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The Virtuous Data-Driven Marketing Cycle

In today’s multi-channel marketing world, highlighted by the rapid and consequential changes in digital and social marketing, the ability to measure and optimize marketing dollars is harder than ever.  The relative simplicity of measuring brand impact - despite inherent flaws when trying to understand how ad dollars are driving sales - is clearly a thing of the past.  Now, marketers need to inspect their budgets and assess how these budgets, both in aggregate and individually, ring the cash register.  To complicate matters, marketers are faced with the challenge of constantly reallocating their budgets to exploit desirable cross-channel trends, such as email campaigns motivating offline behaviors or iPhone app distribution efforts causing spikes in traffic to certain product categories.  These opportunities are usually fleeting – but can be significant with the proper response that’s measured in hours, not days or weeks.

 

This is reality for today’s marketing executives.  They’re faced with overwhelming amounts of data about their customers and how these customers interact with channels.  They're struggling with how to use this data to increase acquisition performance and how best to manage their customer relationships to increase lifetime value.  On top of these difficulties, they’re challenged with organizational structures that are focused on individual channels, product categories and customer segments, resulting in less-than-impressive responses to changing market conditions.

 

What is needed is a strategy along with a set of tools, technologies and processes that help today’s marketers manage their assets across channels, product categories and customer segments.  And it all starts with a crisp definition of marketing objectives. 

 

While this may seem obvious, too often marketers overlook defining their objectives in specific terms or, worse yet, define them once and casually go about their day-to-day jobs without frequently revisiting objectives or challenging original assumptions.  For example, one objective that most marketers include on their list is to drive Cost Per Acquisition (CPA) lower.  Fine, but what is the specific CPA goal?  Where is CPA today and what percentage improvement does the new CPA represent?  How does this flow into the overall business plan?  Does CPA differ by channel or by customer segment?  Am I prepared to spend more to acquire one type of customer than another?  These are just a sampling of the questions that need to be answered before you can define your objectives with the appropriate level of detail – and only then can you begin to craft your marketing plan.

 

If you succeed in defining your objectives, you’re now ready to define (again with specificity) the steps necessary to hit your numbers.  Gathering data that helps identify current channel performance while gauging future channel trends will help pinpoint opportunities.  Studying and quantifying (to the best of your ability) cross-channel impact should be part of this process.  You also need to study your customer data to understand more about customer segments.  What are their needs?  What are their behaviors?  What is their value?

 

This set of data and insights gives you the foundation to construct a marketing plan that ultimately dictates channel and media investment approach.  Of particular importance is how much investment is dedicated to each channel, how each channel impacts one another and how these channels work together to move customers throughout a purchase funnel.

 

Now that objectives have been established, investments have been allocated, creative and media strategies have been defined and all assumptions have been accounted for, you’re ready to deliver programs in market.  Here is where the majority of the hard work begins.  Measuring results and making adjustments to capitalize on positive trends and minimize impact of negative trends.  This is where most marketers spend the 50 weeks of the year that elapse between strategic planning sessions.  This is where your plans succeed or fail.

 

Unfortunately, this is often where earlier strategies and principles of multi-channel marketing often languish, and you find yourself unable to adjust to the dynamic nature of how consumers interact with your brand.  This is where the annual strategic planning cycle shows its’ weakness and lack of flexibility.  Media plans are too rigid to easily re-allocate.  A creative execution in one channel cannot be modified to work in another channel.  A team structure and skill-set doesn’t allow resources to be allocated to address dynamic needs.

 

This needs to be the place where measurements and outcomes-based decision making dominates the conversation and becomes a daily routine.  This is the domain of data-driven multi channel marketing, delivering a potentially powerful set of tools to adapt to changing market conditions.  This is where the rapid ascent of mobile and social marketing, rather than being a threat that your competitor exploits first, will flourish and become a catalyst for growth.  This is where results drive the next set of objectives, setting in motion a continuous loop of objectives-setting informed and dictated by a constant flow of results.  This is where the annual strategic planning cycle is turned into daily adjustments.

