Marketing’s Big Data Mess

By Jeanne Roué-Taylor

If you think that marketing’s big data mess is related to the volume, velocity, and variety of data (the traditional definition of big data), you’re only partially right. The single biggest data problem that marketers face today is pulling together the right information to deliver to the right consumer at the right moment in time where it can make a difference. In a word, relevance.

Untangling the Mess

If marketers want to achieve the most important goal—being relevant to consumers—there are a few things they’ll need to do first. Here are three specific needs that marketers have to resolve:

Need 1: Marketers have to do whatever it takes to assemble the right data to better understand the behavior of consumers. Doing this involves pulling together and evaluating all customer touch points with a brand. This needs calls for an integrated approach to campaign management that allows monitoring and response to customer actions no matter where and when they occur.

Done well, this allows for predicting customer interests and identification of risks. It also allows for delivery of actionable recommendations that influence customer behavior in the moment.

Need 2: Marketers need to engage customers in new ways by designing interactions that are grounded in specific use cases. Those use cases must exceed customer expectations by delivering more personalized, relevant experiences and they have to execute in real time.

Need 3: Marketers need to develop new processes and skills across all functions (not just marketing) to transform the delivery of brand experiences. Only by a collaborative, across-the-business approach can the business impact of marketing be measured and validated.

These needs are a challenge but not impossible to meet with the right approach. TIBCO has taken a long look at these three needs before putting together a marketing platform that untangles the big data mess.

See the TIBCO Engage platform in action in our webinar on September 24th. Sign up today, or email engage@tibco.com for a demo.

If You Struggle to Be Relevant Today, What About Tomorrow?

By Jeanne Roué-Taylor

There’s an ongoing, symbiotic evolution of both consumer technology and consumer expectations that leaves marketers struggling to keep up. Adding to the challenge, the ways marketers have responded—by accumulating marketing point solutions—creates silos of customer data that solve portions of the problem while decreasing flexibility, greatly increasing the cost of doing business and, ultimately, making relevance an increasing challenge. What’s worse, many brands have a poor prognosis for keeping up with accelerating change. If this sounds familiar, don’t feel too lonely—you’re in great company.

So ask yourself, if you struggle to be relevant today, what will you do to be relevant to your customers tomorrow?

Digital Marketing Enters More Challenging Territory

Tomorrow will certainly be more challenging than today. Driven by consumers who are beginning to realize their own power, there are four specific trends that will stress marketing and even behind-the-scenes systems in new ways:

  1. Now. Consumers will want to interact anywhere and at any time. This has been said in the past but has been outlier behavior for the most part. The mainstream consumer is about to become the now consumer on mobile devices and also everywhere else they interact.
  2. Can I? Consumers will want truly new and valuable capabilities across a wide spectrum of information, to include diverse things like their financial services accounts and data being generated by physical activities. They’ll want to link information in ways that may be common to a group or unique to an individual. The more times the questions can be answered with “Yes, you can,” the better.
  3. For me. Consumers will expect the data that they’ve given up or created to be put to use wisely and in highly targeted ways. Giving up personal data will need to be a means to greater personalization, or it will be seen as increasingly invasive and unwanted.
  4. Simply. Interaction will be expected to be dead easy. As the mainstream takes the handoff from the early adopters, the number of consumers expecting simple, easy ways to interact will skyrocket.
There are signs of each of these in the market, but the combination of all four will push current systems and architectures to the breaking point.

Breaking the Vicious Cycle

While these challenges are daunting for many based on where they are today, it doesn’t have to be this way for you. There are four key ways to break the potentially vicious cycle of increasing consumer demand and increasing information complexity.

