marketing success in 2009 - experian · 2009-10-28 · marketing success in 2009 page 8 | marketing...

Marketing success in 2009

Eight smart customer engagement strategies

February 2009


| Marketing success in 2009

Introduction Despite the ongoing economic downturn, consumers possess more information and a broader range of purchasing choices than ever before. This fact impacts millions of marketers who, faced with dwindling budgets and constrained resources, must engage these financially challenged consumers in an ever-growing, cluttered and competitive media environment. Luckily, there is good news. This adverse paradigm can be turned into an advantage through the use of smart customer engagement strategies.

Long before the economic crisis began, consumer behaviors started to shift. In fact, U.S. consumer confidence and spending began slowing in spring 2007, according to data from Experian Marketing Services. Specifically, from spring 2007 to summer 2008, the percentage of U.S. adults who felt they would be financially better off in the next year dropped 11 percentage points to 37 percent, and the number of adults who felt they would be worse off in the coming year grew to a staggering 22 percent.

This analysis shows that the negative signs were there — and, unfortunately, the predictions were accurate. The Congressional Budget Office recently forecast that the U.S. federal budget deficit soon will hit $1.2 trillion. The office also predicts a 2.2 percent contraction in the economy and a 1 percent dip in consumption this year. These economic realities will have a huge impact on businesses and, as a result, the scope of every marketing department’s funding and resources.

Given this challenging environment, companies must solidify and enhance their customer relationships. However, a recent CMO Council survey of 650 senior marketers1 found that 76 percent of respondents believe they are not realizing the full revenue potential of their current customers. While overcoming this lack of customer insight is key to achieving marketing success in 2009, these efforts will need to be coupled with disciplined investments that utilize limited resources.

As in the economically challenged early 1990s, direct marketing is ideally positioned to play a major role. The difference now is that marketers must embrace the digital landscape and successfully integrate these channels with other media. If we’ve learned anything from the proliferation of social media channels, it’s that relevance is essential and engaging customers individually is a critical element in deepening customer loyalty and creating customer advocacy. For both offline and online channels, the ability to use data and customer insight to drive measurable actions will enable companies to add significant value through better customer engagement.

1 CMO Council — “Routes to Revenue,” 2008


Marketing success in 2009 |

In today’s world where your customers are your best advocates, marketers must look for better ways to engage and empower them to become loyal, brand champions. To help you optimize customer engagement and get the most for your marketing dollars, Experian Marketing Services has identified eight strategies for achieving marketing success in 2009.

#1: Utilize customer lifetime value to drive strategy Are you guessing who drives your success, or are you measuring customer value based on tangible facts? Perhaps your best customers aren’t those who buy most frequently, but those who purchase the most profitable products. To find out, you first must decide what matters to your company in terms of lifetime customer value. Your metrics don’t have to be perfect; just make sure you’re tracking purchase history and measuring value in tangible ways that work for your business.

If you find that high-value customers suddenly are spending less, look at what they’re buying and determine how to adjust your marketing and product mix to spur continued purchases. When you acquire new customers, look at which messages are resonating with them. Since this process requires concentrated analytical effort that can stretch internal resources, you should consider working with a marketing partner that understands your business, possesses core data assets, and can help you field and analyze campaigns.

Time stamp With a little more than a year’s worth of data, creating a lifetime value methodology and score should take about three to four weeks.

2009 watch To get a more well-rounded and realistic view of how their customers are behaving, more marketers will match their customer segments to third- party data sets that are rich in consumer transactional behavior and demographic information.

Perhaps your best customers aren’t those who buy most frequently, but those who purchase the most profitable products. To find out, you first must decide what matters to your company in terms of lifetime customer value.



#2: Maximize your marketing mix Carefully analyze which marketing channels are driving the most return within your customer segments. Integration of various channels at different stages of the customer buying cycle will drive a more consistent and persistent message. This might mean using email as an alert for an offer, a new product launch or an upcoming event, followed by a direct-mail piece or a call from a customer service representative. While shifting all marketing activities online may be tempting because of reduced costs, it may not be the best idea.

Today’s customers use multiple channels to shop, research and browse, so understanding these behaviors and their specific purchase triggers will help you optimize the marketing mix. It’s also critical to respect your customers’ preferred contact channels. If someone wants to hear from you by mail only, then continue to communicate with them via that channel; just make sure you’re doing it as cost-effectively as possible by evaluating the type and frequency of the mail pieces you send.

Time stamp Exactly how often you examine your marketing mix depends on your business structure and the pace of your promotional cycle, but evaluate it at least monthly.

2009 watch More emphasis will be placed on financial measurability. This will cause a decrease in the use of channels that are not easy to measure in dollars, such as public relations and trade shows, and an increase in more financially transparent mediums, such as email.

