Data-Driven Marketing Strategies to Watch in 2010

As we move further into the new year, a number of industry thought leaders are asking if the recent economic downturn marks the beginning of a “new normal.” Marketers have become very accustomed to the requirement of doing more with less.

After all, who hasn’t had their budget cut with zero change in revenue goals? But in 2010, do we need to also face the reality that the shifts in consumer priorities and spending that we’ve all experienced are not temporary?

An essay in the March 2009 issue of McKinsey Quarterly suggests that, “We are experiencing not merely another turn of the business cycle, but a restructuring of the economic order.”¹ Is the consumer focus on simplicity and spending less here to stay?

And if so, does this signal an opportunity for more sophisticated, data-driven marketers? Will a relentless focus on data to better understand consumer needs, attitudes, and behaviors in this tumultuous environment better prepare marketing organizations to not only survive, but also thrive?

The truth is, data on its own is nothing.

The power of data is in its translation into key insights within an integrated framework that balances data, technology, and creative. An integrated approach facilitates the delivery of tightly orchestrated campaigns that provide a consistent customer experience across all touch points with creative that connects and resonates with consumers.

Focusing on a “sweet spot” (whether it be data, creative, or multichannel delivery) all too often creates a “blind spot” hindering the development of an integrated, data-driven marketing strategy.

In 2010, data-driven marketing strategies will become the main source of a sustainable advantage. Marketers will be looking at data more broadly while considering the lens of the consumer in the “new normal.” By embracing a more integrated approach to strategy development, marketers will be able to establish the foundation for success. This means using data and customer insight to drive your efforts both internally and externally.

There are seven data-driven marketing strategies to watch in 2010:

Strategy #1: Move Customized Messaging Multichannel

Marketing organizations will begin expanding the use of consumer profiling and behavior modeling to trigger customized messaging across multiple channels.

Consider, for example, Best Buy’s use of customer personas to train in-store employees. When Best Buy’s training manual leaked over a year ago, many were disturbed by their method of customizing the sales experience based on customer profiles. Now, most tout it as the future of retail.²

Marketing Companies are also benefiting from call centers’ adoption of intelligent and in-context business process management (BPM) engines to guide customer service representatives on messaging when servicing a customer. These tools keep the customer service representative on message and aligned with the needs of the customer.

With many organizations shifting priorities to retaining customers and enhancing existing relationships, call center interaction is one area that cannot be overlooked.

Strategy #2: Incorporate Web into Your Cross-Channel Analysis

To better understand customers, marketing organizations are focusing on integrating Web channel information with offline channels. This information better equips them to optimize cross-channel marketing activities, informing allocation of spend, channel mix, messaging, and cadence of communication, etc. The following are examples of successful integration projects identified by Gartner researchers:

• Use customer demographic and purchase information from Customer Relationship Management (CRM) and transaction systems, along with inventory data to personalize online content and special offers delivered on your Web site.
• Assign campaign attribution across multiple channels based on touch points and activity once a customer has met a business goal (e.g., purchase, renew, engage).³

Gartner cautions that cross-channel integration is difficult and “requires alignment between the channel business units and those with business intelligence and data integration skills.” As such, Gartner suggests starting with small, well-defined cross-channel analysis projects before investing in large-scale integration projects.³

Strategy #3: Accelerate Access to Data in Order to Drive Increased Revenue

Having access to data creates a distinct advantage; having access to data in real time is a differentiator and separates the leaders from the followers.

Imagine the power of being able to identify lapses in customer engagement in real time to trigger reactivation programs earlier in the life cycle. Imagine being able to analyze your data and capitalize quickly on market dynamics and ad-hoc opportunities. Imagine being able to benchmark the relevance of your e-mail programs in real time to more quickly identify opportunities to improve the overall relevance via customized content, triggers, and cadence.

It’s all possible with the adoption of a customer-centric business model, a consolidated multichannel database, and the right technology.

Strategy #4: Leverage Consumer Dialogue to Inform Direction

There is no doubt that by harnessing the insights of your customers, you can make more informed business decisions, innovate more rapidly, and keep up with the impact of the “new normal” on purchase decisions.

Customer conversations are happening in the social media space via blogs, forums, message boards, review and video-sharing sites, and more. User-generated content (UGC) includes unsolicited feedback from potential consumers and current customers—both satisfied and disgruntled.

Monitoring those conversations and proactively responding with customer service outreach will become even more critical as this channel evolves further over the next year and continues to grow.

Finally, a number of organizations have had great success of late leveraging online surveys in combination with monitoring behavior to develop a deep and ongoing understanding of customer attitudes. This is all part of putting more emphasis on “listening” and providing customers with what they want. If organizations don’t listen and respond, customers will go somewhere else.

Strategy #5: Develop Creative and Dynamic Content That Is Relevant and Connects with Consumers

We’ve all experienced how the marketing environment has changed—not only due to the economy, but also due to the power shift from company to consumer in the new marketing ecosystem. Given these dynamics, it has become even more critical to develop creative that connects with consumers.

This requires expanding the definition of “creative” in the traditional sense to include channel mix as well. In 2010, leading organizations will be seeking to engage consumers in new ways, which will require not only the right message, creative look and feel, offer, and cadence, but also selecting the right vehicles.

Strategy #6: Embrace Analytics to Maximize Your Return on Marketing Investment

To best optimize your approach in 2010, you must maintain a focus on key metrics such as lifetime value (LTV) and return on investment (ROI). Carefully monitoring these metrics should serve to inform investment decisions and help answer key questions such as:

• How much should we allocate towards acquisition, retention, and win-back?
• What marketing mix maximizes my return?
• What is the allowable spend by segment?

And it goes without saying that businesses are looking at these metrics across the entire enterprise—not within product or business silos. While a 360-degree customer view should still be the goal for some given incomplete and/or fragmented data sets, master data management (MDM) is an increasingly popular paradigm for taking all the data in an enterprise and linking it to a single file that provides a common reference point or index.

Strategy #7: Test & Learn, Test & Learn, Test & Learn

Ongoing measurement, controlled testing, segment-specific performance and marketing mix evaluation are critical to success in 2010 and beyond. Although our increasingly dynamic marketing environment adds complexity to our jobs, the old adage still holds true: “If it can’t be measured, it can’t be improved.”

By maintaining a data-driven approach and using data and customer insight to drive communication strategies and plans, businesses will be positioned for success in 2010.

The McKinsey article suggests that, “Executives preparing their organizations to succeed in the new normal must focus on what has changed and what remains basically the same for their customer, companies, and industries. The result will be an environment that, while different from the past, is no less rich in possibilities for those who are prepared.”¹

Now is the time for organizations to align themselves with the “new normal” and prepare to thrive with integrated data-driven marketing strategies. This will ensure that companies are not caught in the “blind spot.”

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Sources:

¹ Davis, Ian. “The New Normal,” McKinsey Quarterly, March 2009.

² White, Brian. “Best Buy Internal Demographics Training Manual Leaked,” BloggingStocks, March 19, 2008.

³ Gassman, Bill & Gareth Herschel. “Incorporating the Web Into Cross-Channel Customer Analysis,” Research Study, Gartner, November 13, 2009.