  1. Stop making the problem worse. Adding more point solutions to a silo’d environment is no solution at all. Step back and take stock of where you are and how you can simplify instead of digging the hole even deeper.
  2. Increase collaboration across business functions. Each touchpoint with the consumer offers a chance for increasing or decreasing relevance. By increasing collaboration, customer service, support, and other former silos can become a symbiotic, customer-serving machine.
  3. Start with the end in mind. Design thinking is a popular way to describe the process of taking a designer’s approach to understanding problems rather than tackling the challenge within the traditional engineering fashion. By starting with the end-goal of a simple, integrated, and collaborative platform, early decisions can be more simple than complex and more likely to anticipate and match consumer needs. Think of the end-user’s emotional perspective rather than simply what’s feasible through technology. Empathy, creativity, and rationality are the design thinker’s mantra.
  4. Make it highly personalized for every customer. Marketing is moving quickly toward individual-level personalization with all of the technology baggage that it requires.
  5. Predict what the customer wants. Nothing delights more than interaction that clearly shows that a brand is putting effort into anticipating your needs. More than personalization, this is the part where the consumer’s needs are known even before he expresses them.
  6. Reward loyalty. Once a brand can know its consumers, it can also differentiate those who come back time after time. Rewarding loyalty is table stakes in the struggle to be relevant.
  7. Do everything to create a seamless experience. This is the hardest, but most important, part. Regardless of what happens within the organization, the customer’s view needs to look unified and seamless. This requires a high level of integration and tools that monitor and respond, whenever and wherever needed.
If you’re in the middle of a struggle to be relevant, that means your marketing is facing the right problem. Getting there and staying there is going to require major focus on the factors described here. To learn more about how to be relevant today and into the future, check out the whitepaper, Marketing Transformed: Big Data Analytics and the Revolution of Customer Engagement and Experience Management.

Never Spread Your Marketing Spend Evenly

By Jeanne Roué-Taylor

Marketers shouldn’t spend their customer loyalty budget evenly across all channels or programs. Similar to other aspects of business, there are places where large ROI can be earned by spending disproportionately higher amounts—simply spreading efforts and funds evenly means missing out on those opportunities.

The High-Value Customers

Take as an example the disproportionate way high-value customers are followed and treated. We know that spending more to develop the relationship with a high-value customer not only creates a stronger connection, but also provides marketers with much better knowledge of preferences, propensities, and other insights.

A better relationship with a high-value customer has significant benefits beyond simply higher lifetime customer value. With better information, marketers can far more easily pick up important signals that include life-changing events and an increase or decrease in the frequency of visits. When a high-value customer’s normally stable signals change, there’s an opportunity to solve a problem or find a mutual benefit from the change.

In some cases, a quick response to those signals can save the relationship from moving toward lower levels of loyalty or customer attrition.

Spending disproportionately is the only way to be sensitive to the relative value of different channels and programs. It’s the only way to get the most bang for your marketing buck. To learn more about other factors of success in retail customer loyalty, check out our webinar on the topic: Nudges, Influences and Rewards Part 2: Must-know Factors for Success in Retail Customer Loyalty.

Marketers Need to Choose Their Defaults Wisely

By Jeanne Roué-Taylor

There’s a remarkable (and very predictable) fact about the human race that a great marketer accepts as truth: people from all walks of life usually take the default option when offered multiple choices. This fact makes it very important to choose default choices for your customers very intentionally, as it’s essentially one of the best “free” ways to influence customer behavior in your favor.

Consumers Accept Defaults

As an example, retailers have learned over time that the average consumer doesn’t think as much about decisions as you might expect. If you put a decision in front of them, they’ll often simply accept the default option because they are uncertain about their choice.

Applying this idea to something we all know, a common decision offered to a customer is how they prefer to communicate back and forth with a particular brand. Email is typically the default option and also the one chosen, or “accepted,” most often by consumers. This is no accident, and most marketers prefer to communicate by email. While important in retail, this concept is applicable everywhere choices or decisions are offered and responses can be influenced.

Looking Around the Industry

Surprisingly (or not), consumers are even more likely to accept more expensive options when presented as the default. Dell, Apple, and other PC manufacturers know well that customers will upgrade to more expensive options when those options are presented as the default choice on a list of options. Think of the last time you ordered a laptop and how often the larger hard drive was X dollars more and was the default choice. Having a brand-preferred choice already selected is momentum that takes effort by the customer to overcome.

