Why Is Data-Driven Marketing Important? Benefits & Challenges

Data-driven marketing is a technique used by companies in which they research across huge databases using data-driven marketing tools created through the customer's preferences and product suitability for coming up with a solid marketing strategy.

Importance/Benefits

1. It helps you to get integrated details about your customer, where they are, what they want, and their age group, and it helps you to target your consumer precisely.
2. Comes up with an opportunity for product personalization. To reach the maximum number of consumers, these types of marketing techniques will motivate companies to invest more in the personal preference of the customer.
3. Provides a space where there remains a perpetual cycle of growth of the company through data-driven marketing.
4. Helps in better transmission with the customer and catering to their needs as per their demands.
5. Helps to reach out to the consumer base, which was untouched but not accessible using data-driven marketing analytics.

Challenges

1. The biggest challenge of all remains the collection of the required data, which is at the same time rich in quality and authenticity.
2. Then comes the challenge of unification of such huge data and classifying it according to the needs of the company.
3. Harmonization of the data is another cumbersome process to go through because the purpose for data for which the data is collected might differ from yours, and that's where the task comes to neutralizing the data.
4. The most crucial of all is the interpretation which is a challenge in itself because it is upon the interpretation of the data on which the success of your data-driven marketing strategy depends.
5. Last but not least, keeping the data up-to-date and working with real-time data.

Consumer demand since the last decade has been ever-increasing so at this juncture, for a company to do good data-driven marketing seems a very feasible option to survive in this competitive business arena. At the same time, privacy of data should not be neglected.



Location: Switzerland

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