Data is the new black
At this moment, a number of factors are creating opportunities that will
transform marketing: increasingly addressable media, enhanced data
aggregation and recognition, and the increased appetite of “C” leaders
to drive improved shareholder value and accountability into marketing
investments. Direct marketing leaders need to seize the opportunity to
define the value of their assets within the new, digitally connected world
and communicate this capability within their organization. Collaboration
with digital marketers will enable the blending of rich insight and will be
indispensable to achieving the multichannel vision shared by more than
two-thirds of marketing organizations. Data-savvy marketers are now the
cool kids on the block!
addressable media inherently enables the identification and
connection of individual marketing stimulus to response,
thereby making it possible to link audience interaction
across multiple sources. Examples include: email, home
address, or phone number or mobile number.
Leaders crave multichannel solutions today but they can’t execute
68 percent of U.S.-based e-business managers say that their company desires a vision for a consistent, non-fragmented, cross-channel experience, but only 29 percent feel they have the ability to follow through.1 Within the same organizations, data-driven marketers have been investing in the aggregation, delivery and optimization of programs across an alternate set of channels for generations: call center, point of sale, direct mail and others. Globally, most firms are focused on understanding and enhancing multichannel communication to ensure digital and offline communication support and improve one another in order to provide optimized customer engagement, but challenges remain.
Similar to the dawn of household-level direct marketing which became addressable in the 1980s, digital media holds a similar promise of ushering new, bigger marketing opportunities into multiple channels and should be seen as a similar enabler of direct marketing principles. These new digital channels are becoming increasingly addressable, the sweet spot of direct marketers.
Data is the new black
Direct marketing systems optimize marketing
investment, regardless of channel
As mentioned, direct marketers already operate in a multichannel world. While the channels may not be directly comparable to digital, the concepts of identification, recognition and engagement are consistent and, in many cases, already in place. What is compelling is the ability of these systems to deliver results in a responsible, predictable and cost-effective manner. With nearly three times the channel spend ($45B) compared to digital channels ($17B),2 and with per-impression costs that are dramatically high, direct marketers have demonstrated a strong competence to proactively identify high-value audiences, measure stimulus to response and optimize programs to a high performance standard. For example, the DMA reported in 2010 that catalog efforts delivered an order at an average cost of $75.32, compared to paid search costs of $99.47 per order.3
This isn’t a point to refute digital marketing. Rather, it is an opportunity to demonstrate the effectiveness, predictability and efficiency of direct marketing systems to operate in a multichannel world. If this scenario sounds familiar and is important in your organization, how then can you repurpose and reposition direct marketing assets so that others in the organization will understand and begin to use them with addressable, digital media?
How to position your direct marketing assets
Data-driven marketers should evangelize their assets as necessary to ensure their target audience will have a seamless, comprehensive brand experience and to help shape perceptions, expectations and usage of their direct marketing assets in the new, digitally-connected world. Digital marketing IS direct marketing. What was old is new again!
In order for your organization to succeed in the new digitally connected world, you must;
Communicate the value of the data insight present in your marketing database — Your team has
the data on prospects and customers and the ability to leverage that insight to deliver, measure and optimize highly relevant communications. Digital marketing efforts will need these assets and capabilities to successfully execute a multichannel customer engagement vision.
Advocate the value of adjoining this data with other sources of valuable insight — Combining data
found in digital channels leads to better focused, more intelligent marketing efforts across all channels. Examine the data and response within email, web logs and analytics, cookies, customer support, surveys, coupons and social interactions (if accessible). Completing an accurate picture of customer and prospect interaction with your marketing efforts across these channels will enable richer insight, better segmentation and set the table for enabling coordination of messages.