You probably haven’t set up customer choices with this in mind, and should audit the places where choices are offered to see where defaults can be chosen more wisely. The positive results from restructuring default choices can be significant.

To learn more about other factors of success in retail customer loyalty, check out our webinar on the topic: Nudges, Influences and Rewards Part 2: Must-know Factors for Success in Retail Customer Loyalty.

What Marketers Can Learn From the Gaming Industry

By Jeanne Roué-Taylor

Study after study shows that our brains love small, predictable rewards more than occasional, large rewards. This principle is on prominent display in the gaming industry where slot machines far outnumber table games in any casino. Those same slot machines, with small stakes and small rewards, show up in gaming industry financial statements as significantly more successful than large-stakes tables. What makes that possible?

Small, Frequent, and Predictable Rewards

The significant skewing of real estate toward slot machines happens because gaming companies know that frequent, small, predictable rewards with unpredictable timing are precisely what our brains crave. Known as a variable ratio schedule of reinforcements, casinos know that customers respond better to a “…schedule of reinforcement where a response is reinforced after an unpredictable number of responses.” This pattern of expectation creates a high, and very steady, rate of responding and a very successful industry.

This principle is part of the allure of Facebook and other social media sites—once sites have a critical mass of active people providing frequent, yet unpredictable, small bits of content, users feel rewarded for continually checking the site and app. It’s enough to keep people coming back repeatedly, thereby increasing the content in a virtuous cycle. Just as with slot machines, these sites delight consumers when rewards average out every n times, but not always on the predictable nth response.

This “predictable unpredictability” is equally successful in marketing. By continually varying the level or frequency of a promotion or consumer benefit so that it still averages out over time, brands appeal to the consumer brain that loves the small, predictable, yet unpredictable, reward. In an increasingly noisy world, this practice very effectively draws attention and repeat visits to stores, kiosks, and Web and mobile sites. It shows up in the bottom line of companies that understand this just as it does for the gaming industry.

To know more about this and other success factors in customer loyalty marketing, check out our Nudges, Influence and Rewards webinar series.

Marketers, Immerse Yourself in the Data!

By Jeanne Roué-Taylor

“Immerse yourself in the data,” doesn’t mean “Be aware of the data,” or “Follow the reports.” It means “Really immerse yourself in the data,” by digging in and finding something new to learn each and every day. Make it a relentless habit for a very good reason—as the world changes, marketers can no longer wait a month, a week, or even a few days to know the ebb and flow of their business. There’s a new need to monitor what’s happening in all aspects of the business so that even daily results can be forecasted with a high degree of accuracy.

Immerse Yourself

Immersing yourself is the goal, but it has to start somewhere, so start with visualization. There are great tools in the market, including TIBCO’s own Spotfire, that are the best ways to spot trends and to find patterns that can’t be seen in a spreadsheet or report.

The patterns you should be seeking include anomalies that are begging for a cause to be figured out. Only when the cause of a pattern is known can a marketer be practical about taking remedial action now, instead of after a problem presents itself.

Real-Time Modeling

Another key factor is real-time modeling. The traditional approach has been to have a server churning somewhere that reruns customer models periodically, as in weekly or even monthly. A great deal of investment has gone into a Hadoop (or Hadoop-like) approach, but it ends up being too slow to allow marketers to benefit from being truly immersed in their data. It won’t allow a real-time view of what’s happening in the business or for constant learning and correction. A far better approach is have data flow through in-memory, not in a database, and as it arrives. This allows remodeling and re-scoring customers in the moment, which provides the capability to make minute-to-minute changes that affect customer-by-customer interactions.

In a world with so much information moving so quickly, immersing yourself in the data is the only way to stay ahead of the deluge and to pick out the signal from the noise. Even more, the market is moving inexorably toward Fast Data. It’s the compliment to big data and how we describe the in-flight information that helps marketers make better decisions, faster.

