Multi-Channel Analytics: The Answer to the "Big Data" Challenge and Key to Improved Customer Engagement
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The document discusses the significance of multi-channel analytics in improving customer engagement and optimizing marketing strategies across various channels. It highlights the challenges businesses face due to the increasing complexity of data from multiple marketing campaigns and the need for effective coordination to avoid miscommunication. Companies leveraging multi-channel analytics can enhance customer loyalty, improve marketing returns, and make informed business decisions by understanding customer behavior and preferences.
Multi-Channel Analytics: The Answer to the "Big Data" Challenge and Key to Improved Customer Engagement
- 1. White Paper Multi-Channel Analytics: The Answer to the “Big Data” Challenge and Key to Improved Customer Engagement
- 2. 2 What is Multi-Channel Analytics? By gathering and analyzing data from every marketing activity and channel source, the goal of multi-channel analytics is to enable companies to gain valuable business intelligence about their customers and prospects. Multi-channel analytics allows companies to more efficiently segment customers and to better understand what content and special offers to send, when, and through what preferred channels. Customer intelligence gleaned through multi-channel analytics provides a clearer picture of what integrated marketing content and channels are working (or not). With this information, companies can better plan future marketing programs and marketing budget to achieve a strong return on marketing investment (ROMI). Multi-channel analytics can be a game changer -- leading to increased sales, increased customer loyalty and enhanced customer lifetime value. ________________________________________________________ The Importance of Multi-Channel Analytics The ways in which B2C and B2B companies interact with their target customers has dramatically changed since the introduction of digital and social media in the last 10 years and as the number of marketing channel options expands each year. With more touch points and customer interaction opportunities available than ever before, research indicates that 65-70% of today's consumers have become multi-channel shoppers, using multiple channels to gather information on cost, benefit, reputation and such before making a purchase decision.1 The expanding touch points make it necessary for companies today to produce relevant, engaging content that is readily available for their target audiences through a wide array of channels (see Chart 1 for an overview of the most widely used channels). Chart 1 - Top 20 Most Popular Marketing Channels 1 Marketers' perceptions of implementation difficulties of multi-channel marketing, M.J. Valos, M. Polonsky, G. Geursen, A. Zutshi © Copyright 2013
- 3. 3 With more marketing content needed to populate the growing channel stream, companies are creating more marketing campaigns for the different channels and formats. Internal teams, such as product marketing, advertising, social media and channel marketing, now routinely develop and distribute integrated marketing content (with information on product development, special price discounts, new distribution partners, etc.) in an attempt to engage target audiences on an ongoing basis via multiple, but carefully chosen, channels. But in the rush to create marketing content – with companies marketing through more channels, managing more campaigns and dealing with more data than ever before – there is often little internal coordination or comprehensive understanding of what communications are being sent, by which departments or channel partners, and when. This creates the risk that an organization could negatively affect its own sales and profit margins if, for example, the digital marketing team sends an email discount coupon to a direct mail customer who was already planning to visit a store to buy a full-priced item that was featured in the catalog that came in the mail just a few days earlier. Companies that lack marketing automation to coordinate the Multi-channel analytics people, processes and technology that drives campaigns may leads to increased sales unknowingly bombard target customers with unrelated or and enhanced customer conflicting messages. This can result in unintended negative loyalty. consequences, such as a target “opting out” of receiving future emails from the company (for more on this topic, take a look at the Numeric Analytics' white paper, The Role and Value of Automation for Integrated Marketing Success, posted on our website.) It is imperative that companies looking to grow their customer base and improve their sales understand the net effect of their multi-channel campaigns and communications and how it is impacting (positively or negatively) their target customers at the various interaction touch points. Unfortunately, the reality for many companies today is that the sheer volume and complexity of data resulting from their multi-channel marketing activity leads them to poor analysis and fragmented tactics. Most companies find themselves struggling to collect and process the massive amounts of data being generated through a vast expansion of marketing campaigns run across numerous channels. This data glut often suppresses a full understanding of which marketing campaigns, content and channels are having the most success reaching and engaging target customers. The information overload is simply making it harder to find actionable customer insights (about preferred channels, timing, etc.). Without a collective insight of their integrated marketing results, companies may be spending precious time and resources on ineffective programs, content and/or channels. In such case, the undesired result will be declining sales and profits, eroding customer loyalty, and poor ROMI. © Copyright 2013
