Performance Marketing 2.0

Managing the customer’s journey from awareness, consideration and purchase and then onto loyalty and advocacy is the Holy Grail of retail marketing. To unlock its full potential, the journey must be relevant, engaging and seamless, from end-to-end.

The current focus of omni-channel execution is to facilitate a sale by making the retailer channel agnostic, optimizing inventory. That is half the battle, the easy half.

The more difficult half is in optimizing customers. Potential customers are often tough to locate and convince. Thus, many customers can be unprofitable to acquire. In addition, today’s customers interact with brands far more frequently and across more channels, platforms, and programs. This makes it exponentially more complex to manage the permutations of engagement across time, occasion and platform.  Marketing teams can no longer rely on yesterday’s tools, spreadsheets and content calendars to deliver an experience that can maximize a specific customer’s lifetime value. This complexity and its P&L implications keep many CMOs awake at night.

The promise of digital technology has always been well ahead of its practice. It was decades before grocery scanner data, for example, was routinely used for targeted direct marketing. Today, the exabytes of digital tracks created by consumers are similarly underleveraged. Google and Amazon were among the first brands to use their algorithms to competitive advantage. Now, newer technology companies offer the requisite data collection, storage, management, intelligence, and analytics tools to make this capability accessible to specialty retailers.

 

Lift represents a proven approach to help a retailer optimize its customer assets and leverage the available data, small and big. The methodology comes from my colleague Jim Thompson, who started his direct marketing career managing Victoria’s Secret’s first direct mail campaigns, managed Express’ CRM (both analog and digital) and launched its loyalty program ExpressNEXT, and then as a VP in Marketing led all digital CRM program development at American Eagle. The programs he helped create at Express and American Eagle were named “best-in-class” by etail, “digitally gifted” by L2, and were written up in the Wall St. Journal.

We are talking big numbers. One brand utilizing this strategy grew its direct marketing program sales 10X to $500 million; another family of brands grew sales to $400 million; another comprehensive program grew 5X to $600+ million; another new program grew sales by $38 million in its first year.

Lift’s essential elements:

1.  Customer Journey

The customer journey is far more complicated today than, say, fifteen years ago, when customers typically started with an impulse trip to the mall.  Then, the predominant broadcast channel was the store window, the only direct channel was the mailbox. Mobile, digital and social have since fundamentally changed how customers discover and explore brands. Today:

  • +50% of combined brand traffic is digital,
  • +50% of the digital traffic is mobile, and
  • +80% of all new customer traffic is digital.

With the addition of digital, there are many more ways to interact with potential customers and, importantly, more opportunities for her to engage with the brand, creating a myriad potential pathways. Let’s start with one customer journey, a runner named Maia.

  • Maia’s friend likes a Facebook ad for OTL, a running shoe retailer, which causes Maia to click on the link in her feed. This directs her to a tailored landing page on the retailer’s website.
  • Maia browses the OTL site and signs up for email, which triggers thank you and welcome emails.
  • Later, she sees the retailer’s ad on Weather.com featuring one of the shoes she clicked on earlier.
  • These four digital impressions make a substantial enough impression that Maia decides to visit the nearest store to try them on. Starting with a Google search for “where is the closest OTL running shoe store”, her store visit ends with a purchase of the best-fitting running shoes ever and a sign-up for the store’s loyalty program.
  • She soon receives an SMS welcoming her to the loyalty program. A congrats email shows up in her inbox.
  • She then receives emails with running tips, product care, and support from the brand’s running community – not for the next shoe promotion. She downloads the retailer’s app before her next run. Maia is hooked.

This is just the beginning of a long, personalized two-way relationship that’s conducted in a coordinated fashion across email, texts, website visits, digital ads, mobile notifications and loyalty program updates, status and offers.

(For a detailed graphic of this example customer journey from both the customer’s and company’s perspectives that is extended through the customer’s lifecycle, please contact Jim or me.)

Creating and executing these journeys can be tricky.