If someone wants to hear from you by mail only, then continue to communicate with them via that channel; just make sure you’re doing it as cost-effectively as possible by evaluating the type and frequency of the mail pieces you send.



#3: Listen to your customers Getting the information you need to target customers successfully means you must make it easy for them to tell you what they want. To encourage this, provide them with marketing messages that explicitly state the benefits of filling out an online form, such as, “You will receive special offers designed just for you.” Also explore the possibility of providing an added incentive, like a 15 percent discount coupon. You may be pleasantly surprised at how many customers will provide their information.

Customer service representatives also can serve as great preference-collection vehicles. During calls, you have the customer’s full attention and should use it to your advantage by requesting as much data as possible. Provide your team with a set of short, well-planned questions, and make sure the calls are recorded and the data is entered in real time. This will kick-start your ability to engage your customers with personal and highly relevant messages.

Time stamp You can create an online preference center in less than a week, but to ensure high response, a series of tests should be conducted before promotion. Take an additional week or two to gauge the effectiveness of various layouts and questions to determine the most optimal form design. Also, to keep the data current and accurate, remind customers in future communications to update their preferences.

2009 watch Marketers are not only increasingly adopting preference center functionality, but they also are providing incentives, such as sweepstakes, to drive customers to submit their information.

Customer service representatives also can serve as great preference-collection vehicles. During calls, you have the customer’s full attention and should use it to your advantage by requesting as much data as possible.



#4: Re-engage lost customers It’s always easier to sell to current customers than to acquire new ones. Another smart, low-cost marketing tactic is to reactivate old customers. It’s easy and inexpensive to profile a segment of former customers to see who has similar attributes to your best current customers and then approach them with a tailored, high-value offer. You should get some of them back if your messaging is both targeted and meaningful.

Think about merging Web analytics with email marketing to track detailed events on your site, such as page views or registration form completions, and set up specific business rules to send relevant and timely emails accordingly. You can even add elements of personalization and define customer segments by online behavior, such as “browser,” “buyer” and “abandoner.”

Regardless of the reactivation medium you choose, the key is to remind customers about your value proposition and tell them why they should come back. Most important, always personalize your campaigns to ensure you connect with your customers.

Time stamp Web analytics tags, along with associated email rules, take a maximum of two weeks to implement. You can develop a full email campaign to lost customers within a month.

2009 watch It’s not just retailers who are sending re-engagement messages. Businesses in other industries, such as hospitality and publishing, are running promotions based on unfinished itineraries and expiring print subscriptions.

2009 watch

You can add elements of personalization and define customer segments by online behavior, such as “browser,” “buyer” and “abandoner.”



#5: Become more personalized, relevant and precise The trends are clear: Customers want more relevant communications. As marketers embrace the use of one-to-one marketing, it is increasingly important to synthesize massive amounts of data from various sources to drive more personalized, relevant and targeted communications. Implementing advanced technologies to address the ultimate challenge of sending the right offer, to the right person, through the right channel, at the right time has become a requirement for successful cross-channel marketing campaigns.

Thanks to advances in targeting software and methodologies, disparate information can be more easily captured in marketing databases than in the past. When applied effectively, this information is a surprisingly accurate and powerful tool. With it, you can construct an effective contact strategy to decide whom to contact (audience), which channel(s) to employ (direct mail, email, telephone, mobile), when to contact (timing), what to say in your communications (message), how many times and for which events to contact (frequency).

By breaking down the targeting system and utilizing information effectively, marketers can simplify a contact strategy plan — from customer acquisition to retention.

Time stamp You can successfully target specific groups of customers after just a few days of segmentation and messaging planning. A comprehensive contact optimization strategy can be actionable in less than two months.

2009 watch As more marketers are turning to digital channels, the link between automation and personalization will tighten, and rules-based dynamic messaging and real-time product recommendations will become the norm.

2009 watch

Construct a contact strategy to decide whom to contact, which channel to employ (direct mail, email, telephone, mobile), when to contact, what to say in your communications, how many times and for which events to contact.



#6: Use social networking techniques to inspire brand ambassadors There is no doubt that technology such as blogs, social networking and closed communities are changing the pace and the face of customer engagement. Today, online content and blogs strongly influence purchasing decisions. According to a recent study conducted by JupiterResearch2, “blogs factor into stages of the purchase process — over half (52 percent of those surveyed) said blogs played a role in the critical moment they decided to move forward with a purchase.”

Many of your best customers are connecting with each other online and sharing feelings and opinions about your services, products and brand. Capitalize on this behavior by using conversation and mapping tools that tell you what they’re saying about your company, whether it’s positive, negative or neutral. These tools also let you pinpoint the most important forums, bloggers or influencers. Acquiring this type of valuable intelligence provides a basis for developing an effective word-of-mouth communications plan. Mobilizing influencers and allies to promote your company will help ensure that you’re communicating effectively with your most profitable customers and prospects.

