WHAT YOU’LL LEARN: How applying data driven marketing helps companies make strategic decisions.
Known as the “father of quality” and one of the foremost thought leaders in business, W. Edwards Deming had this to say, “In God we trust; all others bring data.”
Let’s apply that to marketing strategy by exploring an example of how it contributes to sustainable and effective business development.
A privately held company in the health & human services industry with roughly $4M in annual revenue and 25 employees chose market diversification as its growth strategy. An analysis of the product offering, price points, distribution methods, competitive environment and market potential are critical to success. Such decision-making and the selection of which market to pursue should be based on data.
Company leadership was confident it could achieve growth through new geographic markets; they just didn’t know where to focus. They were new to data driven marketing. Initially, they considered a web site re-design and several other tactical adjustments. However, when doing a SWOT analysis, they realized they needed market intelligence to help make several decisions. The SWOT validated what they knew versus what they suspected.
MARKET ANALYSIS AND COMPETITOR ESTIMATES
This strategy required a data-first approach to identify their market share as well as how much growth they could expect and where to get it. Their marketing partner estimated the size of the company’s market using census data, including an analysis of the broad market, the surrounding territories and an estimate of the share that belonged to their primary competitors.
The analysis shed light on where they should direct their diversification efforts. They learned that the territory they assumed would be ripe for targeting was not a solid as they anticipated and that the surrounding territories had greater potential.
This changed their strategic outlook completely. It pointed them in the direction of the low handing fruit so they implemented a deeper dive into surrounding markets. Because they broke down the surrounding market into three smaller areas, they narrowed their business development focus to higher probability segments. Their marketing tactics became more focused on these segments. And it helped them get a better sense for their marketing ROI and more confidence in their marketing investments.