Segmentation And Targeting Pack

A One-Two PunchMarketers can deliver a knockout performance using

this powerhouse duo, but need the right methodology and metrics to reach customers effectively. Here are

proven strategies to help ensure stunning results.

Segmentation and targeting are the powerhouse duo at the heart of today’s data-driven mar-keting programs for one simple reason: When implemented correctly, they’re a force to be reckoned with.

They are central to deploying relevant, personalized marketing campaigns, which can deliv-er over more than times the response to static, same-to-all messaging, according to Calson & Co.’s 1-to-1 Response Rate Report.

The use of segmentation and targeting has its challenges; the number of methodologies and metrics available can complicate the process. Even so, the end goal remains the same: To in-crease marketing efficiency and lead-gen success with a focused effort toward a specific cus-tomer or group, embedded with the right message.

Reaching that objective starts with asking — and answering — the right questions: Should you use data on customers’ behaviors, demographics, or passion points? Should you target using email or addressable TV? Why is account-based marketing creating so much buzz?

Whether you’re a direct marketer neophyte or veteran, this eBook delivers the proven strat-egies to help answer those questions and ensure knockout segmentation and targeting perfor-mance.

3 The Segmentation Triple Threat

6 Marketing to the Millennial Mind-Set

7 Addressable TV Isn’t On the Way; It’s Arrived

9 At the NFL and Moët Hennessy, Collaboration Leads to Insight and Impact

10 Email Marketing Isn’t as Effective as It Could Be

11 All Uses Surprising Customer Insight to Boost Engagement and Sales

13 The Magic of Account-Based Marketing

16 3 Ways to Use Customer Lifetime Value to Optimize Marketing Spend

18 Heard in the Twittersphere

Segmentation and targeting are the powerhouse duo at the heart of today’s data-driven marketing programs for one simple reason: When implemented correctly, they are a force to be reckoned with.

They are central to deploying relevant, personalized marketing campaigns, which can deliver more than four times the response to static, same-to-all messaging, ac-cording to Calson & Co.’s 1-to-1 Response Rate Report.

The use of segmentation and targeting has its chal-lenges; the number of methodologies and metrics avail-able can complicate the process. Even so, the end goal remains the same: To increase marketing efficiency and lead-gen success with a focused effort toward a specific customer or group, embedded with the right message.

Reaching that objective starts with asking — and an-swering — the right questions: Should you use data on customers’ behaviors, demographics, or passion points? Should you target using email or addressable TV? Why is account-based marketing creating so much buzz?

Whether you’re a direct marketer neophyte or vet-eran, this eBook delivers the proven strategies to help answer those questions and ensure knockout segmen-tation and targeting performance.

Segmentation is a basic concept. Simply put, it is about “separat-ing customers based on similar characteristics,” explains Nick Necsulescu, senior manager of

digital marketing at President’s Choice Financial and formerly, senior manag-er of customer segmentation for TD Insurance. But it’s when marketers break down this definition into micro-concepts that segmentation becomes more complex.

According to Necsulescu, there are three ways marketers can most effec-tively segment their customers: based on behavior, needs, and profitability.

Each one way requires different forms of data. Behavioral segmentation is based on interactions and database information (such as purchase histo-ry or demographic data), Necsulescu says, while needs-based segmentation can be determined by survey or lifestyle data. Marketers can also segment based

on low, medium, or high profitability, he adds, which can be determined through methods like customer life-time value analysis.

All three methods are valid on their own, but marketers derive the most value when they leverage all three, Necsulescu explains. Here’s a progres-sion of how three brands leverage var-ious levels of segmentation incorpo-rating an increasing number of those attributes to drive relevancy and, ulti-mately, ROI.

Segmentation based on behavior When it comes to email segmentation, Johnston & Murphy is just getting its foot in the door. Indeed, the premium footwear and apparel company divvies up its products into categories and then relies on customers’ behavioral data to target patrons.

Back in the 1970s and ’80s, the brand was one of the go-to places

to buy business shoes, says Heather Marsh, director of e-commerce for Johnston & Murphy. “You go to Brooks Brothers and get your suit; you would come to us to get your shoes,” she says.

But as time went on, some men wore business suits less frequently; others stopped wearing them altogether. So, by 1998, the company expanded its offer-ings to include apparel.

The retailer also debuted its first women’s collection in 2008. These changes caused the retailer’s market-ing to evolve. Instead of just showing footwear in its direct mail or email cre-ative, for instance, J&M began featuring full head-to-toe outfits for men and for women, Marsh explains.

As J&M’s products and marketing progressed, its use of segmentation followed suit.

For the retailer, segmentation be-gins at the product level. J&M assigns its footwear and apparel to one of three groups: end-use, which includes busi-ness casual and weekend wear; dress products, which fall into the brand’s more classic and formal look; and style, which includes more fashion-forward and edgy items, Marsh explains. The brand then looks at customers’ past purchase information, such as which categories they bought from, how of-ten, and how much they spent.

Based on this information, J&M then tailors its emails to where custom-ers are in their lifecycle.

For instance, when a new customer signs up for J&M’s emails, the brand sends them a welcomes series, in-cluding a thank-you message for sub-scribing, as well as some educational materials that tell the customer about the brand and its offerings, says Augie MacCurrach, founder and COO of Customer Portfolios — one of J&M’s

The Segmentation Triple ThreatSlicing and dicing customers based on behaviors, needs, or profitability is nice, but leveraging all three is the real secret to success. By Elyse Dupré

marketing platform providers. Once a newcomer makes a purchase, J&M fo-cuses on driving repeat business. This is especially important, MacCurrach notes, given that more than 65% of J&M’s customers were one-time buy-ers when Customer Portfolios start- ed working with the brand about a de-cade ago.

J&M encourages repeat purchas-es through repurchase and cross-sell email series, which leverage prod-uct recommendations and predictive modeling based on previous purchas-es. However, instead of sending three emails — one for each product cate-gory — to everyone, J&M suppresses customers from the list who may not find the email relevant based on their previous purchases. So, if J&M pro-motes shoes from the style category, the retailer will remove subscribers who purchase apparel from the end-use category.

