Data-Driven Marketing: A Step-by-Step Guide

Data-driven marketing: Cover Image

How many marketing strategy articles have you read and then tried to implement those strategies only to have them kind-of-sort-of-but-not-really work for you?

I’m betting it’s a lot, isn’t it?

Yeah. I feel your pain.

If we’re honest with ourselves, we can see that a lot of business advice out there is really just entertainment dressed up as educational material. I don’t think there’s anything wrong with being entertained while learning something new, but at some point, you have to have an actionable plan.

Data-driven marketing (or quantitative marketing) is your tool to help you do just that in the online world.

Data-driven marketing is simply applying some numbers and very basic math to all the things you do to grow your business. It’s an intentional, smarter approach to formulating, implementing, and tracking your business goals, whatever those goals may be.

This guide covers three major steps in developing a data-driven marketing plan:

Let’s dive right in.

Step 1: Define Your Goal

There are a lot of different ways to go about setting and achieving goals. We’ll use the S.M.A.R.T. goal setting approach to define a goal and then work backwards from that.

This is an important concept to understand when using data-driven marketing: creating a S.M.A.R.T., quantified goal and working backwards from it will help guide you in implementing and tracking strategies to achieve that goal.

Let’s first define S.M.A.R.T. goals and then we’ll get into some examples of what I mean.

A S.M.A.R.T. goal is:

  • Specific: You should make your goal as specific as possible. For example, instead of “get more traffic”, create a goal like “get 10,000 more visitors per month”. This forces you to crystallize exactly what it is you’re trying to do. Creating concrete action steps begins with concrete goals.
  • Measurable: There’s a saying in digital marketing, “If you don’t measure it, it never happened.” It’s only half a joke. If you can’t/don’t set up a way to measure and track your goals, you may as well not even have goals in the first place. How will you know whether you’re progressing or not?
  • Assignable: Someone has to be accountable for progress towards a given goal. That might be you, it might be someone else. But someone must be explicitly identified to carry out the action plan.
  • Realistic: Dream big, start small. You cannot cheat the process of growing a business. You must do it one step at a time. If you have little or no traffic, it’s not realistic to think you can have millions of visitors next month. Start with one visitor, then get two, then 10, then 100, and so on. This has the effect of keeping your momentum and motivation going. Hitting a goal gives you the motivation and confidence to keep going. If your goals are wildly out of sync with your reality, you’ll just get discouraged.
  • Time-bound: Setting a time limit goes hand-in-hand with setting a realistic goal. Give yourself a deadline that’s reasonable but pushes you a little bit. Studies have shown that our productivity expands within the timeframe we allocate for it.

Which goal(s) should you set?

Sometimes it’s easy to know which specific goals you should be focusing on in your business. For example, if you have very little (or no) traffic to your site, well, obviously you should start by trying to get more traffic.

Other times, however, it’s not so obvious. You might, for instance, get decent traffic, but your conversion rate isn’t so great. Should you then focus mostly on finding ways to increase your conversion rate? Maybe, maybe not.

If you’re attracting traffic that isn’t a great fit for your product or service, then you should probably focus on new sources of traffic that have better product-market fit for your niche.

But if the traffic you get is actually your target audience for your product or service—that is, you have good product-market fit—then yes, you should focus on increasing and optimizing your conversion rate.

But how do you answer these types of nuanced questions in the first place?

One effective way I’ve found is by applying quantitative principles to analyze your customer funnel. Specifically, I use the AARRR funnel method.

AARRR funnel diagram

Everyone who comes to your site is engaged at one level or another on this funnel, whether you know it or not (hint: you should know it).

You can and should use this framework to identify goals you want to pursue in your business. You can just pick one of these levels to focus on and set a goal for that. Nothing wrong with that at all.

In fact, if you’re just starting out, that’s exactly what I’d do. Pick a funnel level and create a S.M.A.R.T. goal for that.

Some examples, for each AARRR funnel level:


  • Get X number of visitors
  • Get X number of visitors from social/search/referral/direct/etc.


  • Get X email signups
  • Get X new free trials
  • Get X new leads from forms


  • Increase number of active users by X%
  • Reduce churn rate by X%


  • Increase sales to $X
  • Increase average order size/amount by X
  • Reduce cart abandonment by X%


  • Get X visitors from guest blog posts
  • Get X new free signups from referral programs

These are just a few examples. You don’t need multiple goals for each level of your funnel. In fact, I’d recommend focusing on just one at a time when you’re getting started with this. The point is to keep it simple so you can stay focused and really work at your high-impact goals.

Take a Holistic Approach

I’ve also developed a method I like to use that allows you to analyze your funnel in a holistic way to spot opportunities for growth. This works for sites that have some traffic and have had Google Analytics set up and collecting data for at least a little while.

