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2012 is now well underway, and many businesses are now getting to the sharp end of some serious planning ready for the new financial year to come. One fundamental change I saw in client activity during 2011 stood out in particular and thoughts turned to how this could translate into the year ahead for many others.

So what was this change? In effect it was helping shift a client’s activity from pure segment marketing to segment value marketing or, put another way, the progression from simply acquiring customers to acquiring those who will add most value over the life time of the relationship. That simple word of ‘value’ is often missing from most marketing activities. All too often marketers are asked to acquire a set number of customers, or indeed retain a set percentage and most are pretty good at using segmentation to get there.

However, it is extremely rare to find a business that is acquiring or retaining customers based on their long term value. Why? Well, sometimes it is just too hard to figure out, or it’s just not in the target job description.

To explain why this simple value piece is so important, here are two examples of several changes to client activity in 2011. Firstly, an insurance company that spent its waking hours trying to attract new customers that were both a safe risk and financially well off. Experian’s analytical team conducted extensive work on developing life time value metrics for all customers, showing that in fact the segment they were ignoring the most was indeed the most valuable.

A similar story was found within a Financial Services company seeking out the cream of the crop for investment services. Again, Experian analysis showed those slightly down the wealth order to be better long term value clients, owing to much greater future retention.

In both cases these businesses were already marketing to segments, but by simply adding the missing value dimension they have now radically changed their target marketing. At a time when budgets were decreasing they knew that it was critical to spend every pound in the most value creating way. As such, they now have a clear vision as to who to acquire, exactly what profit to expect from that acquisition and, of course, retention activities prioritised to maximising value, not just keeping customers on file.

So if you’ve not considered a New Year’s business resolution for 2012, it isn’t too late. Why not spend some time getting to fully understand each segment’s life time value, or let Experian help? Not only do I wager that activity will change, but also the value you bring to your business.

Clive Gosling is Head of Consulting with Experian's Marketing Services division and brings both the real world practicalities of day to day business and the in depth customer intelligence Experian can provide to a seamless business solution that is both achievable and profitable.

This article will discuss how brands can leverage existing segmentation as part of their online acquisition strategies providing 5 key recommendations for putting segmentation at the heart of online acquisition. First though it’s worth explaining why existing segmentation isn’t used in online acquisition strategies.

For years now brands have bought into the idea of segmenting their customers so that they can personalise offers and increase profitability. This then informs the acquisition strategy which is then developed around acquiring those most profitable segments. Seems obvious enough but in a significant number of instances brands are not using this segmentation as part of their online acquisition strategies.

There are two main reasons the first being that in the majority of cases segmentation sits at the heart of the brand in the customer database. As online marketing has matured many of the tools used to implement and optimise online acquisition campaigns have not had links into the customer database and as a result there has been no easy way of using the existing segmentation in online acquisition campaigns.

Secondly there are often internal barriers for brands to overcome. This is often down to how internal team structures have involved. It’s common practice to see a brand’s offline marketing team and insight and analytics teams working side by side but often the online marketing team does not have the same level of interaction. Possibly this lack of interaction is down to the fact that as already discussed there is often no link between the tools used to implement and optimise online acquisition activities and the customer database.

The good news for brands though is that now a simple API can link the database with online acquisition tools. Data can now be imported into the customer database much more easily and as a result my five recommendations should be relatively straight forward to implement. In putting these recommendations together I’ve linked four of them to the four main online acquisition channels, search, affiliates, email and display. The other recommendation sets out to address one of the main reasons existing segmentation isn’t being used online.

Here are my five recommendations to leverage existing segmentation online: 

1. Review team structures and make sure the online, offline and analytics teams are working more closely together. This should ensure campaigns are ‘joined’ up and that existing segmentation is used across both online and offline.
2. Build existing segmentation into keyword optimisation strategies. If you use a bid management tool ensure an API links it with the customer database. Keywords should be optimised depending on which segments they are driving.
3. Display activity should be deployed on sites with a profile that matches your most profitable segments. Online intelligence tools can be used to profile the demographics of proposed sites for advertising and this can be matched to the brands existing segments.
4. Affiliates should be rewarded with commission that reflects the customer segment that the brand is acquiring from them. A higher commission for a customer in a profitable segment and a lower commission for a customer in a less profitable segment.
5. Acquisition email addresses should be profiled against your most profitable segments This should improve campaign ROI.