J&M also sends reactivation series with special offers to lapsed customers to try to win them back.

Encouraging consumersFinally, the retailer occasionally sends surprise-and-delight emails to custom-ers who spend the most, such as $50 gift cards to people who spend $1,000, MacCurrach says. These emails, he adds, can encourage customers to ex-plore other product categories.

When J&M did send separate emails for each product category, these mod-eled emails generated a 150% to 200% lift in conversion compared to J&M’s generic emails, which produce “very low” conversion rates.

However, while the modeled emails’ conversion rates were higher, their de-rived revenue was lower because J&M was reaching such a niche audience.

“A broader message to a broader audience is driving more revenue than a very specific message to a small pop-ulation,” he explains.

J&M also experiments with different forms of customer data. For instance, Marsh says that the retailer created a preference center to better determine which product categories customers want to receive communications for;

however, most customers opt to receive information about all of them. It also tried incorporating more customer data — such as demographic and psycho-graphic information — yet, there was too much category crossover to form any definitive segments.

“A customer who only buys classic footwear that’s business-oriented isn’t necessarily what you might think [of in terms of] an older guy in the finance profession,” Marsh explains.

Challenges with segmentationStill, segmenting based on product category and customer behavior cre-ates a few challenges.

For one, there are discrepancies be-tween marketing and the brand’s mer-chandising and product development teams in terms of what category an item should fall into, Marsh notes.

“We spend a lot of internal time talking about those buckets and how products should be classified,” she adds, “and we almost get tripped up on our internal viewpoints of these buckets.”

Customers can also view these product categories differently. Because “style” is so subjective, for instance, J&M may consider a particular blazer to be fashion-forward while a certain consumer might not think it’s edgy at all, she continues.

To help solve these dilemmas, J&M is embarking on a segmentation 2.0 mission. Its goals, according to Marsh, are to create categories that are less sub-jective (for example “style”) and more consumer-facing.

She aims to achieve these objectives by working with product development and merchandising to create the seg-ments — instead of having marketing head the categorization solo. The com- pany started developing this new seg-mentation model in 2015 and plans to act on it in the next 12 months.

While J&M primarily focuses on customer behavior for its segmenta-tion, Baxter Credit Union aligns its customers’ behaviors with their needs. However, taking this approach is not without challenges.

The first is determining what data to use. About 7 years ago the credit union

THE NUMBERSWHEN IT COMES TO SEGMENTING BY CHANNEL, MARKETERS SLICE AND DICE BASED ON

25% Activity/behavioral trigggers

18% Customer value

18% Demographics

13% Not sure

60%Personas

9%None

[Experian Marketing Services]

aggregated all of its siloed data into one data warehouse. This, in turn, created a shift: Instead of wondering how they could obtain more meaningful cus-tomer data, the company’s marketers questioned where they should begin and which data they should ignore, says John Sahagian, VP of marketing at Bax-ter Credit Union.

The second challenge is defining seg-mentation as it pertains to the brand’s business. Before having a centralized database, the credit union didn’t do much segmentation.

According to Sahagian, it relied on basic slicing and dicing of data — such as whether customers had checking ac-counts. However, after creating a data warehouse, the credit union began data mining and built a marketing automa-tion engine to enhance member out-reach and engagement in May 2013. Now, the company can align its product information with lifecycle-, behavioral-, and needs-based data to deliver a more personalized experience.

Expanding the definitionStill, some disparity remains between how the organization’s senior manag-ers and marketers viewed segmenta-tion in the past and how they’re trying to expand this definition in the present and future. “We have a lot of people who are approaching this from more tradition-al segmentation: What are the four buckets that we are going to build large campaigns around?” Sahagian explains. “Today the availability of in-telligence about your customers and the tools needed to leverage that data have become so much better that you can do a [better] job of reaching out to

specific individuals and understanding their needs.”

Understanding existing customers’ needs is key, too, because, as a credit union, Baxter legally can’t sign up “any-body on the street,” Sahagian notes.

The company used its under-standing of customers’ financial needs to launch a campaign promoting its new PowerPlus Checking product in March 2015 that targeted 14 differ-ent segments. Before introducing Pow-erPlus Checking, it had two different products for its checking accounts: an ATM reimbursement product and an interest product.

If customers made a certain number of transactions within a month, Baxter would let those customers choose be-tween the products, which would result in them either receiving a 2% APY on their balances up to $25,000 or up to $10 in reimbursements for non-Baxter ATM fees, Sahagian says. However, with PowerPlus Checking, the compa-ny brought these two rewards together so that customers could have both.

To show customers how PowerPlus Checking could serve their needs and lifestyles, Baxter broke the campaign down into four key segments: notify, activation, acquisition, and upgrade.

Then the credit union broke these groups down into 14 micro-segments by looking at customers’ language, ac-tivity level, and age of their account. So, if a customer already had one of the two checking products and was ac-tively using it, Baxter would automati-cally convert that customer to the new account and notify them of the “good news,” Sahagian says.

However, if the customer wasn’t using his existing account frequently

(or at all), Baxter would send him an activation communication encourag-ing him to start using the new check-ing product and taking advantage of its new perks, he adds.

As for customers who didn’t already have one of the two checking products, he says, the brand would take the op-portunity to try to get them to open a new account through an acquisition communication. Finally, the company targeted customers who had checking products that didn’t offer any rewards, but they met the activity requirements to earn the ones PowerPlus Checking offered. According to Sahagian, Baxter sent these customers a communication encouraging them to upgrade their account and stop “leaving financial re-wards on the table.”

Customers were contacted via di-rect mail, email, or outbound call for these segmented communications.

Building out its offeringThe company is waiting on results, Sa-hagian says; however, he plans to an-alyze retention rate and transactional activity for people who already had a checking account, as well as open and activation rates for customers who did not. In addition, he says the credit union will send out surveys and look at Net Promoter Scores to better determine customer loyalty and perceived value.