Here’s what I use:

Analyze your funnel report

If you haven’t already, you can get a free copy of the report and some instructions on how to start using it to analyze your funnel, spot growth opportunities, and create S.M.A.R.T., actionable goals for your business.

Whatever approach you take, the bottom line for virtually every single business out there comes down to a simple formula:

Sales = Your Traffic x Your Conversion Rate

So essentially, there are two ways to increase your sales (or any other conversion you’re targeting): 1) you can increase the amount of traffic you get; 2) you can increase your conversion rate.

Everything you do in your business aims to do one or both of those two things, directly or indirectly.

Think of how the goal(s) you came up with fit into this equation.

Because now we’re about to create a plan to make those goals a reality.

Step 2: Create an Action Plan to Achieve Your Goal

Once you have a goal picked out, the next logical step is to create a plan that gets you closer to that goal. Again, considering our equation from above, what can you do, starting right now, to start working towards your goal?

I’ll show that equation again because while I know how dead simple it is, it’s also extremely important:

Sales = Your Traffic x Your Conversion Rate

The amount of traffic you get and your conversion rate are levers you can tinker with to increase sales and put more money in your pocket. The AARRR funnel is really just a focused way of tinkering with these levers.

So once you pick a goal for an area of your funnel, you simply come up with tactics that will likely lead to progress towards achieving that goal.

That’s it.

This is your chance to experiment and try new things. See what works, and what doesn’t. The important part is that you learn the difference between what works and what doesn’t. (More on that in the next section.)

Let’s illustrate this with some more examples:

ACQUISITION: Increase organic search traffic to 5,000 users per month in next 4 months
  • Write 5 blog posts based on keyword research analysis
  • Write 3-5 personal emails per day to influencers in my niche each day asking them for backlinks
ACTIVATION: Get 500 new email signups next month
  • Create new minicourse lead magnet
  • Add opt-in forms to relevant blog posts and pages
RETENTION: Increase number of active users to 5,000 per month in the next 6 month
  • Write education email series and set up autoresponders
REVENUE: Decrease cart abandonment rate from 40% to 30% in next 2 months
  • Streamline checkout process and remove unnecessary steps
  • Add 30-day money back guarantee
  • Add PayPal payment option to boost trust
REFERRAL: Increase referral signups by 20% in the next 4 months
  • Create new refer-a-friend program to incentivize “word-of-mouth” signups

This is nothing new or revolutionary. I’ve simply taken the idea of a customer funnel and presented it in a more actionable way.

Now let’s make it measurable.

Step 3: Measure Progress Towards Your Goal

All of the planning, goal setting, and even action taking is pretty meaningless if we have no way to know whether or not what we’re doing is working. And that’s where our analytics come into play.

Sometimes we can measure our goals in a straightforward, direct way. For example, say we have a goal to increase organic search traffic to 5,000 visitors per month in the next 6 months. We decide to write 5 blog posts designed to get organic search traffic. It’s pretty easy to tell whether or not we’re making progress and ultimately achieving that goal, right? You just look at your Google Analytics account, segment your data to only show organic search, and there you have it. You either hit your traffic goal or you didn’t.

Other times it’s not so straightforward and we have to use “proxy” measurements. A good example is measuring engagement on your site. “Engagement” can mean a lot of things and there’s not always one good way to measure how engaged your users are. Instead, we have proxy measurements that give us some indication of how much users are interacting with our content and products.

For example, we can measure how many pages per session the average user views. We can measure the number of audio downloads or number of video plays. Email opt-ins can be a measurement of engagement.

Each of these, however, only gives us an indication of user engagement. We don’t actually know if the visitor read every single word on a blog post or paid attention to every second of a video or audio they played or did anything with a PDF they got by giving us their email address. We only have a rough idea of these things.

Choosing the Right Metrics

This is why it’s so important to know which proxy measurements are best for your business. Content consumption like pages viewed and email opt-ins for a free PDF might be a great measurement of engagement for you if you have a content-heavy business. It likely means people enjoy consuming your content, and that, in the long run, could be good for your business.

On the other hand, if you have a business that doesn’t depend as much on content consumption to generate revenue, well then, those might not be good metrics to use at all.

The point is to drill down and select the most important metrics that, in one way or another, add to your bottom line. These are called “Key Performance Indicators” (KPIs for short).

If you’re trying to sell through paid ads on social media, then traffic and conversion rates from paid ads is obviously a valuable KPI to monitor. If your email list drives a lot of sales, then tracking new email signups is obviously an important KPI for you.

