Multichannel Marketing Metrics
with Akin

In part 1 of this series I summarized the crossroads at which digital marketing has arrived in 2010. In this part we will look at the surprising advances that direct marketing has made in the past two years.

The old-new direct marketing: Outbound

What web marketers don’t realize is that the new direct marketing (since the late 90s) has been a highly digital discipline in terms of the sophisticated, predictive analytics that were employed. Just not so digital in terms of the channels through which messages were brought out.

But why do we still have so much spam and junk mail then?

Because, while direct marketers employed PhD level analytics they lacked any timely data on their customers’ current interests. So the predictions were only true on average.

It’s like having a GPS device that tells you the neighborhood in which you are currently driving but can’t tell you which street corner you need to turn at.

The new-new direct marketing: outbound and Inbound and real time

The increasing digitalization and integration of channels made inbound and real-time marketing possible. Now, while a client is still on your website, or on the phone with your call-center, in front of your ATM, or using their mobile phone application to interact with you, the new direct marketer’s sophisticated analytics can be fed with real time context. That puts them in the position to refine their offer decisioning (i.e. behavioral targeting) on the spot.

Direct marketers from many industries have taken notice and expanded their ambitions to embrace the real time in their work. Thanks for that, web analytics are now increasingly on their minds too as a rich source of very current behavioral data.

Examples of the new-new direct marketing:

• Banks in Europe and the US have implemented interactive marketing programs that target individuals behaviorally in a consistent and analytical manner, regardless of which channel the interaction is on, i.e. the branch, the web, the phone, or outbound channels.
• Telcos in Australia, Europe, and US are including web behavior as part of their scoring calculations for attrition risk
• Multiple large, high-tech, B2B businesses in the US have designed demand generation marketing programs that integrate the web with other channels of interaction.
• Cable TV operators in Europe have implemented marketing programs that deliver targeted ads through direct TV. They are able to follow up consistently through phone, email, and web to nurture their leads and measure response across.
• With retailers, the degree to which the web team is asked to participate in a one-to-one marketing program depends on whether the team rolls up to the CMO or whether it is silo’d within an eCommerce, i.e. sales function. In the latter case, the web tean is told to focus on the website alone and it is difficult to get funding for cross-channel projects.

Overall though, we do seem to be heading towards a tipping point some time in the coming years.

Europe vs. USA, who is ahead?

From working with companies across continents, I gain the impression that more Europeans have been working on integrated marketing vs. Americans.

This is despite the fact that Europeans are much more concerned about privacy.

More European companies seem to have implemented sophisticated cross-channel programs or are issuing related projects. Until this year maybe, where noticably more American marketers are launching similar projects.

But until recently I felt as if the average American marketer was still building “Marketing Cadillacs” whereas Europeans were building “Marketing BMWs”.

Add to that the fact that Europeans (and Asians) are also ahead in their adoption of mobile devices including the willingness to interact with marketing messages.

Then you wonder what happened to the days when America was still 5 - 7 years ahead of Europe with any business innovation.

Wake up call!

—

In the final part of this series we will look at web marketing that has truly become multichannel in 2010.

Tags: Direct Marketing, Multichannel Marketing Measurement, Multichannel marketing metrics, multichannel marketing by Akin
4 Comments »

In the two years since publishing the Multichannel Metrics book, the face of marketing has changed drastically.

We are entering a critical crossroads in 2010.

By 2013, will we look back and find that this was the year when marketers from online and other marketing teams first realized how similar their goals have become and took steps towards integration across camps?

Or will we look back and find that the camps remained ignorant of each other and instead set in stone silo’d technologies making integration more difficult than ever? 

What do you mean, web and direct marketers’ goals are aligned now?

Marketers have had no choice.

Greatness has been thrust upon them!

Direct marketers

1. Have seen marketing dollars beginning to shift from offline to online
2. Finally see clearly that a large portion of interactions with their customers has moved online. For example, according to anecdotal feedback from several older European banks, 25% to 50% of their clients use online banking now. Some financial institutes acquire the majority, if not all, customers online.

Online marketers

1. Have had to abandon their silo’d, website-centric thinking because their websites are now only one component of their total web presence. Other presences include social media, mobile sites, behaviorally targeted ads and personalized emails.
2. They may continue to treat the offline as a step child for another couple years. Yet, they are already adopting multi-online-channel marketing practices for the purpose of integrating all these web presences.
3. The latter has required them to move from their traditional focus on aggregate level metrics and dashboards to looking at data about individuals across website, mobile, social, and advertising. This experience with individual level data will also make it easier for them to integrate their customers’ offline interactions down the road.

As a result, both online and direct marketers are now pursuing multi-channel data integration at the level of individual prospects and customers. Both camps do this for the purposes of

1. behavioral targeting,
2. better understanding of marketing ROI.

The technology gap is closing

While all vendors talked the talk for 360 degree views, the reality was different. Web analytics data was far removed from a direct marketers’ access.

• After all, the data are owned by the web team who couldn’t care less about individual level data at that time.
• The data are also hosted remotely at SaaS based web analytics vendors that prioritized reporting and good looking charts over granular data. As a result, data feeds (while available) would come with no SLAs. A feed might or might not arrive at the agreed time of night. That made it too unreliable for driving interactive (let alone real time) marketing programs.

Meanwhile, web marketers could integrate analytics based targeting into email marketing only by bridging the gap between several vendors and paying for integration services.

