Data-driven marketing refers to the marketing insights and decisions that arise from the analysis of data about or from consumers.
The data may be secondary, for example, tracking online social interactions, web browsing behaviour, online search behaviour, or primary such as data collected directly by surveying consumers.
With the advent of online consumer panels and resources such as Amazon Mechanical Turk and online survey design tools, such as SurveyMonkey and Qualtrics, companies are able to collect input from hundreds or thousands of consumers within hours and with a very limited budget.
One popular tool for measuring consumer preferences for specific features of products or services is conjoint analysis. This is a questionnaire asking consumers to react to various hypothetical products or services defined as “bundles” of attributes.
Statistical regression analysis then provides numerical estimates of the value placed by each respondent on each of these attributes. These estimates may be used to forecast market shares for various hypothetical products, to compute the premium that may be charged for various features, and to design products and services that will maximize the company’s profit.
A rigorous conjoint analysis survey with a representative and significant sample of consumers may now be administered and analyzed in a very limited time, for example in less than a few days and with a very limited budget such as less than a few hundred US dollars.