#12/25: Data-Driven Marketing

Data-driven marketing and marketing metrics start with the principle of keeping score for all major marketing activities.

Marketing budget falls into:

  • Demand generation marketing
  • Branding and awareness
  • Customer relationship
  • Shaping markets
  • Infrastructure
  • Low performers invest 4% less than average on marketing
  • High performers invest 20% more than average; more on customer relationship, branding and infrastructure
  • High performers increase their budget in recessions


  • Know Yourself: Strategic Objectives
  • Know Your customers: Database & Analysis
  • Segment your Customers: Selection & Targeting
  • Data-Driven Marketing: Campaigns
  • Build Trust: Privacy Issues
  • Keep Score: Metrics

How to start?

  • Why should your customer care about data collection?
  • Start small: Walgreens started with a regional store op VP and found savings of $5m
  • Contential: start with focus groups and find data with high ROI
  • Contential: found out that people don’t like their airline, because luggage misses, flights are delayed – started to sent out apology letters within 12h to these customers
  • B2B market: What is in for your partner? Try to connect directly to the end customer

My point is that if you can measure something, you can control it. In this case, the measurement was the calories consumed and the exercise calories burned. The result was clarity in decision making for what I eat, which meant I lost the weight and ultimately completely changed my diet.

Road map

  1. Design – Objectives, Scope, Metrics, etc
  2. Diagnosis – Balance, Risk, Returns: Insights
  3. Opportunities – for action: quick hits, adjustment
  4. Tools
  5. Process – recurring reviews, etc.

So I asked in my survey research, “Do you outsource the creative component of your marketing?” The answer was that 72 percent of firms surveyed outsource the creative. Insight: The vast majority of marketing organizations are not in the creative content business, but instead manage the process of marketing.

Brand awareness = Ability to recall a product or service

  • Often brand awareness surveys
  • Social media activity
  • Billboards with vanity urls / phone numbers
  • Branded search words

Test-drive = Customer pretest of a product or service prior to purchase

Churn = Percentage of existing customers who stop purchasing your products or services, often measured in a year

Customer Satisfaction (CSAT)

  • Would you recommend this product or service to a friend or colleague?
  • 10 point scale, 9/10 points only count as loyal customers
  • NPS: detractors (0-6) subtracted from promoters
  • You can ask “would you recommend” and “are you satisfied”
  • “How much did you spend in different stores in the last x months?” “How much are you probably going to spend in different stores in the next x months?”
  • “What product or services would you not recommend to a friend?”

Take rate = Percentage of customers accepting a marketing offer (CTR * Transactions CR)

I realized that in marketing it is better to be approximately right than exactly wrong, and I started to appreciate the value of qualitative data.

Financial Metrics

  • Profit
  • NPV (Net Present Value)
  • IRR (Internal Rate of Return)
  • Payback period

ROMI Framework

  • Business Discovery: Understand business and impact of marketing
  • Base Case
  • Costs
  • Upside
  • ROMI impact
  • Sensitivity Analysis


  • Start small and segment
  • Segment customers based on CLTV
  • Compare short term and longterm customer value

WOM = 1 + Number of clicks from recommendations/Number of direct clicks

Agile Marketing

  • iterate fast
  • near real-time data, iterate / measure at least 10 in the campaign period

Analytics Marketing

  • propensity modeling -> what wants the customer next
  • market basket analysis -> what do customers also buy
  • decision trees -> easy to understand

Marketing Campaign Management

  1. Selection of campaigns (scorecards)
  2. Portfolio view
  3. Monitoring
  4. Adaptive learning
  5. Technology


  1. Lack of top management support
  2. Lack of respect
  3. Lack of cross-functional alignment
  4. Lack of employee skill

Data-Driven Marketing is a pretty robust book. The first 50 pages are a short version of the rest of the book. The rest of the book is filled with case studies and anecdotes. It is written very causally which is pleasant. I think that it is a very valuable book if you are new to the idea of using data or want an overview on data-driven marketing.

Reading Kaushik (Part 8): Web Metrics

Web Metrics Demystified

  • Four Attributes of great metrics:
    1. Uncomplex – people have to understand the metric
    2. Relevant – every business is unique
    3. Timely – A fast approximately result is better than a perfect result that takes ages
    4. Instantly useful

Six Web Metrics / Key Performance Indicators To Die For

  1. Conversion Rate: focuses on outcomes, force objectives
  2. Average Order Value: helps you to qualify traffic / campaigns, always see AOV in context
  3. Days & Visits To Purchase: help you measure success correctly, segment
  4. Visitor Loyalty & Recency: engaging experience and marketing campagin effectivness
  5. Task Completion Rate: use VOC
  6. Share of Search: e.g. use Compete, google, hitwise

Brand Measurement: Analytics & Metrics for Branding Campaigns

  • Why are you doing the branding campaign?
  • Measurement Recommendations:
    1. Attract new customers
    2. Share your business value proposition: Visitor Loyalty & Recency
    3. Increase your sales
    4. To drive offline action: measure likelihood to recommend and to make an offline purchase, track phone calls
    5. Introduce your business: measure micro and macro conversions
    6. To snatch up market share of your competitors: Share of search
    7. To position yourself: primary market research, google insights, orbitz

Best Social Media Metrics: Conversation, Amplification, Applause, Economic Value

  • Conversation Rate: #Comments/Replies per Post
  • Amplification Rate: #Retweets/Shares per Tweet/Post
  • Applause Rate: #Favorites/Likes/+1 per Post
  • Economic Value

#8/111: Baked In

What is it about?

Bogusky and Winsor shows different examples for merging your product and its marketing. They present how innovation changed companies and how to improve collaboration between companies silos.

Key points?

Do not disconnect marketing and product development. The product itself should be your marketing instrument, e.g. Apple’s Ipod.


This book offers some great examples of innovating your product and explains how you can overcome these barriers in bigger companies. Although there are some nice inspirations for companies of every size. For example, try the opposite of the status-quo: If they build big, build small (e.g. cars). Or sacrificing instead of adding features.

In conclusion, I really like Baked In because it presents you a lot of actionable possibilities to improve your product.