The brand is also aiming to extend its segmentation across all of its channels within the next five years. It’s started taking baby steps toward this initiative, which include rebuilding its website late last year. The next goal is to connect the website and the credit union’s other marketing channels in its CMS and Adobe Campaign to deliver relevant content no matter where customers are.

“If I present a credit card offer to you on our website this morning and you engage with it, but say, ‘That’s not what I’m interested in,’ when you stop into a branch later, I want to make sure the information the branch has on you is updated to recognize that,” Sahagian says. “Because if they come after you and offer that same thing you said no to this morning, you’re going to say, ‘Well, you don’t know me as a customer.’” n

“A broader message to a broader audience is driving more revenue than a very specific message to a small population“ — Augie MacCurrach, Customer Portfolios

A ge is just a number. It’s a popular mantra that often refers to love re-lationships. It’s also a phrase that marketers

should consider when they’re tempt-ed to group consumers into age- defined brackets. Segmenting custom-ers and prospects by age can be useful, of course, but some marketing insiders say it’s not as relevant as it was in the past. That’s because today’s audiences are connected less by age and more by beliefs and mind-sets.

This is especially true when it comes to marketing to millennials. Marketers will likely see better results by segmenting such a diverse and broad group by attitudes and expecta-tions rather than by age.

“There are messages that resonate across generations,” says Darren Ross, EVP at Fluent, a marketing agency that focuses on college-age consumers. “Emotional connection is a tried-and-true messaging point for brands,” Ross says, for example, that love of family is age agnostic and cross-generational, and that personal devotion is some-

thing that marketers can tap into at any age. The caveat, he adds, is that inter-pretation of family, or any other per-sonal passion, can vary dramatically.

“That message [of family] looks very different to multiple generations,” Ross says. “Picture a family with kids. This image used to be a man and a woman, two kids, and a dog in a sub-urban home. Now, marketers show multiple versions from single-parent homes to single-sex married couples to multi-generational households.”

Crafting your messageOf course, there are inherent truths that come with defined generations that marketers can leverage to craft marketing message that resonate and drive action. “Generations share touchpoints in culture that allow marketers to tap into emotions and change behavior. For boomers, for example, it could be events such as the [1969 Apollo 11] moon landing and the Cold War,” Ross says. “However, messages and stories need to be personalized to the individ-ual to work really well.”

Right now, the generation that seems to attract the most attention from marketers and advertisers are, not too surprisingly, the more than 85 million millennials — who ironically fall in that old advertising sweet spot of 18- to 34-year-old consumers.

But it’s not difficult to argue that a teenage millennial has little in common with a 34-year-old cohort. And mar-keting to that diverse group is proving to be a challenge for companies send-ing the same message to everyone.

Norty Cohen, founder and CEO of digital agency Moosylvania, says the key to engaging millennials — or any group — is to understand basic human motivation and drive. Cohen’s team re-leased a study based on interviews with more than 6,000 millennials that aimed to find out what is their mind-set.

“We asked millennial consumers to describe themselves; we gave them 36 attributes,” Cohen explains. “Mil-lennials chose nine leading attributes to describe themselves: self-directed, positive, loves devices, free spirit, con-fident, reads a lot, fiscally responsible, globally aware, and health conscious.”

The study also revealed which char-acteristics a brand needs to become a millennial favorite: high quality, fits their personalities, socially responsible, shares their interests, and says import-ant things. All are qualities that can, and often do, echo across generations.

“Is there such a thing as crafting a story that fits an entire generation? Only if it fits their story,” Cohen says. “It’s about them, not about you.”

Reaching millennials based on their mind-sets goes beyond messaging.

“Once you understand the nuanc-es of their motivations when it comes to communications, you can better engage with them in a way that adds value and influences their perception of your brand.” n

Marketing to the Millennial Mind-SetIt can be tempting to market to millennials as one massive segment, but a more effective approach is to reach out to that audience based on beliefs and behaviors, rather than age. By Natasha D. Smith

L ast year a national beverage brand sought to win back business from households with incomes in excess of $70,000 and kids ages 7 to

12. It purchased third-party data from a leading aggregator and matched it with first-party data from participating media companies to execute a highly targeted blitz.

It scored big. Following the cam-paign, penetration within the target segment increased 38%, bringing with it a 21% sales lift.

But it wasn’t direct mail couponing or programmatic display advertising that accomplished this feat. It was TV — addressable TV, to be precise.

The beverage brand was one of 100-plus Starcom Mediavest Group clients that contributed to $300 mil-lion worth of addressable ads placed by the Publicis media network last

year. That’s twice what it was the year before. SMG started looking at ad-dressable TV a decade ago, introduced pilot programs in 2013, took it to the open market in 2014, and moved be-yond tests into always-on flighting in 2015. The data flow and the set-top box technology had finally caught up to the desire for a more targeted ap-proach to advertising on what is still the number one media channel (see table on next page).

Americans, on average, spend about four hours a day watching video content on TV versus only one hour on digital devices.

“It turns out that all things are not Nielsen and programmatic ad-vertising,” says Tracey Scheppach, the EVP who runs SMG’s ad-dressable forefront. “We are doing addressable in 42 million house- holds in the U.S. today, and several

agencies are very involved in the mar-ket. We’ve greatly increased our ability to do one-to-one delivery. TV is poised for a transformation like you’ve never seen. It’s been stuck with Nielsen until this 42 million came along.”

Digital ad spendHere’s how it works: An advertiser de-fines a target and provides customer data. The TV provider adds subscriber data and the files are sent to third-par-ty “safe havens” (so called because they strip personally identifiable infor-mation) such as Axciom or Experian for matching.

The segment files are then returned to the TV companies. The number of those companies with set-top box-es equipped for the task is constantly growing and now includes Cablevi-sion, Comcast, DirecTV, Dish Net-work, and Verizon Fios.