 

This virtuous circle can only prevail in an environment that is able to balance rigor and discipline with change, has the proper databases and marketing automation capabilities in place to manage customer interactions across channels, has an analytics platform that serves up meaningful insights while scouring data for new trends.   Ultimately, if done well, this organic environment is capable of adapting rapidly as the data and market conditions demand.

 

To be sure, this continuous adaptation will be difficult for those marketing organizations that are structured around channel, customer or product silos.  Simply put, you’ll need to change.  Moving from a majority of your team oriented around vertical expertise to a majority being disciplined in cross-channel strategies and tactics will give you much-needed flexibility.  Ensuring that your budgets are equally adaptable will increase your organization’s leverage and productivity.

 

While these changes may seem difficult, the alternative is littered with problems.  Those who put data at the center of their multi-channel strategy will certainly be the winners.  Left behind will be organizations that are rigid and unwilling or unable to rely on data to guide their decisions.

Personalized Curation

We’ve all read about the malaise affecting print publications, particularly newspapers and magazines.  Look no further than the number of pages in The Chicago Tribune and the various stories about print publications shutting down as evidence of this ongoing industry contraction.  Supporting this fact is a stunning trend - 2008 and 2009 were two of the worst on record for newspaper advertising, experiencing a 40% fall in sales during these two years.  2010 promises more of the same.

 

At the risk of stating the obvious, the content and publishing world is experiencing a tectonic shift.   And with this comes a shift in the flow of advertising dollars.  There are many reasons for this revolution – but nearly all reasons point back to a single underlying trend.  Content is being created by many people, is being frequently distributed and is no longer controlled by a few people at the top.

 

Evidence of this content creation and distribution phenomenon is everywhere.  Video is being distributed by the terabytes every day on YouTube.  Facebook is the largest photo sharing service.  Micro blogging has taken off thanks to the ascension of Twitter.  Location-based content is exploding using services such as Foursquare and Gowalla.  And, most importantly, we’re all constantly connected to our personal content authoring tools via the ubiquity of mobile devices and the feature-rich smart phone.  Consumers are increasingly authoring, sharing and engaging in content creation with other consumers – and increasingly opting out of traditional publishing channels.

 

Publishers and the advertisers that fuel their business are losing control.  Marketers have no choice but to shift more of their dollars online (online ad revenue expected to grow by 10.8% in 2010) to generate brand awareness, drive traffic, convert this traffic and manage their customer relationships.

 

But there remains an untapped opportunity to exploit the content creation trend that also supports marketer’s ambitions…Personalized Curation.

 

The concept is simple.  Giving your customers opportunities to create content that is grounded in the unique personality of your brand and sharing this content with their social graph helps establish your brand with a wider audience.  This User Generated Content (UGC) is rapidly becoming an essential part of the overall brand experience - whether user reviews, opinions, photos/videos of product usage, etc.   And this content is relevant throughout all stages of the funnel from awareness to shopping and from buying to relationship management.

 

Most marketers stop at this obvious stage – dropping UGC technologies into their Web sites.  The smart marketers will extend UGC capabilities to all digital touchpoints to super charge their content strategy.  But really smart marketers will take UGC one step further.  Curating content that is invidualized and doing this at scale.

 

For retailers who have a large SKU base, this personalized curation strategy holds particular promise.  A shopping portal can assemble UGC about relevant products into a single, personalized “catalog” complete with product images, reviews, feedback, product usage tips and customized offers.  And these personalized catalogs can be delivered across the digital ecosystem, intersecting with the consumer whether they come to the brand web site, use mobile apps, navigate to social media portals, etc.