- 4. 4 The reality today is most enterprise resource planning (ERP) and customer relationship management (CRM) systems were not built for the needs of a multi-channel world and are not equipped to deal with the large volumes of data, particularly the unstructured data that results from online social media platforms, communities and mobile applications. Understanding Multi-Channel Buyers Understanding your multi-channel customers is crucial to business success. Research shows they are more likely to spend more money, buy more products and be more loyal than their single-channel counterparts.2 But providing target buyers with the right offer, at the right time, and through the right channel in order to gain more sales is not easy. Consistency and timing of messages sent by different teams (e.g., product marketing, public relations) via different channels (e.g., email, advertising, live event) needs to be coordinated to create a cohesive picture with no communication gaps. It is also important to understand generational buying habits and how different age groups use traditional and newer digital/social media channels (the following graphic, for example, illustrates the usage preferences of Baby Boomers compared to The Millennial). To be more successful, companies must gather and utilize valuable customer intelligence (via instore purchases, online research, etc.) to know what to offer, when and how to engage target customers based on their shopping behaviors (see box below with examples of multi-channel analytics at its best and worst). 2 Marketers' perceptions of implementation difficulties of multi-channel marketing, M.J. Valos, M. Polonsky, G. Geursen, A. Zutshi © Copyright 2013
- 5. 5 Multi-channel analytics at its best… Let’s pretend you are a big box retailer selling tablets. You send a potential customer a targeted email that links to a micro-site. That potential customer looks at a specific brand of tablets and then goes to the store. Instead of buying a tablet, he buys a soda and a DVD movie (we know this from the OCR data gathered when he swiped his loyalty card). Based on this info, and in an effort to prevent him from buying elsewhere, the retailer sends a follow-up email offering a tablet discount only available online. The next day, he buys a tablet online using the discount he received by email. And worst… A potential buyer does some online research and then goes into the store, looks at a lower profit tablet featured in the Sunday newspaper ads, and swipes her loyalty card when she buys a soda and DVD movie. After she leaves, the store sends a follow-up text message that continues to offer a higher margin tablet at a discounted rate (not taking advantage of the customer intelligence that should have been gleaned from the OCR data) and ends up selling her a higher profit product for less. The potential buyer was on the retailer’s website, but the retailer didn’t track her behavior (which indicated she was ready to buy) and instead offered an unnecessary discount. The net result is unnecessary discounting which translates into a lower profit margin. Marketing automation and analytics can offer a number of ways to improve marketing results and achieve competitive advantage, including: Ability to develop a comprehensive, multi-channel view that offers objective, comparative insights into which channels are most effective and why (channel use and preference). Provide insight for pricing strategies by channel (right offer, right place) to maximize profits. Provide more insight to better understand customers and reach them with compelling offers, helping gain more satisfaction and loyalty. Marketing automation systems are becoming advanced enough to allow certain events (e.g. certain behaviors or transactions) to trigger a response (such as sending a relevant email to a target customer), helping develop a stronger customer relationship. Multi-Channel Analytics... Not Just an IT Project As organizations move to adopt more integrated and socially aware technology systems that can manage the surge in structured and unstructured data, they will be better equipped to drive better business decisions, automate their efforts, and continuously drive measurable improvements through proven optimization techniques. From a marketing perspective, companies will better understand what marketing content, campaigns and channels are working best so that future marketing spend and effort is focused on the high value initiatives. © Copyright 2013
- 6. 6 To be successful, the entire C-suite will need to support the technology adoption and business transformation. Forrester states in its 2012 Big Data report: “Big data projects require business leaders to own the initiative because they – not the CIO or IT department – ultimately own the metrics and KPIs. Big data initiatives with little or no business involvement will ultimately fail.” Based on our extensive experience providing consulting and technology recommendations to clients wanting to create competitive advantage through big data initiatives, we agree with Forrester's viewpoint that buy-in and support from the CEO and business leaders is crucial to business transformation success. Multi-channel analytics reveal what marketing content and channels are working (or not). The Role and Value of Data Marts A key component to multi-channel analytics success is data marts, which contain a subset of data for specific departments or teams and accessed from an organization's central data warehouse. It is the access layer of the data warehouse environment that is used to provide business essential data to specific users so they can utilize specific data as needed, without altering the data from the central data warehouse. There are many benefits that result from creating a data mart, including: Contains only business essential data so it is less cluttered than the central data warehouse. Provides easy access to frequently needed data. Offers flexibility and