Addressable TV Isn’t On the Way; It’s ArrivedThe Golden Age of television advertising may just be arriving. More than 40 million households can be pinpointed with relevant TV spots. By Al Urbanski

“We’ve greatly increased our ability to do one-to-one delivery. TV is poised for a transformation like you’ve never seen“ — Tracey Scheppach, Starcom Mediavest Group

AVERAGE TIME SPENT PER DAY WITH VIDEO BY U.S. ADULTS BY MEDIA, 2011–2015 (HRS:MINS)

■ TV ■ Digital video devices*

Note: Ages 18+ ; time spent with each medium includes all time spent with that medium, regardless of multitask-ing for example, 1 hour of multitasking with digital video while watching TV is counted as 1 hour for digital video; *includes time spent watching digital video via game console, connected TV, or OTT device

4:38 4:31 4:22 4:15

0:36 0:50 1:03 1:16

20122011 2013 2014 2015

“We’ve got 32,000 bits allocated to us in the set-top box. Any kind of data at all can be ingested and used to target viewers. We can identify any-thing you want. We can even identify a left-handed juggling clown,” points out Michael Kubin, EVP of media at In-vidi, one of the chief technology plat-forms powering addressable TV.

Invidi taps click-stream data, view-er patterns, census data, and ZIP+4 — even remote-control usage — to determine a viewer’s age, gender, in-come, and location. Company liter-ature claims to be able to “pick and choose TV viewers with the same ac-curacy as direct mail.”

The new TV universeThird-party data providers such as Ac xiom — which launched Acxiom TV and the Audience Interconnect platform to help clients pinpoint TV audience segments last month — are hoping to become the Nielsens of the addressable TV age. The business unit grew out of Acxiom’s December acqui sition of Allant, a third-party TV data management company whose cli-ents include Comcast and Dish.

“TV is changing in a big way,” says Rick Erwin, president of Acxiom Audience Solutions. “It used to be a house appliance that received one pre-fixed signal. Now it’s about receiving video content through a device.

“The cable and satellite operators who operate those devices control two minutes of every hour to run their own advertising inventory, and now they can use those two minutes to deliver ads that will be more meaningful to the consumers receiving them and to their partners.”

Kubin says that the outermost uni-verse of households reachable by ad-dressable TV ads is now 68 million, a number that is attracting pharmaceuti-cal, consumer goods, automotive, and financial companies. As election frenzy heats up this year, addressable is sure to get a workout from political campaigns — especially congressional and even mayoral can-didates for whom TV has always been too wasteful. Presidential candidates, meanwhile, will use addressable’s seg-mentation capabilities to target appeals to women, seniors, likely voters, or vot-ers holding back on the fence.

“We provide the efficiency of reaching only the households that [candidates] want to reach,” says Mark Failla, director of polit ical ad sales for D2 Media Sales, a joint effort of Dish Network and DirecTV. “Think of how revolutionary that is. Addressable TV enables us to keep all the impressions within state boundaries.”

Like data-driven marketing on the Internet, addressable television plat-forms such as Invidi’s use metrics to track results, refine lists, and improve future outcomes.

An SMG study of 20-plus address-able campaigns run between 2013 and 2015 discovered a 37% increase in CPM efficiency for its clients. Failla says presidential candidates will surely apply such efficiencies to the medium that has long been the biggest drain on their budgets.

“The back-end reporting that we provide is able to show how many of those households we actually reached and with what frequency,” he says. “We can show the number of impressions by day part and day of the week for the top 25 cable networks. This can inform other media buys.”

SMG’s Scheppach thinks that, giv-en time, addressable TV will kick pro-grammatic Web advertising’s butt.

“Addressable is programmatic, yet not automated,” Scheppach points out. “TV doesn’t really need automa-tion, because it’s not time-consuming to buy. It’s fairly easy to buy a billion dollars of TV time.”

“What’s more, it’s a closed ecosys-tem,” she adds. “No bots can get in there. And there’s no below the fold. The only non-viewable ad is when you go to the bathroom.” n

0:21

4:35

F ostering collaboration and pushing for collective change take effort and planning. Both are worth it because they lead to shared

customer insight that better informs marketing initiatives. Those were among the main themes in a spirited talk at The Economist’s Marketing Un-bound conference.

“Marketers don’t spend enough time thinking about how to create teams,” said Jon Potter, CMO and EVP at Moët Hennessy U.S.A. Potter pointed to sports players as models that marketers can pattern their team culture after. “The great thing about sports teams is that they have a col-lective vision,” he said. “They under-stand the competition but don’t try to be the competition. But they do cre-

ate moments. As marketers, we don’t do enough of that. Find ways to learn from the competition, keep your own identities, and make moments.”

Not surprisingly, NFL CMO Dawn Hudson, said her organization thrives on a team-oriented culture. She noted that its marketers need to meet same collaborative and cooperative expecta-tions as are on the field.

One of the best ways to promote team spirit, Hudson said, is to evolve and work through changes together.

“In fact, we’re on a journey to do things differently — we have to,” she said. “And when there’s disruption, turmoil, and change people are more receptive to doing this differently.”

One change the NFL is working to make, Hudson said, is to correct the wrong assumption that the organi-

zation has a small female fan base — a perception that she says is dated and untrue.

“Actually, the NFL’s fan base is 46% female and has grown 7% in the last five years,” she said. “Females make up 37% of our avid fan base.”

Understanding the true makeup of the NFL’s fan base enables its market-ers to create the right messages and content. Women [statistically] place more value on escaping and spending time with friends,” she said. As part of marketing to its female-heavy fan base, the league’s marketers embraced cause marketing, focusing on issues such as domestic violence and physical health that are important to women.

A deep understandingHudson and Potter agreed that a deep understanding of an audience allows marketers to target with agility. “But don’t let traditional practices limit who you’re identifying as your customers,” Potter warned. He said the marketing team at Moët Hennessy works to con-nect with the more intangible elements that bond people together.

“Connect timeless aspects with modern-day culture,” he added. “That’s when you connect the mind-sets.”

Hudson agreed, saying that market-ers should target mind-sets, not demo-graphics. “You can’t really segment on demographics,” she said. “Segment by mind-set, behavior, and attitude. Atti-tude is key because those connect you. Brands connect with emotions.”