To learn more about the success factors of success in retail customer loyalty, check out our webinar on the topic: Nudges, Influences and Rewards Part 2: Must-know Factors for Success in Retail Customer Loyalty.

Do You, Your Boss, and Your Boss’s Boss Agree on Your Metrics for Success?

By Jeanne Roué-Taylor

How you define success determines how you evaluate strategy and ongoing operations. This is such a fundamental point that we make it over and over again. It’s that big. Being crystal clear on what matters ensures everyone is focused on the same objectives. What’s more, the perception of your personal success depends on it.

Aligning Customer Loyalty Marketing Metrics

This comes to life when you consider a basic question: Which is more important, customer visits or customer retention? If you put your faith in visits by defining success through revenue lift over your control group, you’ll work to maximize your campaigns, potentially marketing to the same active customers over and over to keep them active.

On the other hand, if you define success by overall retention, you begin to look at your moderately active customers and ways to reactivate your declining customers. This may have a lower ROI than revenue lift in the near term, but if you’re looking at retention rate and lifetime revenue (and your boss evaluates you on this), you’ll be better off in the long term because you spent money in the right places to achieve the agreed-upon definition of success.

Do you, your boss, and your boss’s boss agree on your metrics for success? You clearly need to.

Getting Customers to Cross the Aisle

As a great example, one of our top retail customers had a well-aligned definition of success that was less about retention or visits, but instead was laser focused on cross-category selling. The company knew from its own experience that its customers had a higher lifetime value if they bought from multiple key categories. The whole approach—from a program structure to the content and engagement points—was designed to drive customers across the aisle to buy from other key categories. Cross-category sales is a tremendously successful success metric for them and has a big impact on the company’s revenue. If the company had agreed, instead, on other ways to measure success, its program would have been perceived as a failure very early on.

Gaining organizational alignment around key metrics isn’t an easy thing, but the benefits can’t be stressed enough. Agreement on what constitutes success will give you the backing to decide where to spend the next dollar of your marketing budget and the means to continue to spend, or shift spending, based on the outcome. An aligned organization is a powerful force.

To know more about factors for success, check out our webinar, Nudges, Influences and Rewards Part 2: Must-know Factors for Success in Retail Customer Loyalty.

Avoid Losing Your Customers—Or Margin—With the Right Marketing Spend

By Jeanne Roué-Taylor

Why do your customers _______ (buy, rent, subscribe, bank, fly, etc.) with you? This is a complicated question because there are many “paths” to the answer, not unlike the directions Google gives from Point A to Point B in a modern city. It depends on each customer’s individual goals and preferences…the rough equivalent of deciding the fastest, most direct, or most scenic route. Without an answer, it becomes a challenge for how much marketing spend to dedicate to maintaining the pull with existing customers.

Marketing Margin Wasting Problem

Untangling this question involves having a framework for understanding how to focus resources and time on marketing based on the customer’s spending levels. Marketing nirvana is about getting it just right by finding the sweet spot and aligning tactics so that a high-spend customer has just the right amount of marketing focus/spend to not be at risk from a competitor, nor at a point of reduced profitability.

Easier said than done.

Optimizing Marketing Spend

While it may not be easy, it is becoming easier than ever before. Optimizing spend involves having a deeper understanding of the customer and what it takes to drive the marketing success metrics that matter most. There are ways to optimize across the customer base that are different for every company, but the process for determining the right levels has become clearer and broadly applicable in recent years. The tools are far better, the visibility into customer behavior across a wider set of interaction points is better, and there’s a much more complete pool of data to optimize against.

There’s more to optimize today than ever before.

The Marketer’s Most Important Job—The Maintain Phase

Finding that optimal point of return changes based on the lifecycle of the customer relationship, which spans from Acquire to Recover, as shown in the diagram on the right. The marketer’s job is to get customers into the Maintain phase as fast as possible and to keep them there as long as possible. The three curves on the diagram are high, medium, and low spend, reflecting that fact that not all customers can spend at the same level over the long term. Marketers need to have best practices for each level of customer spend, recognizing that there are different ways to influence and different levels of return on investment for each.

