Customer World

Multi-channel marketing poses new data challenges

The world of database marketing has changed since the time we knew it . There were only a few options as one knew it - lists - internal/ external, direct mail and telemarketing a decade or two ago. Today, for companies, customers come from different channels - social media, mobile, website leads thro' SEM or SEO etc. There is a need to track this customer data, organize them in a manner to know where they are coming from, is becoming increasingly critical. Before they know, many customers reach-out to companies from many channels available, in no time, which are available to them. This leads to multiple responses, follow-up and absolutely wasted marketing monies & more importantly a frustrated customer! Only when they organize and track this data across channels can companies do systematic campaigns & profiling of these customers. Not many companies are ready to handle this challenge. In my view, they are sometimes blisfully unaware of the problem and how to manage them!

It starts by building clear customer paths on how customers can potentially reach out to these companies, how they need to be tagged, scoring them by their interest and value, allocating them to an appropriate channel with clearly laid-out follow-up programs by channel. 

Deb Campbell of Clario Analytics has written a nice article on this topic:

Marketers still need to gather and keep the best data they can on their customers, understand them, segment them, track them over time, do some predictive modeling to market relevant to them and target new prospects most like them....Today, marketing channels are exploding all around us, not only with e-mail, search and display ads but also with all the social networking sites.

How does all this affect database marketing?

While the multiplication of channels can make tracking harder, and as a result make it more difficult to amend a database, you still need to know your customers’ needs and wants, and market to them one-to-one. Database marketing best practices haven’t changed as much as how you implement them.

You may have customers who are Internet-savvy and want messaging sent to them digitally. You have to target them, and those like them, in this way. Perhaps another customer segment prefers sales reps to contact them.Where database marketing pays here is that all this information can be captured.....

The solution is to keep your database as up-to-date as possible, with changes of addresses and e-mails, titles and positions. Track and segment your database at both levels, and target prospects with similar preferences and behaviors.

Is the future of customer management in hosted solutions?

Destination CRM has an interesting article this trend. The article highlights the following facts:

Recent research from Gartner analyst Michael Maoz predicts that by the year 2012, 30 percent of investments in CRM will be via software-as-a-service (SaaS).

Gartner research indicates that the increased deployment of SaaS initiatives might have underwhelming implications for consulting and professional services. Maoz explains that many companies view software-as-a-service applications as plug-and-play. The implementations lack process involvement and merely connect applications in the cloud, rather than looking at the bigger picture of business process management. "CRM is not just the technology," Maoz expels. "It's more an issue of ‘How do I interact with my customer?' Using some of these SaaS applications without changing the business process could be just enabling [organizations] to do bad things even worse." In other words, without a bottom-up approach, deploying new applications in the cloud is automating a tired or flawed process. "Using software-as-a-service is not going to help CRM," Maoz states. "We shouldn't be enamored by cloud computing instead of in lieu of process improvement."

My View: I can't agree more with Gartner on this trend. Increasingly, clients will prefer this as a hosted and managed service. In fact, the second part of the article seemed more important to me. It's not only important to have SaaS as a model in customer management but the ability to understand the process and business impact & action is a key need where I see is a huge gap that exists currently in such models.

I believe there must be 4 stages before implementing SaaS in a customer management environment:

Stage 1: Define your CaaS : Customer management as a strategy - How are customers or prospects being defined by current and prospective value, opportunity and segments?

Stage 2: Define your IPPM: Set-up a clear interaction planning and process mapping & migration  of your customers and prospects.

Stage 3 : Implement SaaS:  Once you have done the above 2 stages, then plan your SaaS roll out.

Stage 4: Plan the analytics,campaigns & metrics: SaaS is just the start but post customer management in SaaS is critical. The analytics around customers, campaigns around potentially valuable segments and tracking key metrics is often overlooked.

Getting IT to become customer-centric - Here's a 11 point plan to get started

Vince Kellen, a senior consultant with Cutter Consortium, a leading IT Advisory firm's 11 point plan to focus IT on customers resonated with me. I have been over the last couple of months writing about the need for IT to become customer-centric. In fact Forrester has been evangelizing the need for IT-marketing partnership. Here's his plan and they seem extremely perfect to me:

According to Kellen, once CIOs get their "trains running on time," they should build a multifaceted plan to reorient their IT shops around the real customer, the one that gives the firm money. The multifaceted plan can involve the following:

1.Establish a culture of customer service within IT.

2.Within IT, build intellectual capital of deeper customer issues, not just intellectual capital into technology architectures.

3.Bring this intellectual capital as a value-add service to the other parts of the firm, including marketing, sales, logistics, and service.