Both Hudson and Potter said that with the right goals, resources, and un-derstanding of an audience, marketers can uncover what’s most important and impactful to consumers. n

At the NFL and Moët Hennessy, Collaboration Leads to Insight and ImpactChief marketers at the NFL and Moët Hennessy reveal how camaraderie enables a shared understanding of customers that leads to better marketing decisions. By Natasha D. Smith

NFL CMO Dawn Hudson pointed out that 46% of the league’s fanbase is female

T he majority of marketers plan to step up their email budgets this year. They have the opportunity to step up engagement, too, if

they dedicate some of that but to in-creasing personalization.

That’s the takeaway from Get-Response’s new report, The State of Email Marketing by Industry. Re-searchers surveyed more than 1,800 email marketers in myriad industries, including consumer goods, education, finance, health, information technolo-gy, marketing services providers, me-dia, retail, travel, and transportation. The study found that 57% of market-ers will increase their email budget in 2016 and 28% plan to keep it the same; a mere 2% said they plan to decrease their email marketing budget.

The report provides a side-by-side industry comparison in several areas. It shows that the consumer goods indus-try has the highest open rates (41.4%),

followed by travel and transportation (31%), education (24.7%), vacation/hotels/leisure (22.3%), media (19.4%), and heath and wellness (19.1%).

Across those distinctly different industries, researchers found that the largest percentage of those surveyed — 23% of email marketers — dubbed lead generation as the greatest benefit email marketing. That’s followed by improved sales (19%) and improved conversion rates (17%).

Email automation proves popularPerhaps not surprisingly, those sur-veyed named email automation as the most common technique to drive ac-tion from recipients. Seventy-five per-cent of respondents said they are using email automation. Compare that to 58% who said they use personalization techniques. Similarly, 58% use varying levels of segmentation, from basic to advanced; just 18% said they are us-ing advanced segmentation. Forty-two

percent of marketers don’t segment their email messages at all. Only 17% of those polled said they use respon-sive design.

Without question, all marketers want their email messages to be effec-tive. But, on average, only 21% of mar-keters across industries said that email marketing delivers an excellent return on investment.

Here are a few notable best practic-es listed in the study:• Track and test metrics that match the campaign goals.• Create holistic email marketing plans that widen the focus from email-only strategies to methods that include all messaging sources.• Optimize the sending frequency of your company’s emails by using met-rics that gauge sales, revenue, down-loads, and unsubscribes.• Don’t over-promise in your email subject lines.• Test and optimize continually. n

Email Marketing Isn’t as Personal as It Could BeAlthough 58% of marketers polled use personalization in their email marketing, just 18% use advanced segmentation, according to a new report. By Natasha D. Smith

C oming up with new cam-paign ideas is part of many marketers’ cyclical routines. Brainstorm, execute, ana-lyze — wash, dry, repeat.

But for functional brands such as laundry detergent brand All, this pro-cess can be even more of a chore.

“Laundry is hard,” explains Lora Van Velsor, VP of marketing for the Sun Products–owned brand. “Nobody is doing more laundry. It’s not one of those categories where you can pro-

mote it and people will want to con-sume more of the product.”

Van Velsor wanted to find a way to boost engagement among its target au-dience (households with kids), expand its digital presence, create more of an emotional bond with consumers, and, of course, drive sales.

After learning a surprising insight from focus groups — that moms lov-ingly referred to their kids as Pigpens — All’s agency Merkley + Partners decided to tie the stain-fighting de-

tergent to the beloved Charles Schulz comic character.

There was another compelling reason, as well. According to a press release from last year, Peanuts has a brand awareness rate of 96% among moms, a daily readership of 45 million, and a social media reach of more than one billion impressions.

With this insight in hand, All launched a multiyear, omnichannel campaign leading up to and in con-junction with the November 2015 de-but of The Peanuts Movie.

Sorting through the channels The campaign, which debuted last March, kicked off with a national TV commercial in which the Peanuts char-acters were portrayed by live actors.

All supplemented the spot with content marketing and social activa-tions. The brand published a slew of articles on BuzzFeed — including a “Which Peanuts Character Is Your Kid?” quiz — and launched a search for the World’s Dirtiest Kid, a user- generated content sweepstakes in which parents could submit images of their own messy kids on social platforms for the chance to win free All and Peanuts products. The brand promoted the contest and linked to BuzzFeed articles on social. These posts were targeted at households with children. It also up-loaded its TV spot to YouTube.

Providing these digital and social touchpoints is important, Van Velsor notes, because it’s where consumers are spending their time. In fact, she says, All now dedicates nearly 30% of its total media spend to digital.

All Uses Surprising Customer Insight to Boost Engagement and Sales The laundry detergent brand partnered with The Peanuts Movie to launch a multichannel campaign designed to build brand engagement, increase positive sentiment, and drives sales. Here’s why. By Elyse Dupré

“Three or four years ago we spent probably less than 5% of our total me-dia spend on the digital space,” Van Velsor explains. “We really evolved that over time. Peanuts gave us a chance to bring that to life with the campaign. But probably two years ago we hit the 20% [or] 23% mark, and now we are at 30%.”

After launching the TV spot, which ran from March to October, All con-ducted market research to measure its ad’s reach, customer persuasion, and brand persuasion. “It was actually one of our highest scoring TV ads that we’ve ever developed,” Van Velsor says. “So, we knew we had a really hot idea.”

Loading up in retailBuilding on its initial success, All en-tered phase two of its campaign; from September to November it promoted the screening of The Peanuts Movie in theaters. This phase was more re-tail-focused. Consumers could earn $5 off their ticket to the movie by pur-chasing $10 of All products, taking a picture of the receipt, and then send-ing it to All by text, email, or online submission. Participants would then receive a code, which they would have to enter on the campaign’s website to receive a $5 e-Movie cash certificate.

All promoted the discount offer through targeted social posts, in-store activations, and retailer and film part-ners’ websites. It also launched a new television commercial, made in part-nership with The Peanuts Movie’s an-imation company Blue Sky Studios, that mirrored the same CGI anima-

tion featured in the film. This spot was posted on social media, as well.

