Multichannel Marketing Metrics
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(This post is part of a series on the state of multichannel metrics today, one year after the book came out.)

In a subscription based business model, e.g. mobile phone service, you have two ways to make a customer:

1. gain a new one
2. renew an existing one, i.e. retain them

When Unica’s clients from the mobile phone carrier industry report about their work they invariably start by describing how vital #2 is to their industry.

The market for mobile phone services is so saturated that the only way to gain a new client is to take them away from a competitor.

Sounds like a place for marketing innovation.

A few innovative Telcos have hit on ways to combine online and offline worlds in order to improve their success rate with retention marketing.

As I learned from one of my colleagues last year, here is how one company went about it.

Online-offline integrated analytics for detecting attrition signals

At a large US mobile phone carrier, traditional retention marketers were working on predicting which customers were about to leave for the competition. These clients would be included in retention marketing efforts.

Originally, the statisticians had been going after this job the old fashioned way, i.e. trying everything from a customer’s contract details to transactions (i.e. usage) and demographics details to find something that would predict attrition.

But the only variables that showed any influence were the age of the subscriber’s phone device and the amount that they paid on the last bill.

Not exactly enough to catch someone in the hot act when they are about to walk out through the door.

Yet, it was going OK.

To put it in numbers, the marketers were able to reach 70% of customers at risk of leaving by contacting 40% of the possible audience. So their predictive models were giving them some amount of lift.

But wait a minute … If someone is thinking about switching would they not likely be coming to the web site and doing something on there that deviates from their usual click behavior?

Might they not be checking available promotions or upgrades or ways to strike a deal?

The idea seemed so promising that the statisticians gave it a go.

They took a chunk of historical web data for registered clients. They paired that up with the same customers’ historical churn data in order to train a predictive model (along w/ the offline data).

And what they found was impressive

Indeed there were predictive click behaviors on their web site but it wasn’t intuitive.

• Clients on a low subscription contract would have one kind of online signal that revealed their intention, e.g. address change.
• Clients on a higher rate plan however turned out to send a different signal with their clicks.

The numbers rewarded them.

Now, when contacting 40% of the potential list they were able to reach an extra 15% responses for a total of 85% of potential responses.

That doesn’t just means lots of stamps and mailers saved.

It means foremost saving the cost of special discounts that they would have extended unnecessarily to clients who weren’t thinking about leaving anyway.

Highly worthwhile.

Real time?

Most of the online-offline integration case studies that you may have read about in this series were of interactive nature, i.e. online click behavior would prompt action within a short period of time.

Here we have an example of how a company first took a historical chunk of data to train their model. No real time needed here.

But now that the model has been trained, fresh web analytics data would be fed to it regularly in order to keep predicting current customers at risk.

The morale

This is yet another strong business case for integrating online and offline analytics.

No wonder the case is strong. After all

• The case for competing on analytics is strong.
• The case for using behavioral data is strong
• Click data is a rich lather of behavioral data

It is time for the lollygaggers to stop acting surprised and jump on board!

Tags: Customer Centricity, Direct Marketing, Multichannel Marketing Measurement, Multichannel marketing metrics, Web Analytics, targeting by Akin
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Other than “How about cookie deletion?” the second biggest question that I have received in the past year when discussing the topic of online-offline integration is the question about privacy.

• Will it be OK with privacy regulations if I integrate click data from web analytics with customer data in order to improve the relevance of my marketing communications?
• More importantly, will it be OK with web site visitors’ expectations?

The regulations side is usually a short answer for me. Mind you, the regulations seem rather cumbersome to read. But the bottom-line boils down to:

• Have a clear privacy policy on the site
• Make it as easy to opt-out as possible, ideally a single click
• Extra credit, if in addition to opt-out you allow the individual to set their own preferences of how they’d like to be contacted and on what topics
• In countries where it is required, work with opt-in

To me, the bigger question seems about site visitors’ expectations.

It may seem we are wearier of being tracked than ever. There is always a big outcry when Facebook et al announce a move towards ad targeting.

But in reality, we are much more public with our lives than ever. especially in our social networks. See this article for instance.

So what is it about this privacy thing that we really want?

The following examples help me.

Privacy in a store

We hate walking into a small store if the sales person is too much in our face and doesn’t let us browse the items on our own. Maybe we fear getting pressured into buying something before we are ready. Heck, we may well be browsing for entertainment and not thinking of buying anything at the moment. And the shop keeper that is in our face makes us feel bad about ourselves.

But we also hate being in a big box retail store and not being able to find someone to answer our questions when we are ready to ask them.

Really, we want the person to be right there — magically — just when we need their help but not before. And we love it if they understand us so well that they can recommend just what we will benefit from buying.