These technology gaps are now increasingly closing.

• Omniture is positioning its online marketing suite along with integrations with ESP partners through its Genesis program.
• Unica is positioning both
  • Its eMessage and Interact products for email and web personalization integrated with Unica’s web analytics and campaign management products for enterprise clients
  • Its recently launched Interactive Marketing OnDemand product where SaaS based customers use web analytics, email, and web personalization within a single application and UI.

The crossroads

This alignment of methods, goals, and technology represents our arrival at a crossroads.

(note added on March 12th): Maybe the word alignment is too much said.  But methods, goals, and technology are now more parallel and similar than ever.

But will we leave these crossroads into an integrated future or will we set in stone two silo’d multichannel worlds between online and direct marketing teams?

That is the big question.

—

In part 2 we will look at direct marketers vs. digital. Then in part 3 we will review where multichannel web marketing stands in 2010.

Tags: Business Metrics, Direct Marketing, Multichannel Marketing Measurement, Multichannel marketing metrics, Web Analytics, multichannel marketing by Akin
1 Comment »

In a recent post readers and I mulled over the fact whether Amazon really is that cool with their customer analytics and interactive marketing as we keep saying in our industry. Or whether their real secret to success is that they simply offer the cheapest price.

To that effect, Jared Waxman was kind enough to leave another thorough comment as an ex-Amazon’ian. (or do they call themselves Amazones?) Thought, I’d point you to it so it doesn’t go under in its location within a past post.

Thanks much to Jared and Ned and others who commented.

Tags: Customer Centricity, Direct Marketing, multichannel marketing, targeting by Akin
No Comments »

For all that buzz around Amazon’s sophisticated analytics and its targeted book recommendations, it is worth asking in Kevin Hillstrom’s priceless, heretic style: Is it just hype or does it really make the big difference for their business?

Do we really buy from Amazon because of the recommendations, personalized emails, the behavioral targeting through widgets?

Or do we buy from Amazon because they always have the cheapest price? (Not to the least because of the 3d party vendors and used books that are linked in.)

If they stopped being the least expensive would we still be buying from Amazon?

In other words, are they really competing on analytics? Or are they competing on price?

What is our willingness to pay extra for the kind of “marketing as a service” that Amazon has perfected?

Of course … this question isn’t really about Amazon, in the end. Much rather I am trying to double check what the true value of sophisticated analytics and targeted marketing are. All hype aside.

Separate things: What you will buy vs. where you will buy it

There is no doubt that Amazon is the go-to place for doing your research on books.

But being the greatest place for researching books doesn’t necessarily mean that people will buy the books there if they can get them cheaper elsewhere.

I imagine we all go to many web sites to research what car, electronics, gear, etc. we should buy. Where we will buy the item that we settle on tends to be a different question though. We might check on eBay or Craigslist, for example.

So are we giving too much credit to Amazon’s sophisticated analytics and marketing?

The answer …

As Anil Batra was joking yesterday when I saw him at the OMMA Metrics and Measurement in San Francisco, a typical consultant’s answer to such a question could be: “That depends on … what it depends on.”

It depends on …

Of course, I don’t have Amazon’s data. But I think that the answer will indeed differ by buyer segment:

1. High value prospects that buy books frequently and in higher quantities will likely appreciate the convenience and time savings. But given that these people buy so many books they would also be the segment that could get the biggest total savings by being disloyal to Amazon.
2. Infrequent buyers that are strapped for time will value the convenience over a few bucks of savings per book.
3. Infrequent buyers that are strapped for money but not for time would be more likely to put in the extra 5 minutes for buying the book at the cheapest vendor. Most books aren’t big ticket items. So this effect will likely be much less pronounced than, say, with electronics. But it would be there to a certain degree.

In the end, maybe the answer has not all that much to do with frequency but is a function of

• how much money vs. time buyers can save.
• how much value the individual puts on money vs. time

Time is money and money can buy time

The more time Amazon can save its book researchers, the more of them would buy their books on Amazon (assuming price is fixed). Still, those buyers who value money a lot more than convenience and time would be the hardest, if not impossible, to keep.

Anything else they could do?

Barnes and Noble has (or had) essentially a frequent buyer card. You could pay an annual fee and would get x % discounts on anything you buy.

But that really is just a return to the strategy of competing on price.

Could Amazon withhold access to book research features unless a buyer … purchased something in the last 12 months or joined some kind of for-pay club? That would be a return to subscription based content. Seems like it would backfire badly.

Bottom-line

It appears that the true value of all those analytics and targeted marketing for the retailer are in drawing the crowd into their (online) store. They get a shot at making sales (and cross-sales) that they wouldn’t otherwise have.

But converting researchers into buyers requires more than just targeted marketing. It also requires convenience, a “good enough” price, and of course customer satisfaction with previous transactions.

How would you go about measuring the value of targeted marketing effort XYZ?

If you have to measure ROI of targeted marketing effort XYZ you would probably do it through controlled testing.

That would be easy for Amazon’s targeted emails.

It would be harder for their book recommendations because you would wonder where they disappeared to if you fell into the control group.

Oh … but you could make them deliberately untargeted. Say you find that dinosaur book that the individual bought and shipped to somebody as a gift 3 years ago and recommend more dinosaur books.

Tags: Customer Centricity, Direct Marketing, Web Analytics, targeting by Akin
9 Comments »

(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
2 Comments »