But the campaign didn’t end with the final screening. The third phase of the campaign, which launched this past February and ran until the end of April, centers on the Blu-Ray, Digi-tal HD, and DVD release of the film. Much like the previous stage of the campaign, consumers can earn dis-counts for the movie by buying some of All’s products.

Consumer incentivesWhen consumers purchase $10 of the brand’s products and the movie, they can receive a $3 mail-in rebate by send-ing All their original receipt and mail-in rebate form. The form asks customers for their name, address, phone num-ber, email address, and UPC number for purchased All products, which Van Velsor says the brand can use for future marketing initiatives. “It’s about getting consumer information where they want to share it,” she notes.

In terms of promoting this phase of the campaign, All is encouraging con-sumers to participate in the mail-in re-bate offer through targeted social posts that link to the brand’s website. It’s also running another TV commercial to drive awareness for the movie’s Blu-Ray, Digital HD, and DVD release, as well as print and in-store ads.

Although All is still accumulat-ing results from the latest stage of the

campaign, the results from the earlier phases have been positive.

According to Van Velsor, the brand’s engagement rates are now 2.5 times higher than the industry’s average, and positive social sentiment has jumped 23%. The company also experienced a 4% lift in total U.S. dollar sales in Q4, even though Van Velsor explains that sales in the overall category grew under 3%.

All has been able to sustain this growth, too. When Van Velsor spoke to DMN in mid-March, she said that the brand had experienced a 7% growth rate in U.S. dollar sales over the past 12 weeks, surpassing the industry growth rate, which she noted was 5%.

In fact, the campaign has been so successful that Van Velsor intends to continue All’s partnership with the Peanuts for years to come.

It seems like Van Velsor has been able to take away some lessons, too — mainly that she can bring fun to a practical brand.

“Laundry doesn’t have to just be about ‘here’s a stain demo’ or ‘here’s me pouring laundry detergent into a washing machine,’” she explains. “I can actually build the business through engaging emotional lifestyle commu-nications that sell the benefit, too. In a category that tends to be overly func-tional, it’s great to see that something like this can break through and still bring the benefit to life.” n

Van Velsor wanted to find a way to boost engagement among its target audience, expand its digital presence, create more of an emotional bond with consumers, and, of course, drive sales

A ccount-based marketing isn’t new, but its recent rise in popularity is cap-turing the attention of B2B marketers looking

for innovative ways to increase mar-keting performance.

Although ABM offers the promise of a competitive advantage, it isn’t an ideal fit for many organizations.

“At face value, ABM sounds easy to understand,” says Mark Ogne, EVP of partner marketing at Demand Met-ricand founder of the Account-Based Marketing Consortium. “But it’s not just a tech platform. It involves chang-ing the campaigns, content, and audi-ences that marketing is known for.”

These characteristics prequalify an organization to look deeper at ABM:

• A business-to-business model. Al-though households can have multiple stake holders in large purchases, the account concept is most applicable to B2B firms.• High-value products or services with a lengthy consideration-to-purchase cycle.“If you’re highly transactional and your customer lifecycles are fast-moving, it won’t work,” says Micky Long, VP and practice director at dig-ital agency Arketi Group.• An account-based sales model. Athough not mandatory, it usually in-dicates that the other characteristics of the company and its customers war-rant the adoption of ABM.• A keenness to understand the buyer’s individual experiences and challenges as they are, not as you hope they will

be. “You can’t just name 20 accounts and then throw generic marketing and advertising campaigns at them,” says Beverley Burgess, senior VP of ITS-MA Europe. “That is not ABM.”• The willingness to look for pros-pects and opportunities outside the traditional funnel. ABM represents a deliberate shift away from standard marketing automation practices of re-cent years that focused on giving pros-pects abundant opportunities to raise their hands and opt in to the funnel.

Go outside the traditional funnelThat last point is crucial. In fact, ABM expert Jon Miller says he became a proponent of the approach precise-ly because he hit a wall with standard marketing automation. Speaking of his time as VP of marketing at automa-tion vendor Marketo, he says, “We got well-known for being a company that was extraordinarily good at demand generation, but when we tried to move up-market, that playbook just didn’t work with larger, named accounts.

Developing an account-based strat-egy ultimately inspired him to cofound Engagio, where, as CEO, he’s trying to do for named-account marketing what he once did for large-scale market-ing automation. “We want to get B2B marketers to the point where they’re not waiting around for the right people to swim into their net, but can reach out to them.”

Big-ticket B2B purchases typically need the involvement, support, and approval of multiple stakeholders. For years account-based sales techniques have focused on the approach of ma-neuvering between business users, champions, and executives. ABM brings a similar approach, aim-

The Magic of Account-Based MarketingFrom building personas to improving sales alignment to increasing lifetime value, ABM may seem like the B2B marketer’s panacea. Here’s how to decide whether it’s right for you. By Jason Compton

ing to engage, educate, and activate the right individuals within a viable pros-pect organization at the right time. It doesn’t mean forsaking a one-to-one approach to marketing; it simply ad-dresses the complexities of the consid-ered purchase.

“ABM recognizes the B2B reality that organizations buy through buy-ing centers. There are individuals in-volved, and it’s good to identify them, but ABM offers a more holistic pro-cess than finding a name or email ad-dress, firing up the nurturing process, and aiming all the guns at that one lead,” says Jerry Rackley, chief analyst at Demand Metric.

A different focusVideo advertising platform vendor Vidyard recently switched to ABM for large accounts. The drive started, as it often does, in sales, where the compa-ny added enterprise account represen-tatives and implemented a territory- and account-based sales model. Then marketing followed suit.

“Twelve months ago the focus was on lead volume and flooding the sales team. Today we’re driven by pipeline and revenue, not volume of leads,” says Tyler Lessard, Vidyard’s CMO. “We care about lead quality and the kinds of companies we think our peo-ple can sell into, not just finding every-body connected to sales and market- ing activities.

