In today’s multichannel world, it’s essential to interact with customers in the way that they want you to. How you handle this stage of the process determines your success. You don’t want to inundate customers with irrelevant offers. It’s all too easy to overcontact your customers and drive them to opt out. It is also too easy to overlook valuable clues that a customer offers up in the natural process of browsing your website, clicking an e-mail link or scanning items in the store.
Here are eight key steps of the marketing cycle where analytics can have an influence. Savvy marketers will exploit customer analytics to excel at each step of this continuous, closed-loop process:
Step 1: Manage quality customer data
Data that currently resides in functional silos across the organization must be integrated – and transformed by analytics into proprietary customer intelligence that is made available to marketing decision makers.
For example, we worked with a casino that included a number of businesses – hotel, spa, shops and the casino itself – all under one roof but maintaining separate data. A single customer could patronize all of those businesses, and the business didn’t keep a consolidated record of it. After consolidating and aggregating the data, they had a better view of their patrons and could really use that information for better marketing and customer service. This concept applies to most any business.
Step 2: Create customer insight
Exploit predictive analytics to truly understand customers – not just past behaviors, but likely future preferences and purchase patterns. This knowledge enables you to anticipate customer needs, improve customer retention and identify opportunities to cross-sell and up-sell. Analytic insight at this stage can deliver as much as a 30 to 35 percent gain in retention.
Step 3: Profile and segment customers
Analytics makes it possible to develop customer profiles and segments based on a customer’s historical behavior, profitability and future potential. Historically, segmentation has been used only to support product-push marketing models, but today many companies are using it to more closely understand customers and drive customer-centric strategies, even in a product-centered organizational structure.
Step 4: Develop and optimize segment strategies
What unique treatments should each customer receive? What’s the best bundling of price and promotion? What is the best strategy for up-selling, cross-selling and retention efforts? Armed with richer customer insight and targeted customer segments, marketers are becoming more selective about where they invest resources – and in some cases, which customers they will even accept.
They can now accurately determine how much time, effort and resources to put into each segment – a mathematical optimization of revenue, profit, price, channel capacity, budget and other factors. And they can track relationships on a one-to-one level and as they evolve over time.
Step 5: Engage effectively with customers
Naturally, marketing success stems from targeting the right customers with the right offers at the right time – even in real time – while prudently avoiding spending on unprofitable prospects. With deep customer insight and the right supporting technologies, marketers can effectively manage the customer dialogue across
multiple products and channels, balancing the realities of budgets, sales capacity and other constraints.
It’s very important to have the process and technology to support this engagement across all contact channels.
Step 6: Measure and report on all aspects of the marketing organization
Deliver the information that marketing team members need, in a form they can use to support decisions and understand their contributions to overall success.
If you can’t measure it, you can’t improve on it, so it’s critical that you measure all the parameters and metrics that are important to your business. Only with credible metrics can organizations align activities to strategies and goals, and improve the performance and accountability of marketing, sales and service.
Step 7: Optimize investment across direct and indirect marketing
Analyze and optimize marketing mix elements, such as advertising, promotion and pricing; media plans by medium and market; and customer segmentation and treatment strategies.
Juggling all these elements used to be an act of faith and intuition, patched together manually from many internal and external inputs. In today’s world, marketers should have ready access to quantifiable evidence to make those decisions – without days or weeks of detective work.
Step 8: Continuously learn and improve
Download the white paper: Capturing customer value in a multichannel world