The Precision Marketing Imperative

Tactics for Implementing the Precision Marketing Framework

Written by David Daniels, The Relevancy Group, LLC

Co-Written by David Steinberg and John Polcari, Zeta Interactive

Introduction

Rapid consumer mobile adoption has led to a tectonic shift in how consumers interact with brands, challenging marketers to organize, integrate and household customer data in a new manner. In this new mobile era, it is imperative for brands to adopt Precision Marketing in order to advance message relevancy and marketing performance. Precision Marketing requires marketers to build a Precision CRM (pCRM) centric organization based on customer data management practices that are actionable and rule-based to propel the subscriber across the customer journey to meet predefined engagement and revenue optimization goals.

As brands face challenges such as shifting mobile and email interaction, or consolidating disparate data sets, there are still strategic approaches that can be designed. Largely, marketing organizations can be brought together by solutions that provide an approach to Precision Marketing via pCRM services and tools, including cross-channel attribution measurement capabilities. The key to this includes solving data house-holding and hygiene challenges as they impact a marketer’s ability to deliver relevance with precision. Centralizing data will yield its true power by allowing marketers to understand the value of the customer email address, win higher budgets and gain increased respect and authority within the broader marketing organization.

Precision Marketing has five distinct steps: Integrate, Organize, Enrich, Automate and Measure. These steps address marketing challenges, improve customer engagement and profitability. As marketers evaluate and approach vendors addressing, these components will be critical to long-term success. Partnering with a vendor that is equipped to empower relevancy and engagement is imperative. Vendor evaluations should include the following aspects:

• Flexible integration allowing for access to big data across multiple systems, an organized approach to customer data for heightened relevance and enriched and augmented customer profile data.
• Efficient approach to automation and optimization including reporting and analysis at a pCRM level, specifically allowing for real-time results and attribution.

Embracing the Precision Marketing framework through robust vendors, brands can expect to see higher performance and realize a strong return on marketing investment. Furthermore, marketers that implement at least three of the five of the Precision Marketing techniques deliver 5 to 6 times the revenue and profit compared to those who do not.

This whitepaper presents the data behind today’s current marketing challenges and some considerations in how marketers can use the Precision Marketing Imperative to solve them.

For more information on The Relevancy Group’s services, visit www.therelevancygroup.com, call (877) 972-6886, email info@therelevancygroup.com or on twitter @emaildaniels or @relevancygroup

The Cycle of Precision Marketing

Precision Marketing has five distinct components that are designed to address the challenges of marketers, improve customer engagement and drive top and bottom line results. Below is an overview of the components (see figure 1).

Integrate – Integration is one of the perpetual challenges for marketers, in part because of the aforementioned organizational challenges but mainly because marketers utilize multiple disparate systems. This lack of integration between systems creates undue staffing pressure, as the lack of access to real-time data requires more staffing resources to access and utilize data. It is imperative that marketers work with vendors that can utilize open APIs (Application Programmatic Interface) to access big data and multiple systems.

Organize – Marketers must organize their data and ensure proper data hygiene. Only 16% of marketers state that they practice data hygiene or practice data house-holding to understand multiple customer/accounts within a single household. As the name implies, precision marketing requires a precise approach to managing customer data, specifically ensuring that the data is accurate and organized in a way that it recognizes multiple customer records as one. This type of organization improves the relevancy of mailings.

Enrich – What don’t marketers know about their customers is endless. While marketers have access to an assortment of data, The Relevancy Group finds that only about half of marketers actually utilize data for segmentation for targeting their audience. Data such as demographic, geographic and customer behavior are all necessary make marketing more precise and relevant. Marketers must work with data partners to enrich their customer profiles, with third-party data, particularly with providers that can augment customer profiles with industry-specific data.

Automate – Many of the challenges that marketers encounter are operational in nature. Nearly a quarter (24%) of marketers cite that having adequate staffing resources for marketing programs management is a challenge. Additionally, marketers cite difficulty coordinating campaigns across channels, across brands, as well as managing the frequency of campaigns. In this step of precision marketing, marketers need to identify specific goal- and value-based events to drive revenue and customer worth across a customer journey. Marketers must automate programs to create efficiencies and optimize which customer pathways across channels drive the greatest value. Marketers have a great opportunity to automate and trigger campaigns, as just 18% of marketers state that they utilize such tactics.