Vidyard works with Terminus and The Big Willow to identify patterns of intention and then target messages into those accounts.

The firm monitors for companies actively hiring video marketing pro-fessionals, performing high search volumes on related terms, or scaling up the activity on an in-house You-Tube channel. Behind the scenes, Vidyard automatically tailors con-tent to suit those signals, and per-forms coordinated sales and market- ing outreach.

Lessard credits the ABM approach with the recent signing of a glob-al insurance company — a vertical the company had paid little attention to in the past. In fact, the client was

once rejected as a qualified lead under conventional marketing metrics. “Ev-erything we knew about their business had them below a [quality] lead score, but the real-time intent information tipped them over and spawned a cam-paign,” Lessard explains. “Once we saw data around the technology they were thinking of using, we put them in our account marketing and sig- naled our sales team to actively start their process.”

ABM forces marketing organiza-tions to set aside their usual points of pride, like keeping the funnel full, in favor of approaches that focus on qual-ity over quantity and reaching pros-pects before they even know they’re in the funnel. “It’s a change of mind-set from what B2B marketers have his-torically done, like focusing on getting people to come to events and put busi-ness cards in fishbowls, or buying ran-dom lists,” says Doug Bewsher, CEO of Leadspace.

Associating individuals with ac-counts rather than thinking of them as a standalone lead is a major first step. Taking a page from account-based sales, and staying in alignment with their approach to the prospect, is the next. “If a lead comes in from a cer-tain account, are you making sure you route it to the relevant salesperson as-signed to that account? It’s simple, but very few are doing it,” Bewsher says.

New toolsOn the technology side, ABM-focused vendors are hitting the market with new tools for prospect identification and targeting.

The usual focus is to deliver target-ed display advertising and content to organizations that are showing signs of being in the market, even if they ha-ven’t begun a formal evaluation pro-cess. One typical approach is to pair IP addresses with corporate identities, making it easier to identify when a particular company is searching for or engaging with relevant content.

“Display ads for B2B are tradition-ally a huge waste of money because you reach people who may or may not be buying what you’re selling,” says

THE NUMBERS

2/3 B2B marketers who

claim that ABM is favorably impacting their revenue

80% Markers who use ABM that say it’s the most or one of the most important revenue-generating

strategies they use

84% Users of ABM with mature

programs who collaborate closely with their counterparts in sales

63% Users of ABM with mature programs who use data to

drive account selection

60%Users of ABM with mature

programs who use it for both prospecting and

customer retention

55%Users of ABM with mature

programs who use it to support account profile development

Source: Account-Based Marketing Consortium, Demand Metric

Demandbase CMO Peter Isaacson. “With ABM, if your target audience is 500 companies and you only want to target those 500, you can now pur-chase advertising to display only to those companies you’re interested in.”

“We’re taking a page from B2C,” says Sangram Vajre, cofounder and CMO of Terminus. “In B2B, you know which companies are going to buy from you and who the decision-mak-ers are, so why wouldn’t you do everything you can to get in front of them when they’re making the purchasing decision?”

Veracode, a vendor of enter-prise application cybersecurity, worked with Demandbase to help focus its ABM-based approach to selling into the Global 2000. “Our biggest focus now is on landing net-new [customers],” says Patty Foley-Reid, Veracode’s director of marketing programs. Sup-porting that effort meant a heavy emphasis on providing sales with actionable intelligence on a small number of contacts, rather than delivering a high volume of leads.

“We can see spikes, when people from certain companies are coming to our website. With-out knowing them as a lead, we still capture the intelligence that something’s going on at that com-pany we can take advantage of,” Foley-Reid says. “That’s intelli-gence — marketing connecting the dots for sales so sales can act on it, and make their next phone call [to the prospect] that much more effective.”

Marketing’s new roleThe importance of marketing’s align-ment with sales cannot be overstated. In the Demand Metric study “Ac-count-Based Marketing Adoption,” conducted in partnership with De-mandbase, 60% of organizations us-ing ABM report a revenue increase attributable to the strategy, and most of those reporting success enjoyed a boost of at least 20%. The laggards hadn’t put their houses in order first. “When we looked at the 40% using

ABM but not getting a revenue lift, they all rated their sales and marketing alignment poorly,” Demand Metric’s Rackley says. “Alignment matters.”

Marketing’s job is to listen, to advo-cate, and to add insights to the process at every step of a sale. Account-based marketing also relies on marketers to help sales take a longer-term view, rather than a narrow focus on quar-terly results. “You’re hardly ever going

to get a good hunter to nurture a lead. They don’t like to do it, perceive that they don’t have time to do it, and are probably no good at it,” says Dan Mc-Dade, president and CEO of market-ing services firmPointClear.

When collaboration software ven-dor PGi diversified its solutions and broadened its appeal beyond IT-mind-ed buyers into sales and marketing departments, it needed a new sales and marketing strategy. The expanded solution set and buying audience left the sales organization off-kilter, and

under conventional practices market-ing was ill-equipped to help. “It was up to sales to figure out who the best contact was to try to sell the product to,” says Jennifer Zember, PGi’s senior director of digital marketing. “Sales would think they weren’t getting enough leads, we felt we were sending enough leads and they weren’t follow-ing up.”

PGi’s sales and marketing depart-ments had always reported to a single executive vice president, but a shift to ABM made that alignment much more meaning-ful. “Today we work with sales leaders to understand what kinds of accounts we should be target-ing and which roles at those ac-counts are going to be the best for them to speak to,” she explains. “And we know how to target the right roles in each organization and make sure the salesperson is equipped with the right content for any buyer.”

That approach is table stakes for marketers using ABM. Mar-keting is responsible for identify-ing and understanding the trig-gers that indicate a prospect in the making, such as a company hiring a particular role or sudden-ly entering a new marketplace.

Developing content that can be customized in an automated fashion is essential, primarily to avoid the need for an impractical-ly large marketing staff to serve each account.