So, how do you take your marketing database to the next phase of utility in the digitally connected marketing world? You’ll want to build a system which acts and reacts much like a central nervous system in that it is a series of synapses that will send and receive signals about customer behavior and is then able to intelligently recalibrate based on what they do or don’t do. The goal is to remember every interaction and learn. This evolved marketing system has broad ambitions — to not only send signals that influence customers, but also to sense
Viewing and transforming your systems for the digital world
But how does one get started? First off, resist the temptation to embark on a multi-year data warehouse project. This could consume precious cycle time to be in-market with the right solution. In an environment where 37 percent of all advertising is wasted4, this is your opportunity to show incremental gains in the near term. Utilize the data where it resides; call it from its native source.
Assembling all of the pieces
Acxiom suggests that you build this “marketing central nervous system” based upon the following three principles and their respective implementation steps.
1. Build a Data Mart — A data mart approach helps to focus on delivering results with an ROI that can be realized in the near term. This will resound internally and focus the conversation on the value your systems already deliver and ensure you can be in-market with a solution in a matter of months.
Consider the following high-level approach to this data mart that will serve as a multichannel marketing central nervous system:
Gain access to the data by building a logical layer to access it from its source. This goes to the heart of direct marketing as a practice — connection of stimulus to response and the recalibration of efforts designed to optimize response. Integrate non-transactional data. The data mart will benefit greatly by having access to information that includes customer discussion threads, blogs, chat, social and other insights that may be helpful to capturing dynamic indexes of customers and customer segments. Integrate your email database with those who have opted in for email communications and connect it with the CRM data.
Augment your database with the right fields to track individuals as well as campaign elements (campaign ID, incentive used/promotional code, etc.). Build templates with pre-filled forms which the user can correct if necessary. This smaller, data mart approach is more adept and leaves ample flexibility to incorporate additional data sets while remaining nimble enough to continue executing campaigns with the data and insight you have.
Use ETL (extract, transform and load) tools when you only care about certain fields, international domains and as you specify the certain data you care about as you bring it in. This makes the path to insight a lot quicker and a lot less expensive.
Plug in your systems that handle analytics, reports, campaigns and marketing execution data. Take all results and lay them out in a visual dashboard to display real-time results. Cleanse and edit the data mart on a regular basis. This will be critical to keeping the system vibrant and meaningful.
Data is the new black
2. Leverage Data Beyond the Data — The stakes are higher; your system will be viewed by all parties managing customer and prospect-touching programs. Integrating data across channels is a priority for trying to amass the insight necessary to deliver upon cross-channel coordination. Also, as a single point of reference, this system will become the source for segmentation and optimization.
While even the world’s largest brands can only capture a sliver of each person’s life, maybe 1 or 2 percent, information is available that can help fill in the gaps of understanding and increase accuracy in identification and segmentation. Sources will include digital channels as well as third-party insight you may already leverage on the direct side of the house. With a bigger view of each member of your target audience and their response across channels, this enriched asset will be indispensable. Ensure that your digital marketing colleagues can see and understand how to use this insight. This is critical to delivering a consistent and engaging customer experience.
Perform contact sequencing where you plan out the pace of communications you’ll do in each channel. You need to have some view of your target audience around customer segments such as where they spend time, profitability and predictive analytics so that you can assess propensities, and so forth. It’s presumed that you’ll have a base idea of customer value which you should use to select within segments to develop your contact sequencing as it will give you the ability to drive profitability.
Work with your digital counterparts to help understand how audience lists are built (compiled vs. subscriber lists). Consider quality versus quantity. Invest in this process with great scrutiny. You will want to ensure consistency and collaboration.
Employ analytics and insight via third-party, non-SQL data to expand the knowledge of your customers and target audience while building customer intelligence and insight. Using your regular customer database isn’t enough. While soliciting third parties, work with knowledgeable, reputable data vendors who can offer multiple, flexible options.
3. Assemble the Execution Engine — Here’s where you’ll connect your marketing systems and bring everything to life. Identify the channel pieces you need to have working in tandem; focus initially on low-risk campaigns and have a vision for expansion. With the need for near real-time processing and incorporation of new data as it becomes available, avoid a “big bang” or a calendar-driven approach to capitalize on new assets in favor of a much more dynamic model required to play and add value in the digital space. Focus on being in-market with integration of the highest value deployment channels first.
