Marketing Challenges and Opportunities

The digital age continues to shift the relationship between brands and their customers. Despite the potential of today’s targeting methods and communication channels, marketers find themselves challenged to maintain margins and content relevancy among a hard-bargaining, informed, and alwaysconnected public. Harnessing social media to gain new insights and deliver better experiences is now a necessity.

Thanks partly to the rise of social networks, more information about consumer preferences, motivations, and behaviors is available to brands than ever before – Facebook alone has over 100 petabytes of it, estimated by the MIT Technology Review to be “the most exhaustive data set ever assembled on human social behavior.” Facebook’s influence on buying decisions has doubled in the past year. Over 2.7 billion “Likes” and one million new Twitter accounts are generated each day.3 Brands must embrace this reality and adopt a social-empowered engagement strategy to increase marketing efficiency and drive return on investment.

Marketers who consistently win in today’s economy are no longer focused only on crafting the catchiest slogan and chasing media with the highest ratings, but rather on understanding exactly who their customer is, sensing when their customer is about to engage, and presenting exceptionally relevant and compelling offers. It’s about gathering insights and plugging them into multichannel marketing campaigns that encompass owned, paid, and earned advertising channels.

Leading marketers place social media as one of many sources of customer intelligence that combine with offline, purchase, and behavioral data to inform better audience selection and a coordinated campaign strategy across all channels.

Companies Start to Pull it Together

Today’s enterprise has already adopted a number of software tools to assist it in managing and harnessing the social web. These typically take the form of:

• Social Listening to identify marketplace trends and sentiment
• Social Publishing to disseminate and track content via an ever-growing number of social accounts across networks
• Social Customer Service to identify and respond to individual customer complaints expressed online
• Social Advertising applications to place and target paid ads on social sites
• Social Plugins including share, like, tweet and follow buttons, gaming elements, and reviews
• Social Login to allow consumers to leverage social accounts on third-party websites and applications

Companies have typically implemented these applications on an ad hoc basis as their social needs have evolved. Like many digital initiatives, social has grown up in isolation, where teams are free to experiment and invest without the rigidity of process and financial scrutiny typically imposed on more established marketing functions. However, there is plenty of evidence pointing to change. In a recent Chief Marketer survey, marketers listed their greatest frustration with social media as the difficulty in calculating ROI.

And as the social customer care manager for a leading automobile manufacturer recently stated, “This is the first job I’ve ever had where I don’t have to prove the ROI of what I’m doing. But I know that won’t last forever.” Just as email marketing and eCommerce have integrated into enterprise marketing structures in recent years, signs of impending integration of social content management, data, and analytics into the marketing and IT organization are starting to appear, forcing marketers to rethink the processes and tools they currently use in order to achieve the overall vision of the social enterprise (many of which were not built with enterprise-class features such as security and governance controls and points for customization and integration). Forrester Research recently noted, “Savvy marketers will demand social measurement tools that demonstrate how their social programs are creating marketing and business success.” Rather than today’s social listening vendors, the report predicted that “those tools are likely to come from vendors with expertise in tying marketing spend directly to business outcomes."

This attempt to integrate social into the enterprise has coined the imprecise field of Social CRM. While some include internal collaboration tools in this category, a more focused definition is presented by Forrester as “connecting social media to the customer database and informing customer strategy through this information.” Forrester goes on to say this focus makes Social CRM “the customer intelligence professional’s mandate.”6 Gartner has clarified this particular function under the moniker “Social for Marketing.”

Organisational Challenges

Customer intelligence and CRM professionals, especially those with a direct marketing background, know segmentation well. However, they typically aren’t well aligned with their digital marketing counterparts. Though they know that social media will impact their job, they often don’t yet understand how and may struggle to find their footing in a converging digital world.

Conversely, digital marketers understand social media as a promotional channel and perhaps are assembling some aggregated insight from it, but they don’t truly grasp it as a data source or fully leverage its use in targeted campaigning. For many digital marketers, “targeting” and “segmentation” are terms related to personalizing content for anonymous site visitors. Digital marketers could learn

something from their direct marketing counterparts in the way of building a comprehensive customer view, targeting at an individual level, and evaluating multi-channel response attribution.

Due to these organizational challenges , delivering on the Social CRM vision has proven easier said than done – and especially so in large-scale B2C marketing. Marketers have also encountered technical challenges, discovering that access to their social data in the cloud can be limited, and the integration of the data is particularly difficult without non-social personal identifiers. This requires marketers to make some important realizations and adopt a methodical approach to their social marketing program.

Social Marketing Has a Role in Data Driven Marketing

Data driven marketing works in a digital and social world. Socially-enabled marketing doesn’t require reinventing direct-to-consumer marketing tactics from the ground up. It’s still about creating an insightful view of the customer, using analytics to understand behaviors and predictive indicators, segmenting messages intelligently, and delivering relevant content. Social is a rich – albeit unique – data source that provides additional context and accuracy to customer-centric marketing programs.