Of my 5 recommendations, recommendation 1 is the one that will deliver long term success and ensure that the brand is set up better to understand multichannel and cross channel challenges and opportunities and gain competitive advantage.

Clive Gosling is Head of Consulting with Experian's Marketing Services division and brings both the real world practicalities of day to day business and the in depth customer intelligence Experian can provide to a seamless business solution that is both achievable and profitable.

Make sure your segmentation is actionable.

Having worked in the customer insight world for much longer than I care to remember I am still amazed by a recurring and underlying issue when it comes to planning market segmentation projects.

My first encounter was 15 years ago when I inherited a historical segmentation project as I started as Customer Insight Manger for a leading building society. I entered just as the organisation was ripping up and starting again - the main reason was despite all the research there was no way to understand which customers fitted into which segment so the insight remained just that – a bit of research.  We chose instead to adopt a simple geo-demographic framework on which to understand prospects and customers. The revised approach was embedded into marketing strategy planning and targeting and things started to move forward.  At the time I’d assumed this was an isolated incident.

Fast forward to the present day, in my current role as a marketing consultant I am acutely aware that far from being a one off, it’s a frequent occurrence.   I’d also argue that given the new world of customer engagement across multiple channels that this segment anonymity is more of an issue now than a decade ago.   Customers expect relevance leading organisations to become more data dependent – the ability to consistently plan and track shifts based on segmentation is only possible when you can successfully classify customers and prospects.

So if you’re just about to embark on a segmentation project then save yourself some pain by upfront planning to establish what you need the outputs to influence – it’s probably a long list so prioritise and recognise that no one segmentation will be perfect for each scenario!  Finally consider trading some up front discrimination for a segmentation that’s actionable – there are ways to develop bespoke segmentations which allow you to allocate back segments to individuals on and offline.  At least this way you will have an answer when someone in your organisation asks you how to target your ‘New Wave Adopters’ group with the latest product launch. 

Debbie Oates is a principal consultant with Experian Marketing Services division and specialises in managing and implementing customer insight, targeting and planning led projects to deliver increased effectiveness of clients acquisition and customer management programmes.

If you have attended any of the numerous digital conferences and exhibitions this year you will have noticed that attribution is the hot topic, as was the case with web analytics, SEO and PPC in previous years. But one area that is often overlooked is how a good segmentation strategy can be used in your online acquisition and optimisation strategies.

In the vast majority of companies with a customer database there will be some sort of segmentation in place. Offline acquisition strategies will be driven by targeting the desired segment and costs of campaigns will be calculated around the value of those segments. So why isn’t the offline model replicated online? There are three reasons why:

1. Digital marketers have not had to be concerned with targeting because the migration of the population online has meant low acquisition costs and easily achieved volumes but this can create a new set of problems around product offering and customer communications.
2. Targeting is more difficult. In a piece of direct mail you can target a postcode that matches your segment and remove existing customers. Online, prospects and existing customers will both see your campaign.
3. The link to the customer database is not always in place. For example, a search bid management tool will optimise to a sale or a lead but will not know if that was from the targeted segment. Indeed it’s likely that the bid management tool will not recognise prospect from customer.

So why should the digital marketer use segmentation to inform their acquisition strategy? Firstly, year on year growth is now slowing down online. The low hanging fruit has well and truly been picked! Secondly recruiting the right customer segment will increase profitability and enable a multi-channel strategy approach if the online and offline channels adopt the same acquisition strategy.