As useful as ABM is for cus-tomer acquisition, the approach

also creates opportunities to engage in a meaningful fashion with existing accounts in ways that increase future lifetime value. To be truly successful, however, this strategy requires com-pensating marketers for ongoing con-versions. “Often, your most valuable accounts are your current customers, but the traditional marketing model is focused on generating net new leads and some marketing departments don’t get credit if they generate a cam-paign response from a current cus-tomer,” Engagio’s Miller says. n

“We want to get B2B marketers to the point

where they’re not waiting around for the right people

to swim into their net, but can instead reach out to them”

— Jon Miller, Engagio

D ata without insight and application is just dis-connected numbers and information. According-ly, customer lifetime val-

ue (LTV) is just another figure unless marketers apply what they learn from it to their acquisition and retention strategies.

Formulas vary by brand and in-dustry, but the basic concept of LTV is easy enough to articulate. LTV at-tempts to express the stream of reve-nue expected from all of a customer’s future purchases, with a discount fac-

tor for future revenue, to capture the time value of money. More sophisti-cated LTV measurements apply other adjustments, such as a discount re-flecting the likelihood of churn, or an increase reflecting the likelihood of upselling or cross-selling a customer at a future date. “As you add in more el-ements, LTV becomes more accurate and actionable from a business per-spective,” says Wilson Raj, global di-rector of customer intelligence at SAS.

In fact, marketers can use LTV not only to determine how much to spend on customer acquisition, but also to

optimize their spending by selecting the right acquisition channels, driving retention decisions, and refining their assumptions. Here’s how:

Selecting acquisition channelsUsing LTV to guide channel selection for customer acquisition is a must be-cause acquisition channels, in turn, can have a huge impact on LTV. The obvious contributor comes from cost per lead or per conversion, which can vary wildly between channels. The more subtle effect comes from the propensity to become a repeat cus-tomer, which some brands observe is significantly different depending on the point of initial contact. A customer obtained through a third-party daily deal site might be less likely to commit to future purchases than one obtained through organic search, for example.

This puts the LTV focus at the top of the funnel, guiding how acquisition budgets are not just determined, but are spent. Although these LTV models can be predictive in nature, they tend to focus on backward-looking data, based on the recency, frequency, and monetary (RFM) characteristics of historical customers acquired through those channels.

“You can add in hypotheses and simulated events to test out scenari-os, like next year’s purchasing cycles being different,” says Jonathan Beck-hardt, founder of DataScience.

Particularly for brands offering a product where renew-or-churn de-cisions are made on a regular basis, marketers can introduce predictive an-alytics based on signals received at and

3 Ways to Use Customer Lifetime Value to Optimize Marketing SpendLTV is useful for far more than determining how much to spend on acquiring customers By Jason Compton

after conversion to understand wheth-er a customer is likely to renew after the initial purchase, and even whether a customer will have the same needs or be facing the same slate of choices in the market.

Driving retention decisionsMarketers can also use LTV inform decisions about how best to nurture and retain customers, including which customers to focus on. These choices are more politically difficult, because an LTV model may recommend dis-regarding certain customers who pro-duce healthy revenue today but the model shows will become less profit-able in the future.

Financial services firms face these choices on a regular basis. Younger customers have few assets and need for financial products, but over a life-time may become highly profitable. Older customers have assets and prod-ucts already on the books, but have al-ready made most of the major financial services purchases they will ever need in their lives.

LTV can help marketers from any industry determine on which custom-er segments to invest their retention dollars. Marketers can also use LTV calculations to take early action and cultivate brand engagement that tends to lead to loyalty and future purchases.

These forward-looking models suc-ceed most when marketers also use them to find lookalike customers —

prospects who have the characteristics for long-term profitability based on behaviors and traits of current high- value customers.

One caveat: Using LTV to make retention decisions regarding longer- term value can be a tough organiza-tional sell because of pressures to re-alize revenue today, or at least before the end of the quarter. “You have to be able to tell a story longer than 90 days,” says Rob Heiser, CEO of Seg-mint. So, these decisions require stake-holders — and shareholders — who believe in the models.

Refining assumptionsLTV provides a momentary snapshot based on a set of assumptions. So, to make the most of LTV, marketers must commit to continually reevaluate their models and their assumptions, and change behavior accordingly. The mobile carrier industry provides a perfect example of a major strategic change brought about by reexamining lifetime value.

For years, mobile carrier acquisition

strategies were driven by subsidized handsets, with the assumption that a customer’s long-term customer value would more than cover the discount on the phone. As regulatory changes made it easier for customers to change providers and carriers increasingly targeted each other’s customers with aggressive switching discounts, these LTV models proved unworkable. To-day the subsidy strategy is all but dead, forced out by a revised understanding of true lifetime value in this space.

No predictive formula can control for every product innovation, com-petitive shock, or black swan event that completely reshuffles the deck or threatens the viability of a brand. But customer lifetime value does give mar-keters a tangible, robust way to express the true worth of their company in the only way that really matters over the long term: the ability to turn future potential into revenue. After all, as Customer Portfolios CMO Nick God-frey asserts, “The value of a company today is the accumulated value of all its customers.” n

LTV attempts to express the stream of revenue expected from all of a customer’s future purchases, with a discount factor for future revenue, to capture the time value of money

Heard in the TwittersphereStuart Frost @antiquarianismMany audience segmentation systems are myopic & misleading — Mark Taylor’s alternative look at cultural participation data #globalcontemp

Andrew Griffith @andrewgrifMark @FTIconsultingEU says start with a data led segmentation and then add behavioural research to sharpen the insight. #analytics

Aaron Cohn @AaronTweets4UWould Nike market the same shoes to hikers and basketball players? Benefit segmentation is the key #mktg317a

Not your Bbz @TshepiKhan@rystudents The main take out was that when defining a target market for a brand it’s important2 consider all marketing segmentation factors

XXL solutions @xxlsolutions“Use customer segmentation before anything,” Colin Lewis, Marketing Director @bmiregional #AMC

Taylor Robison @Taylor_BlayzerA1: The continual advancement/refinement of paid social interest and behavior segmentation abilities. Facebook is a prime example. #BW_Chat