Social engagement drives social insight. Just having a Facebook page or Twitter handle doesn’t necessarily cut it. Social CRM is accelerated by permissionbased social data. Brands need to establish deeper relationships with consumers to gain that permission. Consumers expect value in exchange for sharing their data with brands. This requires making the experience with your brand a social one. Once permission has been granted, brands must extract data via the social network’s API and process it into a usable and standardized format.

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Social data in and of itself is interesting; social data integrated into a cross-channel, customer-centric approach is impactful.

Social data is part of a customer-centric strategy that yields better multichannel targeting and cadence. Brands shouldn’t relegate “social” into yet another data silo but rather integrate with other owned and partner data sources for a more comprehensive customer view. There is some value in looking at purely social data (i.e., social listening platforms give marketers a view into what people are saying about them in the social web), but in order to drive true return on investment, social data must be part of a broader customer-centric framework encompassing data management, analytics, and engagement. By integrating social and purchase information, marketers can begin to understand the impact their social engagement strategy has on sales and communicate with customers in a way that drives future sales. Measurement is important across all touch points. What is the lift on socially-enabled email communications? How much do people who “Like” my page spend in my stores? Social data integration answers these questions and enables social insights to be applied to outbound targeted campaigns. Without integration of social insights into a centralized marketing database that informs relevant communication programs, you can’t apply the insight generated through social analytics.

Understanding Social Data

A fundamental part of delivering on the vision of Social CRM is an understanding social data. Typical “big data problems” around variety, volume, and velocity plague companies wresting with social data management. While there is much potential in its analysis and application, additional unique challenges around access to customer data, new data types related to behaviors and connections, changing social network governance and API design, and identifying a key that can be used to link social and other customer data sources have limited marketers’ ability to succeed. In fact, only 10% of organizations even have an enterprise definition of social for CRM.

A framework characterizing data by its potential use, availability, and data type helps to untangle the social data bird’s nest and lays the groundwork for social data management.

Data Quality

Critics of social marketing often reference its data quality perceptions. No data source is perfect, and all must be evaluated relative to their strengths and weaknesses. Third-party data aggregators typically imply preferences or attributes based on non-related or aggregate source data, limiting the accuracy of the elements they produce. And form-based data provided by customers in surveys is the lowest quality data source according to Experian. In fact, 88% of consumers readily admit to falsifying or omitting information when completing forms online. In contrast, consumers completing a social profile (especially those who leverage that profile as their online identity on other sites) do so for their own benefit, increasing the likelihood of genuine representation. While in the early “wild west” days of the Internet, individuals were known by anonymous handles and largely maintained obscurity, the rise of eCommerce, online dating, and social networking – along with a greater comfort level online – has increased consumers’ willingness to represent their true identity, despite the privacy implications. 87% of social network users now share their real names, and 77% readily share brand preferences. Facebook has championed this trend, as evidenced by a recent initiative to proactively disable 83 million accounts that were found to represent false or misclassified identities. According to Facebook’s Chief Security Officer, Joe Sullivan, the network’s “entire platform is based on people using their real identities.” As with all data sources, a rigorous master data management and data quality process can help ensure decisions are made on the best data available.

Putting the Data to Use

Analytics

The logical first step to extracting value from integrated social data is exploring it for analytical insight.

For example, once social preferences such as Facebook Likes or Twitter Follows are available in the marketing database, a company can answer questions such as:

• Which products or competitors are most socially preferred by the segments in a company’s customer base?
• What effect does Liking a Facebook page have on in-store spend?
• What common social affinities represent potential cross-sell opportunities?
• Does the company’s media advertising plan compare with the media brands for which its customers express social preference?

This information enables marketers to make informed decisions regarding marketing mix, offer design, and campaign makeup. In addition, more advanced analytics make use of big data technologies and the unique behavioral and connection data generated by social networks. These analytics can take the form of:

• Attribution of online and in-store revenue to social media alongside other marketing activities
• Exploration of the network graph for “hidden communities” of interconnected customers with similar buying patterns
• Scoring for influencers and influenced customers that includes business factors like referral revenue in addition to traditional influencer metrics like number of connections and frequency of social activity

Campaign Targeting

In addition to aggregated metrics and analytics, social data provides a rich opportunity to ensure marketing campaigns are relevant and well-targeted. Posts and comments can be analyzed for campaign timing around purchase intent, and attributes and preferences can be used to target specific messages. For example, the NFL leverages social data generated by social login (powered by Gigya technology) to deliver personalized email messages. Gigya’s CEO, Patrick Salyer, explained the process to Destination CRM: “When someone logs into Facebook [and has granted permissions], they can tell who that user’s favorite team is and when their birthdate is. Before their birthday, those customers will receive an email that shows the jersey from their favorite team with their name on the back, with an email saying something like, ‘Hey come treat yourself for your birthday and buy this Redskins jersey.’ You get a more customized shopping experience that’s going to convert much higher than say, [if a Redskins fan] gets a Raiders jersey.” 14 Early adopters are starting to reap the benefits of these enhanced campaigns. When Samsung started personalizing email campaigns with data collected as part of a social login to their website, they found those recipients were 34% more likely to open the email and 63% more likely to click on a link.

