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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.

Understanding Patterns of Customer Engagement

By Jeanne Roué-Taylor

In a recent post, I talked about the customer marketing lifecycle and the marketer’s most important job—getting customers to the Maintain Phase as quickly as possible and keeping them there as long as possible. Achieving that goal requires marketers to know the marketing maintenance patterns for their business and for their particular breed of customers. Getting customers to that place and then keeping them there is all about the nudges, which include both interactions and enticements.

Nudge too much and profitability goes down. Nudge too little and buying frequency and revenue go down.

Patterns of Customer Engagement

Profitability, frequency, and revenue aren’t limited to finding high-spending customers. You can have a very profitable relationship with a customer who doesn’t spend a great deal but stays with you a long time. The takeaway is that customers differ and each industry is unique, from grocery to specialty retailers. Subscription businesses, while less transactional, fall into a pattern as well, though the characteristics of that pattern can be very different.

The key is to know the pattern that works for your business and spend accordingly. 

Finding the Customer Engagement Pattern

Patterns take many forms, but one of the easiest to understand is frequency. Frequency can take on these visual forms:

  • steady state: a very consistent, even pattern
  • sawtooth: they come and go with regularity that creates peaks and valleys, but with predictability
  • episodic: varies more in size and frequency

Each of these patterns is healthy as long as the marketer can see and decide how and when to engage optimally.

These patterns form but they also change over time and require continual analysis. What’s more, first impressions being critical, these patterns are often set early in the relationship as customers pass through the Acquire, Develop, and Grow phases. The past is the best predictor of future patterns, meaning that attention needs to be paid to how patterns form and take shape over time, not just where a customer is during a static moment. Only marketers who understand patterns of customer engagement can dig deeper into the drivers and identify smarter, cost-effective, and pattern-sensitive ways to improve engagement.

To learn more about patterns of customer engagement and other factors for marketing 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.

Are You Focused on Your Desired Customer Behaviors?

When customer loyalty marketing is firing on all cylinders, the effects are indisputable. It is a given that loyalty programs work well, and they work especially well when there is a strong focus on driving specific customer behaviors. Keeping those behaviors front and center can be a challenge, but is a key factor for success in customer loyalty.

Desired Customer Behaviors

Saying that customer behavior is changing rapidly is an understatement. The forces that drive and shape consumer behavior are evolving as rapidly as the technology that allows consumers to shop, compare, and buy anywhere and everywhere. It could be chaotic (and it is for some); but, in the midst of the storm, customer loyalty marketing offers a uniquely valuable way to determine and map desired customer behaviors, and then develop the incentives and frequencies that reinforce them. With so much at stake and so much change, there’s really no alternative.

Spectrum of Desired Customer Behaviors

While revenue (a purchase) is clearly an important desired customer behavior, there are a host of others that can be important, depending on the circumstances of both the brand and the buyer. Desired behaviors can include downloading the mobile app, opting in to mobile notifications, or opening the mobile app when near a retail location. These are just a few examples that set the stage for driving customer behavior in a direction that benefits the brand. Each marketer needs to have a concise list of what makes a difference for their business, and to make sure this is where time and effort is focused. Only by concentrating on the customer behaviors that matter can a marketer move the needle in ways that drive customer loyalty success. Know your desired customer behaviors and put your energy into making them happen.

Learn more in our webinar series: Nudges, Influence and Rewards: Must-Know Factors for Success in Retail Customer Loyalty.

You Still Haven’t Defined Customer Loyalty Success?

By Jeanne Roué-Taylor

Defining customer loyalty success is a critical activity that too often gets overlooked. For those who’ve had the chance to read the post, Why Haven’t You Defined Customer Loyalty Success?, you know that loyalty’s dirty little secret is that even sophisticated programs lack a way to look back and say, “We reached our goals.” This leads to an ongoing problem of both spending money where it shouldn’t be spent and underfunding programs that are actually valuable. With organizational creditability on the line, no marketer can afford to ignore this problem.

