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How Data-Driven Marketing Benefits Small Businesses

By: Andrew Deen


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In today’s technologically driven world, data has become more available to the public than it ever has been before. From data-driven decision-making in healthcare to data analysis in retail, data has become a vital component of business operations in almost all industries.

As a result of many processes becoming digital over the past several decades, computer technology and the internet have made it easier than ever to track and analyze data. As a small business owner, you can benefit from utilizing your unparalleled access to data in order to market your business more powerfully and effectively.

Here is how small businesses benefit from data-driven marketing.

Data Helps Determine Best Marketing Channels 

When it comes to marketing your business, products, and services, there’s no shortage of ways to get the word out. While this broad ability to market offers many possibilities, it can also make it difficult to determine which marketing channels will work the best for your particular small business.

Thankfully, data can help take some of the guesswork out of the process and make marketing less intimidating. By looking at the data — both your own and that of other similar businesses — you can invest in marketing strategies that have a higher chance of converting customers and providing you with the results you want for your small business.

For example, if you have a local flower shop, you can run various campaigns to see which marketing efforts are the most effective. You may try email marketing campaigns, social media campaigns, and YouTube video advertisements. After running all three for a certain amount of time, you can analyze the data to see which is converting the most customers and helping you reach your business goals and invest more into those channels and less into the others.

Data Can Help You Pinpoint Your Target Customers

When starting a small business, it’s more than likely that you have a preconceived notion of who your target customers are. While there’s a chance that your hunch is correct, there’s an equal chance that your ideas are wrong. The point is, crafting marketing campaigns around target customers which are based on a hunch is a huge gamble that could potentially waste a significant amount of your business’s money.

Data is an effective solution to the problem of determining who your business’s target audience is because it draws upon factual data to test claims. By doing thorough research, you may be surprised to find out that your target audience isn’t who you originally assumed them to be.

For example, if you have a business that sells planter pots, you may be under the impression that the majority of your customers will be older adults who have already retired. By studying the data, however, you may discover that the pots you sell have become increasingly popular among younger professionals and this demographic is actually your target consumer. As such, you’ll be able to tweak your advertising methods to reach your target consumers through channels they use more regularly.

As can be seen, utilizing data to assess your business’s target audience can have an enormous impact on the success of your marketing campaigns. This being the case, taking a data-driven approach to marketing has the power to propel your small business to the next level and make it easier for you to find success with your marketing efforts.

Data Can Help You Customize Customer Interactions 

One of the most impactful ways data can impact your small business is by allowing you to track the behavior of your customers and automate customized and unique messaging. By being able to craft unique communications with different types of customers, you can increase consumer engagement, drive more sales, and cultivate a greater sense of brand loyalty in your audience.

This form of communication is made possible by the fact that almost all online stores, websites, and digital customer interactions be tracked and analyzed. By utilizing this data, you can organize consumers into distinct groups and craft personalized messages for each of these groups.

For example, you may group customers by their locations and what they purchase. If you sell sporting goods, you may craft an email specifically for coastal customers who have purchased surf-related products in the past and give them a report on the waves and recommend a certain product. These personalized messages will imbue consumers with a sense of loyalty to your brand while also providing them with a deeper sense of connection to your products and services.

Data Can Take the Risk Out of Scaling Your Business

When it comes to your small business, scaling up can be intimidating. This stems from the fact that there is almost always risk involved when growing your business’s operations and reach in a significant way.

Fortunately, taking advantage of data can make scaling your business both easier and less risky. By looking at business and marketing-related data, you can make calibrated decisions about scaling your business that have a higher chance of being successful.

Imagine, for instance, that you want to expand your business into a new area and, as a result of having more consumers, invest in more storage space. While it may seem like one has to take a risk, the truth is data can illuminate your small business’s chances of having success in the new area. As such, taking data into account when making significant decisions about scaling your business can eliminate a portion of the risk and make it less scary to take the leap and expand your small business.

Data-Driven Marketing Helps Small Businesses Find Success

As the world has changed, so has the way that small businesses function. While bus bench ads and word-of-mouth may have been enough to keep small companies afloat in the past, today, thriving as a business owner typically involves taking advantage of digital resources. Thankfully, data can help give you the guidance you need to market your small business successfully and grow successfully.

By taking advantage of all of the potent insights that data has to offer, growing and marketing your small business becomes a straightforward task that leaves you feeling confident in your abilities as a business owner.

Published: February 7, 2023

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Andrew Deen

Andrew Deen has been a consultant for startups in almost every industry from retail to medical devices and everything in between. He implements lean methodology and is currently writing a book about scaling up business. Twitter @AndrewDeen14.

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