Measure – It is imperative that marketers understand and a have an efficient view into the effectiveness of their campaigns and in fact which channels, data sources and customers are driving that value. Measurement is not without its challenges. In fact, 26% of marketers’ state that analyzing campaign results is their top challenge. The Relevancy Group finds that marketers often have only a single channel or siloed view of results or have delayed insight because of the lack of data integration and a decentralized organization. Marketers must work with providers that use a Precision CRM approach to measurement and provide services and tools to assist marketers with attribution. The Relevancy Group finds that vendors that can offer services in a follow-the-sun, 24/7 approach can provide the best insight. This allows the services staff to compile results overnight and have the marketing results for the marketer available the following morning. While real-time measurement is necessary to monitor mailing health, most imperative decisions are not made in real-time and time is a necessary component of building an appropriate omnichannel measurement attribution model.

Figure 1 – An Overview of Precision Marketing, The Precision Marketing Cycle

Source: The Relevancy Group, LLC and Zeta Interactive

Implementing the Precision Marketing Framework

Marketers must adopt the Precision Marketing Framework (see figure 2) in phased steps to ensure that specific goals are met and that organizations are not attempting to take on too many items at once. While some of the below phases can occur concurrently, we advise a phased approach versus one that embraces a “boil the ocean” approach. Accordingly marketers must take these steps:

Integrate – Foundation for Precision

1. Ensure Data is Actionable – Just 38% of marketers’ state that they maintain a centralized repository for their client data, signaling that data is obscured by and scattered within multiple data silos. This requires that marketers seek solutions where data integration is central to the vendor’s offering. Those who are capturing data are putting it to good use where they can. Thirty-five percent of enterprise marketers are using click stream analysis to target emails based on the web browsing behavior of their customers. Thirty-six percent of enterprise marketers are using dynamic content in their email campaigns tied to data insights. Before marketers can begin to advance their precision and relevancy, it is imperative to organize data through integration.
2. Utilize the latest Open APIs to Access Big Data – Marketers must work with vendors that provide application specific APIs, as well as utilize the latest Open JSON, restful APIs to access the disparate data sources that they use. Marketers must also ensure that they can utilize new types of “big data” including location, Device Id and unstructured customer sentiment including product reviews, as well as third-party data that serve to extend and deepen the knowledge of prospects and customers. Select vendors that have not only a well-documented API, but proven tools to integrate not just data but the processes and access to programs across the enterprise, such as field sales and service representatives.
3. Establish an Omnichannel CRM Data Schema – While marketers must work not with vendors that dictate a specific data schema, marketers must begin to develop their own schema that allows for data across all channels. Precision Marketing requires a pCRM data schema, which is an Omnichannel Customer Relationship Management data schema that addresses the customer or prospect in their journey across channels. The digital marketer must be able integrate data into a schema that they define to reap the rewards of intelligence across channels, but specifically, email, social channels, website, display, POS (point of Sale) and offline direct mail response data. Marketers must have the flexibility to integrate data from a variety of sources, but also organize the data in a way that is valuable to all business stakeholders.

Organize – Making Data Precise

1. Data Readiness – While integration provides the groundwork necessary to ensure that there is a proven framework to access disparate data, often marketers are email-centric. The Relevancy Group survey finds that 36% of marketers utilize their email address as their unique customer identifier. This works well when only conducting email marketing, yet in this omnichannel world marketers should link that email address to Social IDs, Device IDs, cookie management, physical address and potentially phone numbers to recognize today’s consumer holistically. Precision marketing requires flexibility and marketers must seek vendors that allow for an agile approach to add new columns to data and link various unique customer identifiers.
2. House-Holding – Two-thirds of consumers (66%) report that they have multiple email addresses, further shadowing the true identity of the consumer. Thirty-five percent of consumers have a separate address that they use simply to subscribe to email marketing messages, underscoring the need for marketers to adopt a house-holding remedy to recognize the subscriber holistically across channels. Whether the marketer is house-holding simply email addresses to recognize multiple email addresses as one account, or in the true meaning of house-holding in a direct marketing sense, to realize the subscriber in an omnichannel sense as one household. Marketers must work with vendors approach a customer’s household identity across channels, as this is a necessary piece to add precision to targeting and truly understand a customer’s value.
3. Data Hygiene – Just 16% of marketers report to The Relevancy Group that they practice data hygiene and de-duplication processes for data management, highlighting the massive imperfection and disarray that is present for most marketers. No wonder consumers are annoyed with high frequency and the lack of relevancy in marketing messages they receive. Precision marketing implies that marketers are, in fact, precise. This precision can only be achieved if marketers are working with vendors that have remedies and practices for data hygiene. Marketers must utilize solutions at the time of email capture to dismiss non-valid email registrations. Beyond this, marketers must work with vendors that offer cleansing services to recognize the email address is accurate and valid, which will improve delivery and subscriber engagement. This also entails tactics such as win-back campaigns to reactivate subscribers that appear to be dominant.