4.Start fostering innovation. Contribute to, if not lead, R&D in customer-centric IT.

5.Prioritize improvements in parts of the IT infrastructure that can address the technology or business process shortcomings, especially customer data quality and data integration.

6.Revamp IT processes that support the real customers and improve IT support service levels.

7.Help the firm identify gaps in the customer's experience and how IT can assist in closing those gaps.

8.Build an IT organization that is quick, flexible, adaptable, and reconfigurable so it can move fast on topical customer-facing initiatives.

9.Invest in the personnel and organizational development needed to make this happen.

10.Put into place strong usability and customer experience analysis methodologies that can uncover real issues with the customer experience and can develop real solutions.

11.Work with the other executives and ensure the IT plan is not only aligned with the business and customer strategies, but that the IT plan is actually challenging these plans and improving them.

 I have seen the benefits multiply with clients whom we work with in the last few years. It's time to get started now.

Personal Informatics - Are businesses leveraging this enough?

On the other day in a meeting, one of my clients was asking me what do I think is the future of emailing or direct mail or telemarketing or SMSes for prospecting or building relationships with customers? He was telling me how a lot of data may be available in the form of lists or transactional data within companies but companies today cannot contact many of these customers because customers are fed-up with the constant badgering by companies for more business using all these channels or they use the word   "relationship managers" ( who have access to data) in the garb of getting more business from them.

I couldn't agree with him more but here were my answers for these questions:

• Dynamic Data: Businesses today are dealing with customer data the same way they would have treated it a decade or two ago - Treating data as a static information versus seeing data as a dynamic element.  Therefore, they continue to use data for a  "business benefit".The customers of today are asking  businesses to reverse this approach - "Continuously allow me to connect to the 'data trail'  I leave behind". And businesses are struggling to cope-up with this change. Hence, they are still using 20th century marketing methods for 21st century customers which gives them diminishing returns.

• Adding data to products: Companies still treat products and data as siloes. Today, every product needs to have a data-component  as one of its ingredients.Just as a  body lotion has aloe-vera, banking products has internet/phone banking as new features, many products need to find ways to embed data into the product development framework.Then, up-selling & cross-selling happens automatically thro' customer participation and data triggers.

• Pre-sales service: Businesses have still not accepted that they are dealing with increasingly well-informed customers unlike the past. They still believe customers need to be "sold" but customers are constantly telling companies - " Help me buy!". They are becoming a part of different communities(offline & online) and also information-sharing among prospective customers today is far more easier then ever before. Hence, "being present"  well ahead of the sale is an important factor in pre-sales situations for companies. Helping in the pre-sales process is today a data-centric activity and this has not been recognized by businesses. Hence, the traditional methods of prospecting will only get more difficult in the future.

Welcome to the world of personal informatics

Using personal data will be the new competitive advantage, businesses have to prepare themselves for. It will create a new generation of products &  prospect or customer experiences that will capture data about us in ways we could never have imagined. Matt Jones & Tom Coates have a great presentation on this topic. Personal informatics will be an area that will see great growth in the future.

Take a look:

Polite, Pertinent, and... Pretty: Designing for the New-wave of Personal Informatics

view presentation (tags: dopplr fireeagle ui web2.0)

Transforming marketing data to enable decision management

Here's an interesting presentation by Jamet on using marketing data for decision management. Take a look:

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Preparing for a world when customer transactional behaviour changes!

The way customers pay and transact is undergoing a huge change. Today, most financial institutions have a trail of the payments, spends or usage in their transactional systems thro' many traditional payment methods. But, as these trends below show, there is a huge new revolution underway. If you are in the business of customer data & insight mining or in marketing to these customers, then get ready for paradigm shift in tracking & influencing their purchases.( Thanks David for this post)

Take a look at the trends:

1. Digital money
According to AC Nielsen, 90% of transactions in the US will be cashless by the year 2020. PayPal already has 63 million accounts, which makes it larger than most national banks,while in Korea during the month of June 2004, 300,000 people purchased cellphones into which you can insert a memory card containing all your financial data. So will physical money soon be a thing of the past? Most observers say yes, but don’t underestimate the power of human nature and tradition.

2. Contactless payment
McDonald’s is testing ‘contactless’ payment technologies in the US (and elsewhere). Just drive-in, grab your goods and drive off. Payment is made automatically by a wireless device on your windscreen linked to your bank account. Mobile phones can and will do much the same thing.

