Data Driven Marketing: Small Businesses’ Ticket to the Top

Jennifer James • Last Modified: February 9th, 2023

How Small Businesses Benefit From Data-Driven Marketing
About the Author
Jennifer James is a freelance writer who speaks passionately about B2B go-to market strategies, digital disruption, online commerce, and small companies.

According to the U.S. Small Business Administration’s Office of Advocacy, small businesses account for approximately 99.9% of all businesses. That’s a massive chunk of the U.S. economy.

While they are high in number, the issues they face are relatively higher, too. 

Nearly 35% of small business owners report ‌that they aren’t generating any profits, with inflation being the biggest of their worries. 

To cope with that, they need to rework their marketing strategy, focus on existing data points, and consider the ones that can drive growth. 

But here’s the thing:

When you're running a small business, making time for anything that doesn't immediately bring revenue into your company can be difficult. However, by dedicating resources to data-driven initiatives, you can reap immediate benefits and serve your business in the long term.

When done right, data driven marketing can benefit you in the five following ways:

Benefit 1: Gain a Deeper Understanding of Your Target Audience

By holistically and granularly using the data, you can continuously improve your marketing strategy and increase your bottom line. 

Data helps you learn more about your customers and find out what they want and need from your product or service. With the help of this information, you can create different buyer personas for your potential buyers. 

Instead of the generic buyers’ personas that stop on demographics, your buyer persona should outline both demographics and psychographics of the key decision makers and influencers.

  • Demographic details can include age, goals, income, race, occupation, and income.  
  • Psychographic details can include personality traits, individual interests, values, preferences, weaknesses, and strengths.

With this knowledge, you have the ability to divide your audience into groups and target your potential customers by providing them with content that addresses their specific problems.

So, data is at the core of everything you do—be it understanding your audience or setting up any marketing campaign.

It helps you deliver the right message at the right time to the right person.

Maureen Condon, the marketing expert and principal at Precision Marketing Group, emphasizes this by saying:

The good news is that creating and using buyer personas does not have to suck the fun out of creating a great marketing campaign. It simply makes the process more strategic and, ultimately, more successful for your company.

as featured on one of the blogs on the Precision Marketing Group.

Moreover, in data driven marketing, things don’t end after the customer makes a purchase. You can use the post-sale data and then implement the RFM method for your small business to analyze the customer values and segment them according to their category. 

Here’s how you can do this: 

  • Recency: When did the customer make their last purchase?
  • Frequency: How often do the customers make a purchase? 
  • Monetary Value: How much have they spent overall? 

You then give your customers a score from 1 (lowest) to 5 (highest) for each attribute (recency, frequency, and monetary value) based on their observed purchasing behavior. The higher the total score, the more likely they will make a purchase again from your small business. 

Benefit 2: Identify the Best Marketing Channels

When you get a hold of customer insights, you can quickly figure out the answers to questions like 

  • What are their buying behaviors?
  • Which social media platforms are they most active on?
  • Where do they consume most of their information? (TV, Books, Blogs, Google searches, etc.)
  • Which platform is delivering the best results?

Data is not just limited to marketing campaigns. It’s beyond that. 

Your website is a great data source, provided you have integrated analytical tools like Google Analytics or Adobe Analytics. You can also put Facebook Pixel on your website, which can help you measure and optimize your marketing campaigns. 

You can use data to see which marketing channel gives you the highest traffic, and then you can optimize it for your business needs. 

For instance, if you run a small-scale haircare business, and your data shows that 78% of your audience is active on Instagram. Will it be wise to run an Ad on Twitter instead of Instagram? Of course not! Running an advertising campaign on Instagram will yield preferable results. 

As a small business owner, this can be the best thing that can occur to you because data gets you out of the guesswork. 

While many people are tempted to target all the marketing channels, data makes you realize that your audience doesn’t hang around equally everywhere.

And you’d be wasting hundreds of thousands of dollars there with little to no results. 

Benefit 3: Generate Better Marketing-Qualified Leads

Suppose you are a small business owner with an amazing store. You’ve stocked up on good quality products, and the pricing is all perfectly figured out. You’re just waiting for customers to drop by your store on their own to make a purchase. 

Things like this don’t happen in the real world! 

For the customers to buy products from you, you must market your business and make it noticeable enough to reach your target audience. So, the more leads you catch, the better the chances for them to convert into paying customers, and data driven marketing does that for you. 

Unlike typical marketing, which may generate irrelevant leads, data-driven approaches help you get qualified leads. Audi is a fine example here. This automobile manufacturing company used LinkedIn to develop a strategy of targeting government-related industries where their prospects were most likely to work. 

And they also used LinkedIn data to target a second segment of high-net-worth individuals for its new A8 model in parallel.

Using LinkedIn as a data-smart lead generation engine for its launch campaign, Audi acquired a video view rate of 35% and a click-through rate of 5.7%

This launch campaign has delivered both on awareness and the number of leads. The engagement we’ve generated and the prospects now in our pipeline put us in a strong position not just for sales of the Audi A8 but for launches of other high-end models going forward.

– Karen Weibrecht, Digital and CRM Manager at Audi Middle East 

In addition, data driven marketing doesn’t revolve around the number of leads generated. Instead, it focuses on MQLs (Marketing Qualified Leads), which, when passed down through a sales funnel, can help you close big deals.

Benefit 4: Establish Stronger Customer Relationships

When you understand how to use data effectively and strategically, you can keep improving what you offer to customers. That’s how you turn them into loyal advocates for your brand, which becomes a foundation for growth. 

Data driven marketing also gives your customers a personalized experience where they feel heard and accommodated. After analyzing the data you have on hand, you cater to all the needs and concerns of your customers.