So how does the digital marketer implement segmentation into their acquisition strategy?  Here are our 10 steps for using segmentation for online acquisition:

1. Build the link from your online acquisition channels into your customer database. Ideally this will be through an API so campaigns can be managed and optimised real time
2. Ensure the acquisition source is flagged in the database so you know which segments are being driven by the channel
3. Use an online intelligence tool to identify which sites and keywords your targeted segments are using and put these in your campaign
4. Make sure all creative including keyword copy is aimed at the desired segments
5. Use targeted display advertising which can now be linked to postcode to drive the desired customer segment
6. Ensure a true multi-channel campaign by linking and measuring the online and offline campaigns together
7. Drive your desired segments through the affiliate channel by rewarding affiliates based on your segmentation
8. Segment the affiliates themselves so you can have different communication strategies with them and again concentrate on the ones driving your desired segments
9. Use website personalisation to appeal to your different segments and improve conversion
10. Always ensure you use a robust test and learn methodology

Optimising your online channels using segmentation from your customer database will drive profit and gain competitor advantage as this rather obvious strategy is still not the norm online. As more of the digital technology, web analytics and attribution data get exported in to the customer database, segmentation will be necessary to make sense of all the data and drive the personalisation customers now expect from their online customer journey.

Clive Gosling is Head of Consulting with Experian's Marketing Services division and brings both the real world practicalities of day to day business and the in depth customer intelligence Experian can provide to a seamless business solution that is both achievable and profitable.

As a former Head of Online Customer Acquisition for a large home shopping company I have for a number of years seen acquisition budgets migrate online. Double digit year on year growth, relatively cheap media and real time optimisation have made the transition somewhat inevitable. Certainly I was one of those quick to prophesise the demise of offline channels like direct mail.

However I’ve now revised my opinion. Why? For a start new online customer acquisition costs are starting to creep up and the cost savings over direct mail are not so obvious now. For example it’s difficult to target keywords at new customers only. Existing customers clicking through on these keywords will mean increased acquisition costs and often dissatisfied customers if they think the acquisition offer wasn’t available for them. More importantly though is the need to target the right new customer. Targeting the wrong new customer can cost money and here I think is where I can still see a role for direct mail.

For a start you can de-dupe existing customers in a way that is only really replicated online through email acquisition. Secondly you can hit your desired customer through targeting models and post codes that have been profiled to match your ‘bulls-eye” new customer. And lastly direct mail creative gives you more opportunity to convey your offer or promotion.

Inevitably though in this new world of multi channel engagement marketing and the single customer view it’s all about contacting the right customer through the right channel for the right reason. This applies as equally to new as it does to existing customers and so direct mail isn’t dead as it can, and should be, an important part of any acquisition marketer’s armoury.

Direct mail is dead. Long live direct mail.....
As part of a joined up multichannel acquisition strategy!

Marie Myles is Director of Consulting for Experian's Marketing Services division. She can adapt and apply her extensive skills in any sector where customer data management and the application of analytics and research is key to added value.

Loyalty schemes aren’t right for every retailer, but the rich customer insight they can provide is.

In theory loyalty cards provide retailers with an incredibly rich source of consumer data, allowing them to promote customer retention, avoid wasted generic marketing spend and engage with the most lucrative customer segments.

But the vast majority of retailers’ loyalty schemes have, until now, been relatively binary in nature – limited to knowing person X buys item Y, or used to segment the customer-base and enhance wider marketing capability. It’s hardly surprising that some retailers are questioning whether loyalty schemes are beginning to run out of steam.

Retail nirvana
Loyalty schemes are expensive and not suitable for every retailer. Where a retailer benefits from frequent and high volume customer footfall, and where the environment is highly competitive, the case for investment can be justified. Supermarkets are a great example – for them, understanding customer needs and reacting to these quickly can help secure a competitive advantage. In slower moving sectors, like household goods, the cost can seldom be justified – consumers don’t always visit stores frequently enough.
In the past, if a retailer did not have a loyalty card their customers were anonymous – only becoming visible through market research panels, exit and postcode surveys. Today, with the advent of web-analytics and other online insight, consumer activity on the web can be widely understood. This is all without the need for a costly loyalty card. The retail nirvana of the future has to be about recognising who a consumer is when they use their loyalty card in-store, but also how they transact online, with the necessary permissions, and how they might be interacting with search and social media. This scenario hands retailers a true multi-channel view of who consumers are.

