation for marketing that not only sells more, but more importantly, sells more profitably by getting more people to buy more often and pay a little more.
- To understand human behavior. How do people make decisions? And last, but not least, what characteristics, associations and attributes influence us to prefer Brand A over Brand B while thinking Brand A is the better choice, even if it’s a bit more expensive?
- To understand our customers and prospects. Why do those who buy from us buy from us? And why do those who do not buy from us opt out, and what can we do to attract them? What are their needs, and more importantly, what hidden drivers influence their decisions and willingness to pay?
- To understand how different marketing and communication initiatives impact the business. Long-term vs. short-term, emotional vs. rational, broad vs. focused, penetration vs. loyalty, effect vs. efficiency are some examples of key issues where there is a lot of empirical and proven knowledge about what makes the best impact.
One example where data often is misused is defining the funnel or buying journey. First, no person is so rational that he or she takes the step in the funnel one-by-one in a logical order. But the main problem is probably the mistake of confusing the buying journey with the customer journey.
The idea of the funnel is based on the belief that the customer primarily wants advertising for something for which he or she has an active need – because they are in the buying process. But then we miss perhaps the most important part of the customer journey: creating positive knowledge before the need arises and before the buying journey begins.
There is a wealth of data showing that something as basic as (positive) knowledge is the foundation for both sales and profitability. If you do not engage with the target audience until they have a need, it’s difficult to create space to build a positive perception. Instead, you often end up going straight to discounts and price offers as the most important messages. However, if you have already created positive knowledge during the customer journey, i.e. before the need to buy arises, then there are better conditions for converting this into profitable sales.
Do you want to know more about insights, just reach out to ulf.vanselius@comprend.com