 

For brands with a simple set of product categories, personalized curation remains essential.  UGC from the brand community is assembled and delivered based on behaviors, lifestyle, attitudes and other targeting criteria.  Shopping experiences are enhanced and brand attributes are conveyed to a new audience in relevant ways.

 

Both types of executions need data – customer and visitor data – to fuel this strategy.   Both need content management platforms that gather content from the community of authors, categorizes and organizes this content into targeted modules and rapidly assembles/displays this content into engaging and usable formats.  Delivering across the digital ecosystem in near real-time is yet another requirement of this technology platform.

 

The payoff potential for both publishers and marketers is immense.  Publishers will have content that attracts and engages their audience.  This audience will find the publisher’s content believable and entertaining.  Advertiser money will flow.

 

Marketers will reward their best customers (and encourage more high-value customers) to create and distribute content.  These customers will do the hard work of finding new customers just like them.  These new customers will more likely shop and buy from the marketer and will get hooked on generating content themselves, starting a new cycle of personalized curation.

 

The next generation of marketing automation platforms will make this overall process seamless.  Customer and visitor data will be collected, organized, analyzed and segmented.  Integrated content management platforms will categorize content from the community and display this content in compelling formats based on personal characteristics of the customer.  Campaign management systems will transparently weave offers into highly relevant content, generating unusually high response-rates.  And all this content will be synchronized across the digital ecosystem and tailored to the unique capabilities of each delivery channel – email, sms, mobile web, apps, social, display banners, etc.

 

Personalized curation takes advantage of the future of digital marketing.  Marketers and publishers have a choice – cede consumer attention or take control of the undeniable trends brought about by distributed content creation and distribution.  Repeating what happened to newspaper sales during 2008 and 2009 is not an option.

The Marketing Trio - Social Mobile & Local

Marketing is moving local.  Some would argue it already has.  While this is mostly true, it's also apparent that  merchants are just now beginning to fully grasp the changes brought about by the explosion of social and mobile channels.  And the changes are both profound and undeniable.  Local marketing is experiencing a revolution and massive amounts of marketing dollars are at stake.  This all means the entire value chain - merchants, publishers and consumers - are in for some pretty dramatic changes.

With newspaper ad revenue falling off a cliff and local Yellow Pages advertising is questioned, merchants who operate on a local level are being forced to redefine the marketing strategy.  And this is not limited to mom and pop shops, restaurants, boutiques, car dealerships, dentist offices, etc.  Operators of venues that host sporting events and concerts are inextricably linked to local marketing.  Even big box retailers like Target and Best Buy are focusing on more effective local marketing efforts to generate foot traffic.  All of these retailers are questioning the value of their traditional advertising and promotional strategies, impacting their manufacturer partners who participate in these promotions, concert promoters and sports franchises, print shops who product circulars and all other participants in the value chain.

These macro issues along with the meteoric rise of local marketing service providers that leverage social and mobile channels are reshaping the industry.  Google, Facebook, Groupon, Foursquare and an array of followers are flooding the market with compelling products for merchants to drive demand in new and innovative ways.  Group and flash buying, click to talk, location based services that send deals to your smart phone as you're walking by a store or venue are all promising unprecedented return on advertising spend, delivering measurable results that enable merchants to fine-tune their marketing plans.

But this tectonic shift in the local marketing services landscape is causing merchants to lose focus and fragment their efforts.  Moving from a relatively simple model of local radio, newspaper and Yellow Pages is now significantly more complex.  Local merchants now need to spend time learning and understanding all these new tools, dealing with multiple sales organizations and sifting through reports that are often inconsistent and difficult to decipher.

All of this confusion means that merchants are ironically setting themselves up for dissatisfied customers.  What merchants really need are integrated solutions to control demand levers, delivering customers to their front door based on a number of criteria.  Looking to move distressed inventory?  Merchants need tools that can find bargain shoppers and deliver them to their front door in highly targeted ways - e.g. product specific offers with quick expiration dates for hard goods while controlling hours/days for services-based merchants.  Looking to appeal to your best customers to increase their loyalty or sample new products in adjacent categories?  Tools that find these customers and target offers that have fewer restrictions is the answer.