Marketers need to know their own maintenance patterns. Nudge too much and profitability goes down; nudge too little and frequency and revenue go down. (We’ll focus more on that soon.)

For more on how to use nudges, influences, and rewards to create success in customer marketing, check out our on-demand webinar, Nudges, Influences and Rewards Part 2: Must-know Factors for Success in Retail Customer Loyalty.

You’re Not Helpless to Prevent Churn and Attrition

By Jeanne Roué-Taylor

Churn is not as inevitable as you might think. In fact, churn and attrition are preventable problems that require great focus and a carefully-thought-out strategy. After all, the cost of acquiring new customers in the digital age remains relatively high while the cost of retaining the ones you have, especially the good ones, has become cheaper; it’s a far easier process as well. It’s all about where you put your resources.

Know Your Customer

Preventing churn and attrition starts with knowing which customers have the highest lifetime value. Only when you know where each customer falls can you decide how much retention effort is appropriate. This is where customer loyalty marketing enters the picture as a highly cost-effective, interactive way to decide what resources to commit and where. Customer loyalty marketing takes the guesswork out of who to retain and how to go about it.

And the market matters less than you’d think. Regardless of industry, churn management through customer loyalty marketing is remarkably consistent. It comes down to knowing the risk factors for churn, modeling churn’s dynamics, knowing the cost and benefit, being proactive and timely with intervention, and constantly seeking ways to measure and improve the overall system. If this came down to a series of manual processes, we’d be in trouble. Fortunately, it doesn’t.

Know the Tools and Techniques

Customer loyalty marketing in the digital age is a combination of powerful tools and smart techniques. Analytics is the basis for an attrition propensity index that drives action in the right moments, based on key factors proven to affect churn. That index shifts depending on real-time input from industry-specific factors like time remaining on contract (telecom) to distance from the store (retail). The takeaway is that each factor has a role to play in how an attrition propensity index morphs over time and customer life events.

Lastly, automation of customer loyalty marketing means more than points and plastic cards. Tracking the factors for churn and attrition is the job of a technology platform.

Good Enough Marketing Isn’t Good Enough Anymore

By Jeanne Roué-Taylor

Marketing in the modern digital age has done great damage to the term “good enough.” It wasn’t that long ago when good enough was a quality standard that meant, “This will work well enough and nothing better is needed.” But in times of great change, the term good enough needs to be seriously rethought.

Good Enough Isn’t Good Enough

So what changed? For starters, we’re a decade or so into the challenges of Big Data—also known as the digitization of nearly everything a marketer cares about. Customer information, including their past history, preferences, and even where they are in this moment, are flowing across many different devices and channels. What was good enough to work with the data we used just five years ago is very unlikely to be good enough today.

Secondly, our ability to analyze past behaviors to predict future ones has grown as quickly as the data that feeds those analytics. Once we can know what’s likely, we have a need to do something with that information, meaning we need new ways of interacting, nudging, and influencing our customers digitally, and otherwise. The old execution tools and techniques simply aren’t good enough.

Lastly, the customer has transformed into an always-connected, mobile—and much, much pickier—shopper. The customer has the ability to know and choose like never before. Good enough for the new customer is also a moving target that will certainly be not good enough at a point in the not-too-distant future.

What Can You Do About It?

When good enough is such a moving target, maybe the term itself needs to be tossed out in favor of something that better defines the marketer’s needs. But what, exactly, does the marketer need? Today’s marketer needs to tool up with technology that goes beyond the needs of right now. Choices need to reflect that we don’t know what’s coming, but we can be sure that things will evolve to become more digital, faster, more predictive—and that customers will expect a better experience than we can even imagine right now.

Hear more in the webinar, Nudges, Influence and Rewards: Must-know Factors for Success in Retail Customer Loyalty.