In addition to elements crafted with social insights, other integrated sources can – and should – be leveraged to truly optimize the message. An individual’s lifetime value, past response to discount or high value offers, availability of inventory, and coordination with other channels come together to produce an excellent customer experience and optimized business results.

Personalised Interactions

While outbound marketing messages will continue to drive brand response for the foreseeable future, consumers are increasingly in control of the interactions that lead to sales. This requires marketers to provide relevancy in real-time on the web and on mobile devices. Gartner estimates these customer-initiated, relationship-driven interactions can drive up to ten times the response rate as a marketing-initiated outbound message. Leveraging Teradata technology, Travelocity personalizes customercentric home page offers with 7x more click-throughs and 4-5x more bookings than generic content. In order to reach these levels of success, brands should leverage social data along with other customer data sources to determine the optimal content and offers to present in that moment of truth.

Companies are already integrating their owned web properties with the social web, through the use of Share, Like, and Tweet buttons and social login. A 2011 benchmarking study found 16 of the top 20 sociallyengaging apparel retailers had Facebook/website integration.Social login in particular is important for its ability to capture consumer opt-in to sharing of social data that can then be used to personalize the online experience. Online retailers such as Sears, Wal-Mart, and Smashbox by Estee Lauder have created social shopping experiences that connect consumers to products that their friends and peers endorse or simplify gift-giving by presenting recommended gifts for friends based on their social activity. One such retailer gained 47% more spend per customer from those who opted in to this social shopping experience, and according to a recent Direct Marketing Association study, 88% of marketers using social data for web personalization claim it has a high impact on their marketing returns and customer engagement. Consumers value this personalized experience, with over half viewing it attractively and 46% saying it makes them more likely to purchase from the site.

Leading marketers not only incorporate social data into social experiences, but leverage it to drive content decisions across offers, product recommendations, and on-site promotions as well. Take an example of a financial services company that displays featured content on their website in a sidebar. Instead of presenting a generic offer to all visitors, it could take into account the various data points about a specific visitor, including:

• She is a 30-year-old female
• She has an IRA account with the company
• She Liked Baby Gap on Facebook
• She is currently browsing 529 plans

This information could be used to determine that the promotion for an upcoming educational webcast on “Your Child’s Financial Future” is the optimal content to present at that time, based on the comprehensive portrait of that customer.

Steps to Get Started

1. Use social login and apps to gain permission and access to social data.

The most rich and useful social data starts with gaining consumer opt-in to its access. Offering social login as a registration option on your website is the most common and effective way to start collecting this permission, with typical adoption of 30-40% among registering users. Be sure to collect an email address or associate a customer ID to enable the integration of this data with other insight sources. In addition, consumer-facing applications that reside on or integrate with social networks can gain the opt-in needed.

2. Capture social data in a format that can be analyzed.

Requesting individual data elements from a social network API is appropriate for certain applications, but to enable integration of this data and to leverage it across communication channels, pull it into a database where it can be combined with other sources, mined for key discoveries, and used for in-the-moment decisions.

3. Don’t stick social in a silo – it is one important facet in a multi-sourced, multi-channel approach.

It is time to let social graduate from its infancy and integrate it into enterprise business processes and marketing systems. Tie data to purchases to analyze campaign return on investment or to marketing performance data to analyze its impact on response rates. Align social campaign schedules with other direct, digital, and advertising plans to deliver a consistent message to customers and prospects.

4. Explore your social data to discover brand affinity, product preferences, and buying indicators. Then incorporate it into your existing cross-sell and upsell campaigns or design new campaigns with this insight in mind.

Social data lends itself to traditional data mining techniques like clustering as well as emerging practices such as network analysis, text analytics, and influencer modeling. Upon uncovering an insight, incorporate the finding into your existing cross-sell and upsell campaigns to quickly increase targeting accuracy and ROI. Then test, measure, and refine continuously to improve marketing results. Finally, use the insight to develop innovative new communication strategies that deliver a world-class customer experience.

Instead of relying on derived or implied consumer preferences, marketers can now pick up the bread crumbs of self-declared interests in the social space. In a new customer-focused culture, it is crucial for marketers to cater to consumer needs. Customer-centric strategy includes investing in the people, tools, and processes needed to develop proprietary data sources (including social) as competitive assets that can be combined to inform audience selection, marketing optimization, and product development. Marketers now have the tools to make it happen and can deliver a customer experience that will keep their customers coming back for more.

About Teradata

Teradata Corporation (NYSE: TDC), is the world’s leading analytic data solutions company, focused on integrated data warehousing, big data analytics, and business applications. Teradata’s innovative products and services deliver data integration and business insight to empower organizations to make the best decisions possible and achieve competitive advantage. Teradata acquired Aprimo, now Teradata Applications, in January 2011. For more information, visit www.Teradata.com.