So while merchants and consumers have many more available options, local marketing service providers need to make it simpler for both sides of the equation.  The organizations who understand this and take a leadership role in providing integrated services will be invaluable to local merchants and will attract a loyal consumer following.  Those who keep their heads down and focus on their single slice of the local marketing world will find it increasingly difficult to add value.

In all likelihood, there will be two approaches to this integration.  Individual service providers will reach out to others - or will be acquired - forming solutions that deliver transparency to the local merchants.  We're seeing evidence of this with newspapers like boston.com hooking up with BuyWithMe.com to power their Deal of the Day.  We'll also see the emergence of agency-like firms who will act as the buffer between merchants and marketing service providers, offering strong competencies in acquisition, customer database management and channel optimization.  And we'll see a hybrid of the two - local agencies dealing with aggregated marketing service providers.

Either way, local marketing that's powered by social and mobile media is here in a big way.  Merchants would be wise to get their feet wet and begin to understand how mobile and social can factor into their marketing strategies.  Local marketing service providers should seek out complementary partners to help simplify the process for merchants.   Consumers should sit back and see how this all unfolds, naturally migrating towards brands who harness the power of new media, provide value, deliver relevant experiences and add simplicity.

What's not an option for merchants is expecting that yesterday's marketing strategy will work in the future.  That will be surest way to become irrelevant.

Cognitive Anthroplogy and CRM

I was talking to a client recently about mobile opportunities and the conversation turned to how to take authoritative content and deliver this content in a way that enhances the user experience.  As luck would have it, I also read a post from Bob Deutsch that speaks to this very issue.  He observed that

"Mobile devices are always with us. They are handy or in our pocket, and become part of our body and image. This makes them different. It makes them intimate and unique for helping people establish a firmer footing." 

Read Bob's full post here http://www.mobilemarketer.com/cms/opinion/columns/5678.html

When I consider this notion of how integral mobile devices are in our lives - and the opportunity this represents for marketers - I immediately turn to the art and science of personalization.  In the case of my client who has unique and high-value content, this can either be delivered to the customer without regard for who they are and the value they represent.  Or this content can be tailored to the unique characteristics of the individual, considering their behavioral attributes, their value to the brand, their demographics, their psychographics, their lifetstyle.  I think it's clear which method of delivery would have more impact.

Easier said than done.  Developing a mobile marketing strategy and finding technology that can harness the richness of your content is hard enough.  Delivering this on top of a CRM platform that leverages all other touchpoints into a single integrated brand experience is a daunting task.

Fortunately, marketing automation platforms are picking up the slack - and that's reason for hope.  I've come across mobile service providers offering CRM platforms that integrate with existing campaign management tools - which partially solves the problem.  At least you'll have a path to personalizing content delivery through mobile channel.  Getting data synched up and ensuring that a single rules engine governs all interactions across channels will continue to be a problem.  But it's better than content that lacks relevance to the customer.

I'm also encouraged by the leading CRM and campaign management providers like SAS, Epsilon, Siebel, Aprimo, Unica and others who are building real-time decisioning capabilities that span multiple channels. Mobile marketing will stress the boundaries of these systems given it's uniqueness like location-based marketing, coupon deliver and redemption - a bona fide real-time communications platform.  In order to address this need, you'll see the big CRM firms acquiring mobile technology providers in the same way as we've seen acquisition of email service providers by these same firms.

There's broad consensus on the importance of mobile devices in our lives.  The potential for marketers cannot be overstated.  Whether you choose to "get something out there" or launch your mobile strategy to marry with your CRM platform is less the issue.  But if you have no plan to integrate mobile with the rest of your channels into a single ecosystem that delivers personalized, relevant content experiences, you're surely missing the point...and the opportunity.