3. Pre-pay and stored value cards
10 million households in the US don’t have bank accounts and many of these use their pay cheques to buy pre-paid credit cards. Around 8.5% of households without bank accounts own pre-paid credit cards but this figure is expected to rise to 25% by the end of 2006. This is one reason why companies like Visa and MasterCard are getting into the act by signing up Rap moguls and singers like Russell Simmons and Usher to put their names on prepaid cards.

4. Private currencies
Pre-pay is a type of private currency in that you can restrict where people spend their money, in some cases to a single brand, outlet or service. This is good news for loyalty and also good (or bad) news for privacy depending on your point of view. For example, parents can give their children pre-paid cards with certain categories or locations locked off. However, the big news in private currencies is what’s happening in the air and in cyberspace. According to the Economist magazine, airmiles are now technically more valuable than the US dollar while over in cyberspace gamers are exchanging cyber dollars for the real thing.

5. Debt
The level of credit card debt in Britain has increased by 73% since 1997. The UK now holds 60% of all credit cards issued in Europe and has 75% of all European credit card debt. Spending on credit cards now represents 11% of GDP and 40% of people say they expect to use their cards more with the advent of new technology. Meanwhile, the amount owed to credit card companies in the UK now stands at GBP £53 billion. Figures for other countries such as the US and Australia are following a broadly similar trend. So what happens if (when) interest rates really go up? Trouble, that’s what.

6. Everyone is a bank
If everyone from supermarkets and search engines to phone companies and airlines offer banking services where does this leave the banks? The answer could be as back office low margin sub-contractors or maybe banks will re-frame themselves as ‘wealthcare’ businesses.

7. Micropayments
Once upon a time people used credit cards for big purchases like holidays. Not any more. Now you can buy a 99cent song on i-Tunes with your credit card or charge your hamburger at McDonald’s to your plastic. In 2004 the average credit card transaction in the US was $67.81. Back in 1999 it was $72.83. Add to this the possibilities created by contactless payment, stored value cards and pre-pay and you have a recipe for radical change in the financial services sector.

8. Proof of identity
With cases of identity theft going through the roof in most countries, there will be a boom for companies and technologies offering electronic and other forms of identity verification. There will also be an increase in products and services aimed at helping people get their identify back after its been stolen.

9. Mobile phones becoming wallets
Have you noticed how fewer people are wearing watches these days? Under the age of 21 a watch is almost a novelty as people use their mobile phones to tell the time instead. And so, the theory goes, phones will replace wallets too as people find it more convenient to carry their cash digitally inside their phones.

10. The death of cheques
  Seriously, who under the age of thirty uses cheques these days?

Planning for Enterprise Marketing Platform - Forrester's prescription

Suresh Vittal of Forrester released a report on successful implementation of Enterprise Marketing Platform couple of months ago. It had some interesting learnings for any enterprise planning to get this going in their organization. Here are some highlights:

• Pre-implementation planning should include a full data profiling exercise. Many marketers stop after a cursory audit of their potential data sources. But a basic data audit misses most of the data issues that marketers will encounter during the implementation. Profiling data early helps identify key data inconsistencies with sufficient time to solve them without any delays to subsequent phases. These inconsistencies stem from issues associated with data cleanliness, rapid acquisition of multiple data sources, and data-software incompatibilities. A leading retailer told us, "Our campaign management system likes data to be set up in a certain way. We spent one year structuring the tool to fit our data mart and then switched to organizing our data mart to fit the tool.
• "Major process and workflow revisions are par for the course. By their very nature, marketing automation tools make some processes obsolete and require the creation of others. As one large bank told us, "Marketers must realize that with automation they are capable of planning and executing 50 campaigns instead of three. This means that they will need to pay attention to workflow and analytics."
• Increased demand for analytical skills after rollout requires upfront planning. Traditional marketing practices place little emphasis on deeply understanding one's data — a required skill for using an enterprise marketing platform. As a result, the skills mix of most teams shifts after implementation, and on some occasions teams even undergo a complete reorganization. One large financial services institution found that, "The bulk of requests moved downstream. Marketers who originally dealt with campaign execution are now requesting campaigns and defining segmentation and offer requirements, with the production happening in the background."
• Technology support organizations are essential. Enterprise marketing platforms are complicated enterprise software, which require a technical background to install, configure, and maintain. Marketers should secure advice and assistance from their technology support teams for planning and defining requirements and dealing with integration issues and software upgrades post-implementation. One large insurance organization had its IT department write a portion of its request for proposal (RFP), while a large high-tech firm found great success in partnering with both finance and IT. In both cases, marketing retained ownership of the final decision, but it brought in experts for advice as needed.
• Change management and on-boarding takes longer than anticipated. With changes to process, technology, and skills, most marketing teams need time and resources to adjust. One enterprise-level, high-tech firm told us, "Don't try to shortchange the effort. Refresh it and keep it moving by focusing on process, culture, rewards, and behavior management." A large brand manufacturer told us "Scoping support was a challenge. We were taking a core tool used daily and completely replacing it with a new one. The team was busy just keeping up with campaigns, and now they have to make time to sit with the project team and learn the new tool."