Multichannel efforts integrate information from other channels in order to better target and engage your audience through their preferred channels. You’ll want to start monitoring, logging and correlating interactions in order to identify patterns which will help you to establish behavior and preferences. This in turn will help you create better offers and timing of those offers, and increasingly refine and hone your marketing efforts to optimize outcomes. Discuss and brainstorm scenarios and examples of where they will be used. For example, you’ll want to understand how direct mail and email campaigns work together simultaneously and how these systems are fully fused where you can fuel the stimulus to the audience, measure their response and take the next step with the right channel.
Test, measure, refine
Perform an active test and run a set of strategies around multiple channels. This is a new tool for your organization. Ensure that all involved parties can see the vision and ability to coordinate the customer
experience. Send out one offer to a random set of people and see what happens. Send a multi-wave campaign with an offer first through one channel, followed up by another channel and another, always measuring the response. You can test campaigns against customer-initiated conversations, measure them against your best customer profiles and map out new customer segments. Test and learn the strategy that you’ve been doing and when you figure out what kind of conversations work for you, bake that into your campaign design. The possibilities will continue to expand as newer features, channels and devices are adopted.
These recommendations can help build a marketing system that pays off remarkably quickly. Several major brands have been able to deploy robust, fully functioning solutions in as little as 90-180 days.
CUSTOMER DATA SOURCES
MARKETING CENTRAL NERVOUS SYSTEM
Enhancements Segmentation 3rd Party Data Transactional Data Closed-loop Response Analysis & Reporting Insight Mgmt. Analytic Tools & Data Marts Campaign
Processes & 3rd Party Apps Client
Marketing Databases
Call the data from its source
Integrated partner ecosystem
Integrate customer data sources and touch points Send and receive signals that influence consumer behavior
Correlate consumer behavior with marketing/advertising across channels over time
Direct Mail
Mobile
Website Email
Display Text Mobile Apps
In-store Mobile Social Media Call Center In-store Networks Connected Devices ITV Custom Media
Data is the new black
Results
Savings Bank Life Insurance of Massachusetts blended customer data with third-party insight to help craft
complex “life stage” segments of their target audience. Engaging their audience in a coordinated, multichannel fashion with a personalized communications approach helped them exceed their leads-to-customers by 123 percent at a lower cost per lead against budget cuts in marketing and sales while also introducing prospects earlier in the buying process. They reduced cost per lead and increased profit in less than 120 days.
Rodale is an American publisher that executed the right sequence of campaigns to their base by blending
offline and online data with flexible business rules. They ran a series of 100 or more email campaigns simultaneously, seamlessly moving customers from new acquisition campaigns to cross-sell/up-sell opportunities and into maintenance or reactivation campaigns. Each customer experiences a unique conversation, tailored to their individual interests and the system suppresses products they’ve purchased or opted not to receive offers on. Rodale defines a unique rhythm of customer contacts and “rests” for each campaign, providing the ability to communicate daily with new acquisitions and less frequently but still regularly with longer-term customers. This segmentation allowed them to increase the number of products they promote from 23 per month to 151 per day while seeing an increase in gross orders of 44 percent.
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Conclusion
Direct marketing’s role in digital marketing efforts will evolve as organizations connect the concepts of addressable media to the systems they already have in place. While multichannel marketing is a desire of today’s leaders, direct marketers need to learn these trends and take the responsibility for evangelizing their capabilities within their organization. Indeed, the value of your marketing assets and processes should be evaluated to include benefits outside of the typical direct mail and customer service channels.
Data marketers have great opportunities to build upon their skills, help their organizations succeed in the digital age and advance their careers by taking practical, incremental steps. They can get started now by building a logical marketing system as part of a set of capabilities that marketing will need to embrace in order to succeed in the digital age.
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