Enrich – Insight to Drive Precision

1. Explore Data Partners – When marketers become too isolated in their own data, they only know the precision of their misaligned data. We recommend that marketers work with providers that can provide data, from demographics to psychographics that allow the marketer to embellish the knowledge that they have about their customers and prospects. This is vital for marketers in highly competitive and commoditized industries including: travel, entertainment and retail. History has proven that marketers can achieve success by using additional data for targeting. Marketers that work with ESPs and digital marketing providers that offer data to augment customer profiles simply the process by removing the integration step.
2. Know the Unknown –Utilizing services and technology to convert unknown prospects to known subscribers is the bedrock of direct digital marketing. Every marketer needs to continue to grow their audience and specific industries such as paper publishers need to do it a higher rate than other industries making it an imperative tactic for all marketers. While there are many tactics and approaches to tying unknown site behavior to known subscribers, marketers must work with vendors that have a history of and a solution for tying together the unknown tapestry to addressable consumers.
3. Convert Prospects to Customers – Marketers must become precise in addressing prospects versus known prospects in a meaningful way, which may include showing them the same ad creative in banners, email and even offline mailings. Work with vendors that can tie this process together across channels, which can connect them to a known customer. Marketers must be precise and leverage automation to ease prospects into an onboarding program. Imagine if you were a new client walking into a local retail store, versus someone that is a regular of that store, the shop owner would have different conversations with the new client and the regular. Precision Marketing requires marketers to take the same approach to prospects versus customers, in an automated fashion that aligns marketing programs to stated value-driven goals.

Automate – Goal Driven Programs

1. Align Goals: People to Processes – Precision Marketing requires that marketers begin with the end in mind. That is, automation must be goal driven and they should be value and engagement driven. Precision Marketing requires marketers to set-up lifecycle customer journeys with iterative steps and cross-channel multiple paths for each customer. These paths must be tested to realize the most profitable path for the marketer.
2. Automate Customer Journeys –An intelligent drawing of a reader through a series of messages in parallel to the sales funnel process is superior to pounding them over the head with calls to action. In fact, according to a new study by Adaptly, applying this kind of intelligence will increase conversions by more than 50%. Marketers remain anemic to testing, according to The Relevancy Group research. We found that just 28% of marketers report that they conduct A/B Testing for email marketing. Why? Because testing implies rework and is difficult. We recommend that marketers build goal-driven customer journeys in which automated testing is embedded into the journey. We know that those marketers that test and take time to layout this approach are more successful than those that do not.
3. Automate Campaigns – Even if the marketer is unable to automate campaigns across the customer journey it is important for every email marketer to utilize triggers and make the most of transactional messages. Today, the majority of marketers automate less than 20% of their email messaging volume, which presents a huge opportunity to automate everything that is event or behavioral driven. We find that marketers that automate their mailings are more successful than those that do not. Also they typically have lower overhead as they set-up the campaign once and then simply optimizing the campaign based upon its performance over time.

Measure – Optimize Precision

1. Holistic Dashboard – Precision Marketing requires silo stakeholders to have their own view of the measures that matter most to them. This requirement is widespread across the industry, and marketers must seek solutions that allow users to have their own customized dashboard for sign-in. Additionally this must be fueled by a model of multichannel attribution which allows these specific business owners to see their revenue contribution in the scope of meeting specific customer journey goals.
2. Multichannel Attribution – Marketers must work with a vendor that offers attribution services and has the history of working with cross channel marketing clients. In addition to these important multichannel measures, marketers should seek solutions that offer some element of competitive intelligence which may also aide in multichannel competitive awareness. Such items are critical to perfect and optimize marketing programs across channels. We suggest working with vendors that have a service- and product-driven solution to assist in remedying measurement attribution.
3. Measure Client Value – Just 30% of marketers know the value of their email subscribers or the value of their email address. Moreover The Relevancy Group finds that only 28% measure customer lifecycle value. This last step of the Precision Marketing Framework dictates and requires marketers to go back to data integration and organization to ensure that these new measures of customer value are accurate. Here we suggest that you work with vendors that provide guidance for value calculators or those that leverage the goal-driven customer journey. This is the value of Precision Marketing.