A study by Khoros shows that 83% of customers feel more loyal to brands that respond to and resolve their complaints.

Trader Joe’s makes a good example here. The company uses a data-driven approach and has an unbeatable customer experience. Their stores have also changed their hours and products based on customer feedback. 

For instance, when their customers complained about the plastic packaging used by the company, Trader Joe’s announced they would start using eco-friendly packaging and stop offering single-use plastic bags.

Also, you can cross-sell and up-sell your offerings once you develop that trust and relationship with your customers. 

Benefit 5: Make Well-Informed Business Decisions

Acquiring data is pointless if you cannot analyze it. 

Good data with poor analysis will lead to wrong decisions. 

So, to help set your business in the right direction, you’ve got to become data-informed. Whether your data is stored in any CRM or spreadsheet, you must ensure that all your data sources are integrated and that they offer visibility into your key performance indicators.

If we talk about a website, you can see how well your landing page is performing, and you can do this by checking variables like traffic and conversion rate. That’s how you can overcome biases and make your small business stand ahead of the competition. 

Once these data-driven decisions are paired with actions and consistency, it will empower you as a small business owner to set actionable benchmarks. 

Through data, you can:

  • Perform predictive analytics about how profitable your business will be in the future based on its current standing.
  • Find the projected income of your small business by multiplying your total estimated sales with how much you charge for each item you sell.
  • Conduct a competitor analysis to build on your competitors’ strengths and weaknesses. So, without repeating their mistakes, you can adopt the good and drop the bad. 

All of this ensures that your business is in a continuous revenue-generating phase—even during challenging inflationary periods.

Small Business Success Stories: The Power of Data Driven Marketing

To help you understand more, here are some of the best examples of small businesses that use a data-driven marketing approach:

Vera Bradley Inc. 

Data-driven Marketing Success Stories: Vera Bradley
Data driven Marketing Success Stories: Vera Bradley
Source: Wikipedia

Vera Bradley Inc. is an American handbag and luggage design company that uses big data and insights to boost its sales through social media and online marketing. 

In recent years, Vera Bradley Inc. has seen an increase in web traffic and brand awareness. The company captured more than 1.2 million customer email addresses in their online customer file, with many of these customers providing age, occupation, and location data.

The company’s annual report states:

This captured information provides us with deeper insight into the products and categories that are in the highest demand and allows us to better target our customers with appropriate messages. We believe these media not only connect us with our fans but also allow us to target them through cross-channel marketing.

– Vera Bradley Inc.


Data-driven Marketing Success Stories: New rue21
Data driven Marketing Success Stories: New rue21
Source: Wikimedia

New rue21 is a fast-fashion retail company based in America. The company has put great efforts into providing its customers with a good shopping experience. For the same purpose, it has started using a data-driven strategy to gather customer feedback.

For this, the company started working with Verint (a data analytics company). According to a case study penned by the company: 

Rue21 modernized its store designs to give customers a new and inspiring in-store experience. Voice of Customer (VOC) feedback was vital in helping the internal customer experience (CX) team identify issues that were causing lower Net Promoter Score (NPS) ratings. 
This data also guided how the team implemented changes, such as improving customer greetings and communication of in-store promotions, delivering a more consultative fitting room experience, and ratcheting up the speed of the cash-wrap process.

As a result, rue21 witnessed a 72% increase in BOPIS (buy online, pick up in-store) orders month-over-month after it improved its customer experience with the help of data-driven insights.

Arhaus Inc.

Data-driven Marketing Success Stories: Arhaus
Data driven Marketing Success Stories: Arhaus
Source: GlobalNewswire

Arhaus Inc. is a US-based retail company that designs and sells home furnishings. The company uses a data-driven approach to select its new showroom locations in the best way possible. 

Its annual report reads: 

We employ a data-driven, thorough process to select and develop new showroom locations. In selecting new locations, we combine data on specific market characteristics, demographics, client penetration, and growth, considering the brand impact and opportunity of specific.

Arhaus, Inc

Using data-driven insights in combination with other business strategies, Arhaus captured a huge number of paying customers, which led to growth and profitability.

We believe that our continued investment in brand marketing, data-led insights, and effective consumer targeting will expand and strengthen our client reach.

– Arhaus, Inc

Momentous Institute 

Data-driven Marketing Success Stories: Momentous Institute
Data driven Marketing Success Stories: Momentous Institute
Source: Wikimedia

This is a U.S.-based not-for-profit institute owned and operated by the Salesmanship Club of Dallas. It has been building and repairing social and emotional health in kids since 1920.

According to Marketing Sherpa’s case study, they adopt a marketing approach fueled by data insights. 

While marketing data traditionally helps organizations increase their sales or visibility, in the nonprofit sector, marketing data is crucial to support direct services.

– Susan Ruel, Director of Marketing Momentous Institute 

When their homepage click-through rates decreased, and more visitors were bouncing off their website their team used website heat mapping to try to understand visitor behavior better. 

The heat map data showed that the visitors had trouble navigating and clicked the wrong buttons.

Their team redesigned the homepage and created a user-friendly interface with easy navigation. 

Once the redesign was launched, the homepage exit rate decreased by 3.5%. This also led to an increase in the click-through traffic from the homepage to Momentous Institute’s direct services, i.e., Momentous School, therapeutic services, and training. 

In a Nutshell 

I hope you get the perspective on how small businesses can benefit from data driven marketing. 

By leveraging data to better understand their target audience, small businesses can create more effective marketing strategies, increase conversions, and drive revenue. With the right tools and strategies, data driven marketing can help small businesses level the playing field against larger competitors and achieve long-term success.

So, if you are a small-business owner who wants to see your business reach new heights of success—nothing should stop you from shaping your marketing strategy based on data insights. 

Start taking baby steps today and see the results for yourself.