Defining Customer Loyalty Success

The good news for those who recognize their need to define success is that there are many levers to pull. Customer loyalty success goes beyond simply spend and likes and is boosted by a host of factors that have creativity as a focus as well as math-driven analytics.

On the outcomes side of the equation, the answers can be as diverse as the methods to get there. Prioritizing goals—whether they’re retention, basket size increase, or some other outcome—is a key part of how success is defined. Goals determine success factors and those factors help us know what to do and how many resources to commit.

Join Our Webinar

In our busy world, without a good definition of customer loyalty success, decisions don’t get made, the right answers are elusive, and the business doesn’t move decisively or fast enough. Effective customer loyalty execution relies on tracking progress toward clear strategic objectives. To learn more about best practices on this very topic, don’t miss Part 2 of the webinar Nudges, Influence and Rewards: 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.

What’s Better Than Loyalty and E-Commerce Seamlessly Integrated?

By Jeanne Roué-Taylor

The enormous movement to real-time customer engagement is enhancing transactional relationships and increasing the lifetime value of customers. Accomplishing this move requires a fair amount of integration of data and systems. Doing the integration all by yourself is hard and unnecessary—especially now that TIBCO Loyalty Lab and Demandware have teamed up to make life much easier for customers.

The Team

TIBCO Loyalty Lab and Demandware provide an easy way for you to:

  • Deliver personalized offers in real time
  • Enroll new members directly within your storefront
  • Segment and target customers by unique attributes
  • Surface transaction and customer profile data to understand customer purchase behaviors and patterns
  • Enable customers to refer friends, access point balances, view reward activity, and much more

Each one of these capabilities is an essential part of turning your customers into fans. The fact that TIBCO Loyalty Lab and Demandware make it seamless and cost-effective is great news.

In this on-demand webinar, TIBCO’s Brooke Pedersen presents the TIBCO Loyalty Lab Link Cartridge for Demandware Commerce. Brooke walks us through how easy it is to launch an omni-channel engagement program directly from within the Demandware e-commerce platform, while saving effort and cost in the process. Watch it and learn how to turn your purely transactional customers into fans of your brand.

INFOGRAPHIC: Top 10 Marketing Trends for 2014

 

 

To learn more about TIBCO’s Top 10 Marketing Trends for 2014, download the whitepaper and watch the webinar.

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Top 10 Marketing Trends for 2014

LoyaltyLab.com

Pursue Omni-Channel, But Think Mobile First

By Jeanne Roué-Taylor

Omni-channel is a popular term and for good reason. The sources for customer, product, inventory, and many other kinds of data data are exploding, leaving marketers playing catch up with the expectations of their tech-savvy customers. Spreading your efforts and resources across all channels, however, isn’t the wisest approach to the data explosion channel. All channels are not created equal nor will they bring the same value. Mobile is the new king of interaction and the marketer’s best friend.

Think Mobile First

For the first time, smartphones outnumber toothbrushes in the world. That may be funny commentary on personal hygiene, but think about this: Sales of mobile phones also outpace births of children.  These numbers provide a wake-up call for where our customers’ priorities really lie. While they may expect a brand to engage wherever and whenever, investing evenly in mobile, customer service tools, points of sale, web, and social media is a mistake. Mobile stands out above all else as the channel to invest in disproportionately, even before all others.

Keep in mind that this explosive growth means the mobile channel for interaction also shows no sign of slowing down. Customers carry, use, and rely upon their smartphones to the extent that any marketer not just connecting, but also engaging, via mobile will be quickly left behind.

No Longer a Convenience

It wasn’t long ago that mobile was a handy alternative to web, but those days are over. Mobile is now the screen of choice for a fast growing number of adults and certainly the primary source of interaction for anyone under 30. If you’re not taking mobile seriously, you’re not taking the customer’s needs seriously.

How can you put mobile first? Ask yourself these three questions:

“Is my content mobile-friendly?”

“Have I integrated mobile with my other marketing channels and data?”

“Am I using location in all the ways that I could?”

Putting mobile first also means taking a step back to consider the wide variety of circumstances for customer interaction that mobile presents. In 2014, mobile first is synonymous with putting customers first, and that deserves outsized focus and resources.