Privacy in a restaurant

We hate when the waiter is too much in our face, especially after we are done with the meal. Maybe we fear pressured in vacating the table for the next guests.

Just as much we hate it when the waiter is nowhere to be found when we need the check or want to order something (else).

The waiter should just — magically — refill the glasses as soon as they are empty. They need to be right there with the desert menu and our check just when we want it.

Magic???

How does it work in those stores and restaurants that do this well? Is it magic?

No magic.

The perfect shop keeper and waiter are super observant. They put a web analytics tool to shame when it comes to tracking our behavior.

But they aren’t in our face about it.

And they don’t pressure us into buying something or ordering an appetizer along with the expensive main course.

They are at our service.

And yet they still do bring us the best cross-sales offer at the best time.

Marketing so relevant that it feels like a service

I still cringe when I hear that marketing should be so relevant that it feels like a service. At first glance it seems a cheesy thing to say. It seems a utopian dream of techies like me.

But wait.

How about all those educational webinars on the web that I love to attend and learn from?

Guess what! The people doing them (e.g. me, myself) aren’t altruistic at all. Their purpose is purely marketing. They cost a ton of money, by the way. Yet, it is a service and doesn’t feel like marketing at all unless the speaker is too salesy.

There are other examples too:

• How about book recommendations on Amazon
• Movie recommendations on Netflix?

They tend to be quite relevant and not at all in your face. Ignore them easily if you want.

In fact, haven’t you come to expect and demand that any product page on a retailer’s web site will contain information on accessories that go with the item?

So, it can be done

These examples prove that marketing, in the ideal cases, can:

1. feel like a service
2. be not in your face and not pushy

My take away is that the combination of click and customer data, if used the right way, can absolutely enable service oriented marketing. But if you abuse it for span, you will cause all of us marketers to look bad and to lose out.
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(This post is part of a series on the state of multichannel metrics today, one year after the book came out.)

Tags: Business Metrics, Customer Centricity, Multichannel Marketing Measurement, Uncategorized, Web Analytics, multichannel marketing, targeting by Akin
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(This post is part of a series on the state of multichannel metrics today, one year after the book came out.)

The previous post focused on a travel company that listens to their customers’ online behavior so to get their cross-sales - or last minute - offers to those who are most likely to care.

Now how about the retail banking industry?

Retail banks and credit card companies have been great innovators in the use of analytics for direct and relationship marketing. For example, the case of CapitalOne is well described in the book Competing on Analytics.

For good reasons:

1. Banking is a relationship business.
2. Banks know embarrassingly much about their customers based on all those transactions and other data
3. And what is the profit from a new bank customer at the moment when they first open their account? Negative, probably, until over the life time of the relationship the bank makes back their initial costs (and then some)
4. Banks have learned that they are most successful with cross-selling products to customers within the first 30 to 90 days of the relationship. After that, customers seem to go on auto pilot with their relationship.
5. Banks also have learned that new customers are most at risk in the beginning of their relationship and may spring back to their previous bank if something goes wrong.

So banks plan out all their customer communications very carefully by predicting which offer or message sent to which customer at what time is most likely to amount to maximized net present value.

(You might joke that we wouldn’t have the stupid mortgage crisis today if the direct marketing departments had been in charge of their banks)

So why is it then that many banks are such laggards when it comes to online offline integration?

Few industries have it easier.

• You visit your bank’s web site frequently
• You are almost always logged into your account when you go to your bank’s web site.
• There is a big incentive for not deleting your cookie so that you won’t have to go through all those annoying security questions to “register” your computer.
• Quite likely you even clicked the “remember my user ID” option so that even the bank’s home page greets you with “Hi Joe, welcome back”

All your bank’s products are outlined online so you have it easy to answer your own questions.

Looking for a car loan or savings account?

Likely you check rates online.

So … hellooo … is anyone listening?

Customer 1:  European bank cross-sells savings accounts

It seems a no-brainer.

The bank, with the help of a nifty online marketing consultant, mined their web analytics and customer data for clients who

• have a checking account
• but no savings account
• YET who have recently been on the web site looking at savings rates.

All it took was a feed from web analytics looking at web pages relating to savings accounts and keyed by login-name of customers.

For extra credit, they could have extended the campaign to those who weren’t logged in but whose cookie was previously registered during an authenticated session.

According to the consultancy, the campaign was easy to do and very lucrative. So they are expanding the program.

Customer 2: Stock brokerage looks at web data to cross-sell options-trading

Another no-brainer.

Options-trades are a great way for an online stock brokerage to increase transaction volume and to lock in clients into a tighter relationship.