agility. Creates a collective view by a designated group of users. Numeric Analytics offers a Managed Services Data Mart service that offers clients these capabilities: Get the right metrics defined through a discovery process and audit of current technology, data inventory and current capabilities of processes and people. Perform data integration and ETL (extract, transform and load). Create a single data mart of multi-channel data with mature metrics and measurement capabilities, defined metrics for the right type of action-able analytics, conversion spend, marketing effectiveness. Provide a strong visualization and reporting tool so people understand the analytics and get meaningful results that are actionable. Examples of data visualization include heat maps, geolocation maps, bubble maps and Venn diagrams. Deploy actionable alerts so people know when campaigns have hit certain goals or as a cost management tool to alert when costs have hit certain thresholds. Conduct data mining and statistical analysis to understand the trends of how each customer interact with each channel. © Copyright 2013
- 7. 7 Keys to successful data mart creation and implementation: Centralization: Get data and put it on one place (usually a cloud database that lives alongside other applications). Structured: Create a logical structure to store our marketing data – usually have lots of data but it is in disparate locations. Having the right structure is key. Historical: Need historical data to see ways things are trending on long term basis. An issue we sometimes encounter is clients not “pushing” themselves to create the right kind of data mart because it can be a somewhat arduous task; but the long-term business benefits and efficiency gains are worth the initial hard work. Rather than create a relational data model, some will simply stop short with reports built in Excel, which is not a viable long-term solution. This is a missed business opportunity. Choosing a Trusted Advisor According to Gartner, companies should seek an analytics vendor that supports at least one of these advanced functionality and execution components: To be successful, companies must gather customer intelligence to know what to offer, when, and how. Predictive analytics: This is the capability to analyze customer behavior to predict attrition/churn, next most likely purchase and propensity to buy, enabling a company to more effectively target customers or stage offers during interactions. Campaign optimization: This is the ability to balance and coordinate multiple constraints to maximize the expected value from one or multiple campaigns. Functionality enables tradeoffs among different campaign execution options, such as which campaign to use, which channel to use, the number of interactions per individual and the expected value of each campaign. Event triggering: This functionality involves the detection, prioritization and execution of a response for a significant event affecting a customer relationship. The functionality enables users to be aware of the time when a customer is most likely to be receptive to a particular offer. Real-time recommendations: This is suited for offer management, and deals with offer arbitration. It enables the combination of the most-up-to-date information from data collected prior to the interaction, as well as new data collected during a real-time interaction with a customer. This approach is useful when new data needs to be collected to refine an offer, or when new data indicates that a significantly different course of action is required.3 At Numeric Analytics, we have the consulting expertise and the technology resources through a network of leading technology providers to bring clients the necessary insight and action to achieve 3 Gartner's Magic Quadrant for CRM Multichannel Campaign Management report, May 2012 © Copyright 2013
- 8. 8 their marketing objectives. The core competency of Numeric Analytics is built on measurement and analytics. We can help your organization capitalize on data to drive better business decisions, automate their efforts, and continuously drive measurable improvements through experience and proven optimization techniques. Our Analytics and Optimization Team has helped many organizations manage their sheer volume and complexity of data leads to move from poor analytics and fragmented tactics in order to create competitive advantages with analytics. Our consultants can transition your organization from mere "testing" to strategic testing with a proven methodology that delivers exponential returns. We have successfully reworked entire testing programs for international companies, redefining the processes, the people and the platforms used to create world-class optimization programs. About Numeric Analytics Numeric Analytics is unique in its holistic approach. We have the skills, experience and proven methodologies to bridge the gap between building strategies and executing them. Since our founding in 2007, we’ve completed over 600 successful client engagements, including many Fortune 1000 companies. Over 500 million web pages are tracked through our implementations. And 65% of our clients re-engage us on other projects. No one else in the market provides the full spectrum of services that Numeric Analytics does. We understand your challenges and the issues surrounding marketing automation, from consideration to execution. Let us provide answers and direction to ensure all the variables are taken into account and that the best and most robust marketing automation solution is selected to drive your organization's integrated marketing efforts. Numeric Analytics takes pride in our mission to turn “insight to action” for our clients. If you found this white paper useful, check out “The Role and Value of Automation in Integrated Marketing Success” at www.numericanalytics.com or call us to schedule a free consultation. Visit us at http://www.NumericAnalytics.com © Copyright 2013