Personal recommendations are more authentic

As many channels start to converge, the chatter among customers about products, benefits, uses, problems, referrals is increasingly gaining a lot of attention. It's so easy  today to get on to the web and know what customers think about your products. The ability to fuse this data along with your transactional & attitudinal data that lies within your organization and doing analytics on this information is going to be the next inflection point for marketers.

Here's a presentation by Paul Isackson that brings out the power of this chatter and influence on customer behaviour.

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Personalized communication - Is it lack of data or resolve?

The CMO council in its new global survey, "The Power of Personalization"  has some interesting pointers on potential opportunities that enterprises have in exploting this approach and strategy.

According to the survey:

• Inadequate customer data is the key obstacle facing top marketing executives in their adoption of personalized communication techniques.
• Many CMOs feel the process of developing individualized marketing messages is still largely under-utilized and under-tested.
• More than 55 percent of respondents plan to allocate 10 percent or more of their marketing budgets towards personalized communications, despite their reluctance to declare their personalization efforts successful in the past.
• Many marketers' programs have been deemed unsuccessful because of a lack of actionable customer data used in campaign planning -- as well as because of inadequate analytics used in assessing post-campaign effectiveness.
• 55.1 percent of respondents plan to increase their 2008 marketing budget allocations for personalized communications by more than 10 percent.
• 49.1 percent of respondents blamed "inadequate systems and infrastructure" for limiting personalized communication initiatives.
• "Lack of customer data and insight" and "cost and complexity" were also cited as major contributing factors by 46.2 and 43 percent of respondents, respectively.

My View: I personally believe that many marketing departments in companies are struggling with this new order of availability of customer information, left-brain marketing techniques(viz. analytics) and competency to leverage technology tools. Earlier they had to just "inform", now they need to use customer information to "interact". The traditional job roles and responsibilities need changes, as marketing departments need to have people who understand data, technology and interpret individual customer behaviour.I think marketers must learn to use simple tools, extract whatever data is available and show quick-wins rather than wait for technology infrastructure to be perfect to adopt this approach as they scale-up this kind of marketing. Also, product managers must also have under them customer information managers/ executives who could effectively lead this process. It is also important that the silos in organizations have to be brought together by the CEO to ensure information is used effectively for the enterprise rather than a particular line of business. May be new accounting methods of attributing income, because information of a line of business is used for the other, should be designed for wide adoption of such practices in enterprises.In my opinion, personalized marketing is more than just the 'intent', it is the 'intensity' that can make the needle move!    

Do you onboard your customers?

I am not always excited if somebody tells me I have acquired a new customer. I always look at what is in the plan of the marketing & product teams to make these customers use all the features and benefits of the product, so that these customers can be with them for life. Not too many companies pay attention to onboarding customers. They acquire and forget. Or they pay a lot of attention to how to acquire customers but not do enough review of what is done to keep and grow these customers. Kevin Zimmerman, Sr. Editor, at Peppers & Rogers writes:

Consumer electronics companies and retailers are finding out the hard way what happens when you don't educate customers. Take, for example, the recent situation involving the purchase of popular high-definition televisions (HDTVs). According to Forrester Research Analyst James McQuivey, 20 percent of the sets sold have been returned in some U.S. regions, in large part by consumers who didn't realize what they were buying. Per an ESPN/Knowledge Networks/Statistical Research Inc. study, only 64 percent of homes with an HDTV have HD programming via broadcast or cable, and 13 percent of people who own an HD set do not know if they receive an HD signal. McQuivey forecasts the 20 percent figure will drop moving forward, as more retailers see the need to educate customers about the format if they want to avoid such massive returns.

Who's responsible for customer education?

Henry Choy, senior analyst at Jon Peddie Research says ""The store should do a better job of educating customers, the documentation inside the box must be better, cable companies can get more involved,"..

For a moment, if we as marketers think like customers, then count the number of times we would have read an operating manual, the number times we would have used the features that we primarily bought the product for, the number of times a company that we bought the product from, called to tell you if you have understood the features and used them. In my case, it is close to zero. That's the opportunity waiting to be tapped - Onboard your customers and you will realize there's profits to be made for life.