But options are risky and somewhat more complicated than trading stocks. So they aren’t everyone’s cup of tea.

Who is ready to receive the cross-sales offer?

Could it be those clients who are not yet authorized for options trading but who have recently been on the web page studying the process of how to sign up for options trading?

You betcha!

So what are the couch potatoes waiting for?

Legitimately, banks want to make sure that they stay within the accepted norms for privacy. The online-offline integration feels very new to them. So bankers are quick to throw up their arms and say that their hands are tied by the privacy rules of their organizations.

Are banks really that concerned about our privacy though?

Every night banks crunch through our daily account transactions to watch for unusually large deposits so that they can quickly bring us a cross-sales offer before we move the money elsewhere.

How is that for privacy!

Personally, I think that some of the arguments that we hear today are similar to what happened when the first train came out. Namely, it was said that traveling at the never-before-heard speed of 20 MPH was not healthy for human beings!

No doubt, we will see more banks review the opportunities very carefully. Innovators are already tapping into the integrated data. Others will follow.

In some future edition of Competing on Analytics we may well hear about some bank that rode the opportunity out to their advantage.

Tags: Customer Centricity, Multichannel Marketing Measurement, Multichannel marketing metrics, Web Analytics, multichannel marketing, targeting by Akin
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(This post is part of a series on the state of multichannel metrics today, one year after the book came out.)

The previous posts focused on companies accelerating conversions from online to offline. Here now comes an example of cross- or repeat-sales. This time from the travel industry.

The company is Collette Vacations, a provider of global travel and escorted tours to more than 150 destinations. 91 years old, the company is far from old fashioned.

Other than their multichannel approach to marketing, what does Collette have in common with the previous three businesses that we examined (automotive, B2B, and real estate)?

All 4 examples are in the category of highly considered purchases. I.e. Collette’s tours to Antarctica, or Oberammergau aren’t something you book in a rush. Much more typical is that customers research their options online, watch available videos, sign up for a live presentation, and eventually book after clarifying all their questions, maybe by email, chat, or phone.

Last minute travel

Now, something that I learned from Jukka, at The Mileage company, is that travel business is very tricky business.

You wouldn’t guess from the outside.

But one of the many tricky aspects is that travel products are perishable goods just like tomatoes at the grocer.

You can’t sell a hotel room one day after it has been standing empty.

So what to do when Collette has vacation seats to Barcelona on sale and they need to find buyers quickly?

Should they spam their entire email list as a marketer would be tempted to do? Collette thought better.

Protect the future value of your email list

Email marketing is tricky business too. Email too often and while initially you may get results, eventually you burn the attention of your recipients. After all, except for cases when a tour sells out completely, there would always be last minute sales to promote.

If you were a spammer you would find reason to send spam every day. Yet, your future emails would likely remain unopened or go into the spam folder.

So, a year ago, Collette decided not to fall into that trap. Instead they connected their web analytics with their email campaign management system.

When, for instance, Barcelona vacations are on sale they have targeted the announcement to the segment of web site users that have recently spent time browsing web pages related to Mediterranean vacation options but haven’t recently been purchasing travel.

Not surprising that this segment is much more likely to care about the promotional announcement than the average population.

The sausage making

But how to connect web site visitors to their email addresses?

Collette’s web site permits registering online in return for something of value, e.g. the ability to save a wish list of vacation destinations. Along with online registration, it is best practice to save the login (or persistent cookie) that is created in conjunction with the provided contact information.

That info forms the basis of being able to listen to an individual’s clicks so to know better about the kinds of vacations that they may find of interest.

As Collette’s privacy policy states, customers have many options to opt-out. But if they do remain opted-in, “Knowing how you use the site enables us to better tailor our content and services to most effectively suit your needs.”

The Results

The official case study with further details on Collette’s implementation is available for download. Among some of the results that Collette shared is that their flagship, “welcome” campaign performs 30% above industry average.

The Morale

The hardest thing about this is not at all the technology in my opinion. But it is for the business to come up with ideas that entice visitors to register with their accurate email information. What value are you going to provide to your clients so that they will give you the email address where they actually do check their messages?

And since cookies are deleted eventually and people use multiple devices to browse the Internet it isn’t even enough to get a registration only once. Rather, the business needs to entice visitors to login periodically so to keep the data trail alive.

One would wish this was easier.

But what I like about this challenge is that it keeps marketing real. We have to provide value to the customer for the permission to include them in our analytics and the permission to communicate.

Two-way value has always been the basic ideal behind CRM.

Tags: Customer Centricity, Direct Marketing, Multichannel marketing metrics, Web Analytics, multichannel marketing, targeting by Akin
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