Figure 2 – The Precision Marketing Framework

Source: The Relevancy Group, LLC and Zeta Interactive

Marketers That Embrace Precision Marketing Techniques Deliver 5 to 6 Times the Revenue and Profits Than Those That Do Not

When The Relevancy Group compared marketers that were utilizing techniques described in the Precision Marketing Cycle and Framework – namely, data hygiene, house-holding, centralized data, segmentation, targeting, automation, dynamic content and holistic measurement across channels performed much better than those that do not. We found that marketers utilizing at least three of these Precision Marketing tactics empower relevancy and engagement delivered five to six the amount of revenue and profit on a monthly basis. Here we compared their actual performance metrics from these two groups and normalized for the purpose of comparison their monthly email volume (2.9 million message a month) and a common average order value (AOV) of $98.00 (figure 3). Here we find a tremendous difference. Those that utilize Precision Marketing and work with vendors that are equipped to deliver these techniques, produce a massive return on the marketing dollar. When we look at the data in a variety of ways, we continue to find that those that embrace precision marketing techniques deliver 5 to 6 times the monthly revenue and profit compared to those that do not.

Figure 3 – Marketers That Embrace Precision Marketing Techniques Deliver Five to Six Times The Revenue and Profit Compared To Those That Do Not

Source: The Relevancy Group, LLC/Executive Marketer Survey n=374 11/13, US Only, Mid-Market & Enterprise Respondents Assumes 2.9 million messages a month, $98 dollar AOV, performance metrics as reported from survey respondents, those that perform precision marketing versus those that do not

Supplemental Research into Today’s Marketing Challenges

Age Patterns of Internet Access Highlight a Tectonic Shift Towards Mobile Access

Most part consumers have largely abandoned the desktop computer as their primary way to access and utilize the Internet (with the exception of those 61 years and older). Overall, 11% of consumers state that they use their mobile phone, 14% their tablet and 42% their laptop computer as the primary device to access the Internet. There are distinct differences in behavior by age. For example nearly a quarter of 27-to-32 year olds state their mobile phone is their primary Internet access device, an equal number of 33-to-38 year olds report the same thing for their tablets (See figure 4 – Primary Internet Access Device by Age – 2014). These access behavior patterns have customer experience and site design implications that marketers must be ready to address.

Figure 4 – Primary Internet Access Device by Age – 2014

Question Asked: What is the primary way that you use the Internet and visit web-sites? (select one) Source: The Relevancy Group, LLC 2014 Consumer Survey n=1,011 3/14, US Only

Mobile Email Adoption is Mainstream Across Nearly Every Age Group

Consumers across nearly every age group are using their mobile devices to read and interact with their email (see figure 5). Overall 73% of consumers utilize their mobile phone to access one or more email account, making it crucial for marketers to utilize responsive design and other liquid layout schemes and ensure that email messages and websites render properly on mobile phones. Thirty-two percent of consumers state that email marketing messages are too small to read and interact with on mobile and 26% report that websites are not formatted for their mobile phones. Forty-two percent of consumers report that they use their mobile phone to triage their email inbox, quickly deleting messages or marking them as unread in order to re-read them later on their computer. Nearly a third (31%) state that they use their mobile phone as their primary email device, this behavior is highest among 27-to-38 year olds, where 36% state their mobile phone is their primary email device. Consumers are engaged with their phones for utilizing email; and while many still utilize their webmail or computer email inboxes, 14% of consumers state they forward messages to themselves or to another email account to read later.

Figure 5 – Consumer Mobile Email Adoption by Age – 2014

Question Asked: Do you currently access one or more of your personal email accounts on a mobile device such as a cell phone, smart phone? (select one) Source: The Relevancy Group, LLC 2014 Consumer Survey n=1,011 3/14, US Only

Consumers Are Swayed by Relevancy and Message Frequency

Marketers have only seconds to capture the consumers’ attention, create a seducible moment and earn a conversion. Forty-two percent of consumers utilize their mobile phone to triage their inbox, quickly deleting or marking the message as unread (see figure 6). Far fewer consumers, 14%, forward the message to themselves or another email account to be read later. However, we continue to assume that consumers have the same behaviors on their mobile devices as they do on their desktop computers when it concerns email marketing. When asked what they don’t like about getting email messages on their mobile phone, the surveyed consumers responded:

Forty-four percent stated frequency. They are sent messages too often, I get too many messages (see figure 4).