Where to go from here?
But used appropriately, loyalty cards still have a significant role to play. For those retailers with schemes to simply throw them away would be wrong - so much data is still a very powerful tool, so how should they evolve?

One key dimension to add to the current segmentation is an understanding of consumer wealth. You know they shop in your outlet, but how much of their spend are you getting; 5%, 50%, or more? Overlaying these wealth factors will indeed assist in assessing headroom and up-sell, which is crucial given that acquisition is getting harder to come by.
Also bear in mind the powerful nature of social media; customer insight in these areas is essential, are you overlaying not just what they buy but what they think of you?
Loyalty schemes are here to stay, but more information must be added to take customer marketing to the next level. Experian has a long history of helping retailers - both with and without loyalty schemes - to develop this rich customer insight to direct everything from store network planning, selection of trial stores, and range planning, to local, national and international marketing initiatives.

Clive Gosling is Head of Consulting with Experian's Marketing Services division and brings both the real world practicalities of day to day business and the in depth customer intelligence Experian can provide to a seamless business solution that is both achievable and profitable.

The last 10 years have seen marketing theories come and go; indeed constant change is something that most marketers have learnt to embrace. As marketers we need to ask: what’s happening in our day-to-day world? What are the changes driving consumers’ purchasing behaviour and how should we react?

The need for marketers to pre-empt and react to change has accelerated in the last 3 to 4 years, with the credit crunch and shifting financial circumstances taking the starring role. Indeed it’s clear that consumers now have a very different relationship with money and how they spend and save it.

I’m sure there were millions of dutiful citizens filling in their census survey on March 27th, counting their children and letting the government know they are still here doing X or Y. Not too long ago this would have been very useful information. However if like me you were filling in the form taking stock of what had changed, you might have also wondered what your answers would have been had they asked for attitudes to life, savings, loans and pensions, and how they had changed. Without doubt the change-o-meter would have been in a very different position.

It is these changed attitudes that marketers now need to not just understand but utilise, react to and listen out for. Of course we still need the cold hard facts of data - the lifeblood of marketing - but the need to consider customer attitudes is essential. Your customers are out there now telling you what they think. It raises the critical question, are you ready to listen and change?

For now, let’s assume you are ready. To be successful a clear view of customer segments overlaid with attitudes is essential. This is going to require a database that captures everything the customer is telling you; complaints, service calls, social media discussions on your brand for example. It may also require external segmentation data, which will enhance this multi-dimensional view to a much greater degree. You’ll then be in a position to build an understanding of your customers’ key drivers, their attitudes and what their long-term goals are.

Now ensure you let them know how your product benefits them and use attitudinal insights to get the message right. Stay engaged and in tune with the customer - constant dialogue to move them through relevant product ranges is essential. Use your range of channels to good effect; enhance digital and social media to enable more granular levels of quick contacts on a one-to-one basis.

Above all, consider this: customers hold the power. The credit crunch has been a catalyst for major change, so you must change as well. Get it right and they will become loyal plus let many others know, get it wrong and they will let thousands of others know.

Clive Gosling is Head of Consulting with Experian's Marketing Services division and brings both the real world practicalities of day to day business and the in depth customer intelligence Experian can provide to a seamless business solution that is both achievable and profitable.

For the last three or four years digital marketers have been discussing attribution in forums and conferences but now at last it seems everyone is rolling up their sleeves and implementing attribution to varying degrees of sophistication. Indeed the buzz now seems to be around phrases like ‘beyond attribution’. This article will look at the 5 key questions any digital marketer should ask before embarking on setting up an attribution model and then ask what next? First though a brief overview of what is meant by attribution and how it has evolved over the last ten or so years.