Using Segmented KPIs

We’d also like to know if our specific efforts—our action plans from the previous section—are actually working. We do this by segmenting our data.

Segments are just horizontal slices of our data that help us make more sense of what’s going on. You can have audience segments (e.g., only mobile users), acquisition segments (e.g., only traffic from social media), behavior segments (e.g., only users that viewed 3 pages or more), and conversion segments (e.g., only users that signed up for a free trial or users that purchased from you).

Let’s take a look at the examples from above and come up with some KPIs and segments to track them:

ACQUISITION: Increase organic search traffic to 5,000 users per month in next 4 months
  • Write 5 blog posts based on keyword research analysis
  • Write 3-5 personal emails per day to influencers in my niche each day asking them for backlinks
  • KPI: Traffic from organic search
  • Segment(s): Only the 5 URLs for the articles written for this search traffic campaign
ACTIVATION: Get 500 new email signups next month
  • Create new minicourse lead magnet
  • Add opt-in forms to relevant blog posts and pages
  • KPI: Email opt-ins
  • Segment: Only opt-ins from minicourse lead forms
RETENTION: Increase number of active users to 5,000 per month in the next 6 month
  • Write education email series and set up autoresponders
  • KPI: Number of active monthly users
  • Segment: Traffic from educational email campaign
REVENUE: Decrease cart abandonment rate from 40% to 30% in next 2 months
  • Streamline checkout process and remove unnecessary steps
  • Add 30-day money back guarantee
  • Add PayPal payment option to boost trust
  • KPI: Cart abandonment rate
  • Segment: Specific cart page(s) used in checkout process
REFERRAL: Increase referral signups by 20% in the next 4 months
  • Create new refer-a-friend program to incentivize “word-of-mouth” signups
  • KPI: Number of free trial signups
  • Segment: Traffic from refer-a-friend campaign

You essentially now have complete measurement plan. The final step is setting up tracking so you can measure your progress towards your goals.

Set Up Tracking to Measure Your Progress

You can do this in a number of ways. Google Analytics has straightforward, very accessible reports for many of the most important metrics of most businesses.

You can also make custom reports in Google Analytics, which along with a dedicated goal tracking spreadsheet is my preferred method. Let’s use the acquisition example from above: 5,000 monthly visitors from organic search in four months.

Let’s say we currently have about 2,500 visitors from organic search per month. Our goal, then, is to double that monthly traffic in four months. We obviously don’t expect to just publish some search-optimized articles and start getting double the traffic right away. It will take some time, so we need to not only track traffic over time, but we need to set reasonable milestones along the way to make sure we’re on track.

I do this with a spreadsheet using the “backward” method. That is, I start with my goal and work backward from that. So I want 5,000 search visits per month, which translates to roughly 1,250 visits per week (about 180 per day). I currently get about half that, around 625 visits per day (about 90 per day).

I’ll set some weekly goals that I can follow and track my progress regularly. I could do daily tracking, but honestly, that’s overkill for something like SEO, which takes a while to see results. So I set up a spreadsheet that looks something like this:

Data driven marketing: Search traffic tracking spreadsheet

(I actually like to keep a spreadsheet for all goals and create a new worksheet for each goal or goal set.)

I need to increase search traffic by an average of about 5.5% per week to hit my goal here. By working backward from my goal like this, I can set up a tracking mechanism like this to help me know whether or not I’m on the right track.

Next, I’ll need data from Google Analytics to fill out this sheet. The easiest way to do that for this example is by viewing the default Organic Search report (in Google Analytics, go to Acquisition > All Traffic > Channels > Organic Search). You’ll note I changed the graph metrics from Users to Sessions and from Day to Week to get weekly figures.

Data-driven marketing: Search Traffic Google Analytics report

For each week, I can simply enter the number of sessions from search shown in this report into my spreadsheet above.

I could also save this as a custom report as well so it’s readily available to me and/or apply filters so that only the data for the SEO articles I create are shown.

And if you’re really into spreadsheets, you can use the Google Analytics Add-on for Google Spreadsheets. This allows you to automatically import your Google Analytics data into a spreadsheet, giving you more control over which data you see and don’t see. There’s a bit of a learning curve to it, but it’s also a preferred method of mine. I would say that most people don’t need it, unless digital marketing takes up a lot of your time.


A solid measurement plan is the foundation of a data-driven marketing strategy. Data can help us immensely when we’re trying to make smarter decisions about our businesses, but only if we use the data intentionally and in a focused way.

If you’re ready to really nail down your own data-driven marketing strategy, check our course, Web Analytics for Real People.

You’ll learn how to use your analytics data effectively so you can stop wasting time poring over reports and start making smarter decisions about your business with confidence.

Check it out.