- Category: March - April 2009
Millions of marketers, who faced with dwindling budgets and constrained resources, are engaging financially challenged consumers in an ever-growing, cluttered and competitive media environment. A recent CMO Council survey of 650 senior marketers1 found that 76 percent of respondents believe they are not realising the full revenue potential of their current customers. Major obstacles for this included lack of real-time data and analytics that captures insights across all customer touch points, and information not only being selectively gathered, but often inaccurate or incomplete.
As in the economically challenged early 1990s, direct marketing is ideally positioned to play a major role. The difference now is that marketers must embrace the digital landscape and successfully integrate these channels with other media. If we have learned anything from the proliferation of social media channels, it is that relevance is essential and engaging customers individually is critical in deepening customer loyalty and creating customer advocacy. For marketers this means using data and customer insight to drive measurable actions to add significant value through better customer engagement.
So, how would marketers get started on their smart customer engagement strategies?
Strategy 1: Utilise customer lifetime value to drive strategy
Marketers first must decide what matters to their company in terms of lifetime customer value. Track purchase history and measure value in tangible ways work for your business. Look at what customers are buying and determine how to adjust your marketing and product mix to spur continued purchases. Since this process requires concentrated analytical effort that can stretch internal resources, marketers should consider working with a marketing partner that understands your business, possesses core data assets, and can help you field and analyse campaigns.
To get a more well-rounded and realistic view of how customers are behaving, more marketers will match their customer segments to third-party data sets that are rich in consumer transactional behaviour and demographic information.
Strategy 2: Maximise your marketing mix
Today’s customer use multiple channels to shop, research and browse, so understanding these behaviours and their specific purchase triggers will help you optimise the marketing mix. Integration of various channels at different stages of the customer buying cycle will drive a more consistent and persistent message. However, it is also critical to respect our customer’s preferred contact channels.
2009 sees more emphasis will be placed on financial measurability. This will cause a decrease in the use of channels that are not easy to measure in dollars, such as public relations and trade shows, and an increase in more financially transparent mediums, such as email.
Strategy 3: Listen to your customers
Getting the information you need to target customers successfully means you must make it easy for them to tell you what they want. To encourage this, explore the possibility of providing an added incentive such as discount coupon or special offers for customers who fill out an online form or submit their information.
Customer service representatives can also serve as great preference-collection vehicle. Provide your team with a set of short, well-planned questions, and make sure the calls are recorded and the data is entered in real time.
Strategy 4: Re-engage lost customers
Another smart, low-cost marketing tactic is to reactivate old customers. It is easy and inexpensive to profile a segment of former customers to see who has similar attributes to your best current customers and then approach them with a tailored, high-value offer.
Marketers can merge Web analytics with email marketing to track detailed events on your site, such as page views or registration form completions, and set up specific rules to send relevant and timely emails accordingly. You can even add elements of personalisation and define customer segments by online behaviour, such as “browser”, “buyer” and “abandoner”.
Strategy 5: Become more personalised, relevant and precise
Marketers need to embrace the use of one-to-one marketing. Implementing advanced technologies to address the ultimate challenge of sending the right offer, to the right person, through the right channel, at the right time has become a requirement for successful cross-channel marketing campaigns.
Thanks to advances in targeting software and methodologies, disparate information can be more easily captured in marketing databases than in the past. By breaking down the targeting system and utilising information effectively, marketers can simplify a contact strategy plan – from customer acquisition to retention.
Strategy 6: Use social networking techniques to inspire brand ambassadors
Today, online content and blogs strongly influence purchasing decisions. According to a recent study conducted by JupiterResearch2, “blogs factor into stages of the purchase process – over half (52 percent of those surveyed) said blogs played a role in the critical moment they decided to move forward with a purchase.
Using conversation and mapping tools tell marketers what your customers are saying about your company, whether it is positive, negative or neutral. These tools also let marketers pinpoint the most important forums, bloggers or influencers. Acquiring this type of valuable intelligence provides a basis for developing an effective word-of-mouth communications plan. Mobilising influencers and allies to promote your company will help ensure that you are communicating effectively with your most profitable customers and prospects.
Marketers will put more of their dollars toward social networking in 2009. JupiterResearch predicts that 26 percent of marketers will implement budget increases of 16 percent or more for social networking in the next year3.
Strategy 7: Employ customer segmentation and behavioural targeting techniques
In addition to leveraging custom surveys and syndicated research to develop actionable segmentation schemes, look at Web trends and analytics for a real-time understanding of consumer behaviours, and tailor your marketing initiatives around this insight.
For example, during these tough economic times, cooking at home versus going out to eat has become a good way for many consumers to save money. Recent data from Experian® Hitwise® confirms this trend — showing that visits to grocery Web sites went up 29 percent between October 2007 and October 2008 and visits to coupon Web sites were up 27 percent in the same period. Based on this behavioural analysis, companies that provide complimentary products and services like recipes or movie rentals can focus their messaging and advertising for greater return.
Strategy 8: Measure, test and adjust your programs for greater return
Measuring marketing value is not only good practice; it is critical to ensuring adequate funding and resources. While you need to measure basic statistics like customer satisfaction and loyalty as well as specific campaign results, you will improve marketing performance only by testing creative, message and offer combinations to determine which methods are the most effective for your target audience.
Determine your specific goals, and carefully monitor the measurable elements that directly affect these goals. A common problem is that companies get so caught up in examining multiple metrics that they lose sight of how to apply the metrics. Identify what is most important for your business, and employ a testing methodology that will lead to fast, effective decisions.
Rather than simply scaling back to fit the mold of today’s unfavourable economy, take charge and find new opportunities for expanding your understanding of and communication with customers. By working smarter and using data and customer insight to drive measurable actions this year, your business can emerge victorious and be better positioned for the years to come.
by Glenn Parker, Managing Director of Marketing Services Asia Pacific, Experian®
1 CMO Council – “Routes to Revenue,” 2008
2 JupiterResearch – “Harnessing the Power of Blogs,” 2008
3 JupiterResearch – “Social Marketing Scorecard, 2008: Evaluating Current and Future Spending”