In the beginning there was traffic or visits and the big questions were:

1. How many visits do I have to my website?
2. How many sales have I made?

Then web analytics emerged and the digital marketer no longer had to rely on the ‘Webmaster’ supplying web logs for translation. It was now possible to measure unique visits and conversion and examine customer journeys. The analytics tools also provided a view of where the traffic was coming from. The digital marketer could start to measure the effectiveness of his advertising. However as web analytics tools were designed to measure the effectiveness of websites and the behaviour of customers on those websites the journey the customer took to arrive at the website was not measured. Hence the emergence of the first attribution model the ‘last click wins’. This is still the most common form of attribution. The problem with last click is that it favours search brand terms and, depending on the vertical, affiliates. Other media such as display advertising, email and social are down weighted. In effect if you optimise to last click you run the risk of optimising your campaign to such an extent that although ROI improves you lose volume and future sales and/or leads. You still need to generate demand or interest and for that you need channels such as display and none branded search. These channels all have their own measurement tools and for many marketers the first forays into ‘multi touch’ attribution will have been through their search bid management tool.

So what is ‘multi touch’ attribution and what are the key questions a marketer should ask before setting up an attribution model? ‘Multi touch’ attribution is measuring the effectiveness of your media spend by modelling data and desired outcome in terms of sales or response and then optimising the channels accordingly to deliver improved performance and feeds into the customer engagement strategy. So what are the five questions you should ask when implementing ‘multi touch’ attribution?

1. Do I need a ‘multi touch’ attribution model?
2. What channels are you measuring and should this include offline?
3. Do you have the tracking in place to measure all touch points?
4. Do you need real time attribution or can modelling retrospectively suffice?
5. Are the skills available for analysis of the data and implementation of the model?

So looking at these in turn ....

The first thing to consider is do you actually need a ‘multi touch’ attribution model? Reasons you may not might be a lack of advertising. You may only advertise through a small number of keywords on Google and last click may suffice. Another reason could be your sales cycle. If your sales cycle is relatively short, hours perhaps a day, then again last click will probably suffice. However if you have any of the following - a significant advertising budget, multiple ad sources, sales cycles are longer than a day or you have different sales cycles depending on the product - then ‘multi- touch’ attribution is a more obvious choice.

Once you have decided on a more advanced attribution than last click you most consider which channels you are going to measure and can this include offline. Ideally you should be measuring all your digital activity and offline wherever possible. Typically offline can be tracked through unique URL’s, unique product codes or unique phone numbers. One reason you may exclude a channel from your model may be tracking.

Tracking is key to a successful ‘multi touch’ attribution model. Ideally you want all activity tracked through the same source usually a container tag solution. If this is out of scope then tracking will be through existing web analytics tools and third party tools such as ad serving technology and bid management tools. If this is the route taken then the model will not be real time but applied retrospectively.

Real time attribution has a number of advantages not least the fact the data is not out of date. There is also the added advantage with the container tag solutions that you can de- dupe in real time. Based on your model you can decide not to fire tag requests for examples if a cashback affiliate is the last click (goal hanging) you can choose not to fire the affiliate tag. Another advantage is that if the tracking is set up correctly and you have a sizeable paid search campaign you have a real time % of how your none branded ad groups are supporting your brand terms.

Finally and most importantly it is one thing having all the data for the attribution model but the right skills will be needed to build the attribution model and put a rigorous testing plan in place. These skills will usually sit within the insight department of the larger companies or within external agencies or consultants.

Once you have your attribution model in place you can start to look ‘beyond attribution’. If it’s generally acknowledged that we have now moved from last click to a ‘multi touch’ attribution modelling then the opportunity most surely be to push data back from the customer database into the model. The next logical step is to optimise not to a sale or lead but optimise to customer behaviour or life time value.

Marie Myles is Director of Consulting for Experian's Marketing Services division. She can adapt and apply her extensive skills in any sector where customer data management and the application of analytics and research is key to added value.