  • First, every exposure to the brand and her responses and interactions need to be identified, integrated in a single database, and fixed to her coordinates in the customer journey.
  • Then, all the company’s actions need to be coordinated and focused to provide support along the way to the next step in her journey.
  • Finally, the program needs to be capable of supporting multiple, simultaneous journeys. For instance, there’s Matt, the track athlete, and Marissa, the novice – they’ll likely find different entrees and take different journeys.

2.  Single View of the Customer

Maia’s mapping to a particular place in a specific customer journey is dependent on the retailer having visibility to how its actual and target customers engage, shop, and purchase.   Until recently, it was cost-prohibitive to build systems capable of seeing and supporting the entire customer journey. Marketers instead relied on fractured, partial views.

Today, marketing platforms can knit together disparate information from internal systems, big data and 3rd-party vendors to create a single view of the customer. These systems reside on data warehouses hosted internally or externally, or more recently in the cloud.

  • Internal data coming from the retailer’s data warehouse and marketing programs (digital, email, CRM, mobile, as well as data from stores and website(s)) provide a historical view of customer behavior.
  • Big data coming from the site “click-stream,” social, and 3rd-parties show the journey of how customers shop and engage with the brand. For customer acquisition, in particular, big data and 3rd-party sources help understand different entrees and other pathways along a customer journey – which bloggers, social media, search terms and pathways, for example, are most likely find other runners like Maia.

As the name data warehouse implies, these are not dynamic systems.   To get the experience moving, there is a real-time layer between the single view of the customer and the customer-facing platforms.   This layer enables the brand to deliver relevant engaging experiences instantaneously.

  • The customer hub recognizes customers as they interact with the brand and coordinates the other real-time systems to deliver an engaging experience.
  • The real-time decisioning engine meshes everything that was known about the customer with how the customer is currently engaging and identifies the right content and message to serve the customer.
  • Based on the recommendation from the decisioning engine, the content and offer management system accesses the right creative, copy, pricing, and promotional assets and delivers it to the right place (site, app, POS, call-center, or associate device).

The combined capabilities of single view of the customer deliver a relevant experience and engage with campaigns when appropriate or needed.

3.  Integrated Strategy

Maia’s example journey with the retailer OTL crossed many channels, programs, and platforms. These need to work in harmony to create an engaging experience, from consideration, shopping, engagement and activation.

Digital and social are key components of the customer’s consideration set. These programs are optimized to support the various paths new and existing customers can take to explore a brand, supported by SEM, SEO, as well as strong social content and communities.

The shopping experience is driven by recognizing the customer and delivering a relevant experience as they shop.   This personalization is then supported with a mix of CRM, email, and mobile.

The last element is to drive engagement and activation with compelling programming and quality communications. The process of mapping customer journeys and considering all the engagement possibilities across media usually triggers new, creative approaches.

For example, one retailer found that customer engagement was strongly correlated with loyalty, so they designed their new loyalty program to cultivate engagement. Customers could earn points, status, and rewards for brand and marketing engagement through store check-ins, product reviews, and social fanning and posts. This new program element not only had a positive impact on retention but also created a virtuous cycle, increasing the amount of positive user-generated content on their site and in social media, which in turn fed the acquisition funnel with more quality content for new customers to discover via Google and social.

The measurable outcomes of executing all three elements (Customer Journey, Single View, and Integrated Strategy) are a larger customer base, higher spend, higher engagement and a longer customer lifecycle.

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Lift is adaptable to the unique needs of your business. Its deliverables are the strategy, programs, and experiences tailored to your customer and your business model.   The scope can range from fixing a single program to optimizing the entire system.

Our team then supports you through the process. We:

  • Build roadmaps and playbooks to support each journey,
  • Sort through scores of technologies to find the right solution,
  • Assist in project management,
  • Reengineer processes to enable real-time experiences, and
  • Optimize programs to maximize performance.

Let us be your advisors to help guide you into this new age of performance marketing.

(Note, this post was co-authored with Jim Thompson, with additional help from Seth Quillin of Building Five.)

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Posted in Brand Strategy, Digital strategy, Ecommerce, Growth, Marketing, Retail Trends