Time stamp Starting a blog takes only a day or two, especially if you’re using a pre-designed template or open-source blogging software. Start populating the blog approximately one month before heavy promotion so that the content can be tested and tweaked to ensure relevance and appeal.

2009 watch Marketers will put more of their dollars toward social networking in 2009. JupiterResearch predicts that 26 percent of marketers will implement budget increases of 16 percent or more for social networking in the next year3.

2 JupiterResearch — “Harnessing the Power of Blogs,” 20083 JupiterResearch — “Social Marketing Scorecard, 2008: Evaluating Current and Future Spending”

Use conversation and mapping tools that tell you what your customers are saying about your company, whether it’s positive, negative or neutral.

Pictured is an industry blog, emailresponsibly.com.



#7: Employ customer segmentation and behavioral targeting techniques Not long ago, using personas or purchase history was enough when it came to customer segmentation and targeting. Today, you need to go deeper and augment your transactional information with attitudinal and behavioral data that enables a richer customer profile. In addition to leveraging custom surveys and syndicated research to develop actionable segmentation schemes, look at Web trends and analytics for a real-time understanding of consumer behaviors, and tailor your marketing initiatives around this insight.

For example, during these tough economic times, cooking at home versus going out to eat has become a good way for many consumers to save money. Recent data from Experian® Hitwise® confirms this trend — showing that visits to grocery Web sites went up 29 percent between October 2007 and October 2008 and visits to coupon Web sites were up 27 percent in the same period. Based on this behavioral analysis, companies that provide complimentary products and services like recipes or movie rentals can focus their messaging and advertising for greater return.

Time stamp A robust segmentation framework that incorporates channel and media preferences, effective messaging guidance, attitudes and behaviors typically can be developed in 90 to 120 days.

2009 watch More marketers will match their customer segmentation schemes to addressable media channels to improve advertising effectiveness.

Recent data from Experian® Hitwise® shows that visits to grocery Web sites went up 29 percent between October 2007 and October 2008 and visits to coupon Web sites were up 27 percent in the same period.



#8: Measure, test and adjust your programs for greater return Measuring marketing value is not only good practice; it is critical to ensuring adequate funding and resources. While you need to measure basic statistics like customer satisfaction and loyalty as well as specific campaign results, you will improve marketing performance only by testing creative, message and offer combinations to determine which methods are the most effective for your target audience. In today’s marketing environment, where you’re communicating with customers through multiple channels, it is even more important to understand which marketing tactics lead to meaningful customer interactions — and better return.

A carefully planned and well-executed testing strategy is your greatest ally in the quest for increased return on investment. When considering a testing strategy, you must be clear about exactly what you are trying to measure. Determine your specific goals, and carefully monitor the measurable elements that directly affect these goals. A common problem is that companies get so caught up in examining multiple metrics that they lose sight of how to apply the metrics. Identify what is most important for your business, and employ a testing methodology that will lead to fast, effective decisions.

Time stamp A robust segmentation framework that incorporates channel and media preferences, effective messaging guidance, attitudes and behaviors typically can be developed in 90 to 120 days.

2009 watch Testing will continue to be important to driving incremental lift through digital media. Marketers will use more customer information to test customized advertisements through email, digital printing, mobile applications, Web site optimization and social networking.

In today’s marketing environment, it is even more important to understand which marketing tactics lead to meaningful customer interactions — and better return.



Conclusion There are many tactics marketers can employ to make 2009 more successful and profitable. Rather than simply scaling back to fit the mold of today’s unfavorable economy, take charge and find new opportunities for expanding your understanding of and communication with customers. Carefully and sincerely engage your customers so that they become strong ambassadors for your brand.

Remember that customer engagement is essential, and building deep, lasting customer relationships is the key to ongoing marketing success. By working smarter and using data and customer insight to drive measurable actions this year, your business can emerge victorious and be better positioned for the years to come.

About the Author Ashley Johnston, Vice President, Marketing Experian Marketing Services

Ashley Johnston leads the Marketing division of Experian Marketing Services. Experian helps companies effectively target and engage their customers through smart marketing programs that generate strong return on investment.

For more information, contact Experian at 1 888 404 6911 or [email protected].

© 2009 Experian Information Solutions, Inc • All rights reserved

Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc.

Other product and company names mentioned herein may be the trademarks of their respective owners.

02/09

Experian Marketing Services965 American LaneSchaumburg, IL 601731 888 404 6911www.experianmarketingservices.com

marketing success in 2009 - experian · 2009-10-28 · marketing success in 2009 page 8 | marketing...

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