Many are sensitive to relevancy. Thirty-seven percent stated that marketing messages are not relevant to them.

Rendering hinders engagement. Nearly a third (32%) stated that the messages are too small to read and interact with and a quarter (26%) stated that when they click-through their website is illegible on their mobile device.

Marketers must focus on frequency, relevancy and rendering to capture a consumer’s attention and engagement. These are significant elements of precision marketing and are required for the marketer to further drive subscriber engagement and conversion.

Figure 6 – Consumer Mobile Phone Email Interaction Behaviors – 2014

Question Asked: How do you use your mobile phone to interact with email messages? (select all) Source: The Relevancy Group, LLC 2014 Consumer Survey n=1011 3/14, US Only

Figure 7 – Consumer Reported Challenges to Email Marketing on Mobile Phones

Question Asked: What don’t you like about getting email marketing messages on your mobile phone? (select all) Source: The Relevancy Group, LLC 2014 Consumer Survey n=1011 3/14, US Only

Marketing Organizations Are Siloed Creating Issues With Data Integration and Measurement Attribution

Marketing organizations are largely siloed by channel and function. Forty-five percent of executives state that their marketing department shares common goals, signaling potential multichannel branding discrepancies, as well as messaging governance and measurement challenges (figure 8). In fact, just 32% of marketers state that they manage customer contact frequency to ensure that customers get a limited or optimal set of messages across all channels. This is driven by the equal number of respondents that state that there is central ownership of marketing programs across channels, with just 17% reporting that they practice marketing response attribution across channels. Such organizational alignment elements not only change the efficiency and effectiveness of marketing programs, but also slow the rate at which marketers will purchase precision marketing solutions from a single vendor. ESPs, particularly those with multichannel platform aspirations, must be aware that budgets and purchasing responsibilities are still siloed, slowing the adoption of these single-suite solutions. Based on previous surveys on this topic by The Relevancy Group, we expect these organizational challenges to persist for the next 24 months. Centralizing marketing and accomplishing organizational change is not a trivial issue and accordingly, marketers will likely operate in a channel-centric manner, despite their underlying multichannel aspirations. Often marketing organizations can be brought together by solutions that provide cross channel attribution measurement capabilities.

Figure 8 – Marketing Department Organizational Structure

Question Asked: From the following list, please select the statement or statements that best represent how your marketing organization operates? Source: The Relevancy Group, LLC/Executive Marketer Survey n=374 11/13, US Only, Mid-Market & Enterprise Respondents

Data Management Challenges Impede Marketer Sophistication

Data remains decentralized – Marketers remain challenged to integrate and access their customer data across disparate sources for both operational targeting remedies and most importantly analysis. To answer the question, “Why isn’t data better leveraged in many email marketing campaigns,” one needs to look no further than the customer data management issues that organizations face. Data house-holding and hygiene challenges are prevalent. Marketers feel these issues impacting their ability to deliver relevance with precision. Less than four out of every ten marketers surveyed indicated that their companies had a centralized data repository for all customer data (figure 9). One in five maintain more than one customer database each for a specific channel. Even more importantly, there is a decided lack of understanding as to the real value of the data that many marketers could potentially leverage and exploit. Only 28% of marketers in our survey measure lifetime customer value and only 30% have determined the value of a customer email address. This information exists, but it doesn’t present itself; it must be determined. The value of the customer email address is the currency for email marketers to win higher budgets and increased respect within the broader marketing organization. Precision Marketing requires targeting to be based upon customer value and the notion of the “best” customer based upon other value-driven metrics such as engagement and advocacy. Solutions that assist email marketers in understanding this value will ultimately result in greater investment in the overall email marketing program.

Figure 9 – Email Marketer Utilization of Customer Data

Question Asked: Please select the statement or statements that best describe how you manage your customer data? Source: The Relevancy Group, LLC/Executive Marketer Survey n=374 11/13, US Only, Mid-Market & Enterprise Respondents

Conclusion:

Consumers today expect Precision Marketing. Marketers who understand customer behaviors and preferences and who organize their people, processes and platform will be rewarded with greater customer lifetime value.