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Young and not so reckless; how to engage digital natives over the long term

There is a well trodden customer strategy within many businesses: get them on board early and keep for them for life. Simple really, except that the two fundamental strands are now harder than ever. The younger generation today is more cautious of financial commitment and pending

across all sectors compared to just a few years ago. What’s more, comparing offers online is second nature and young people, in particular, are adept at swapping suppliers and brands to get the best deal.

Before suggesting how marketers can address this issue, we should back track and look at some real evidence. According to the You Gov debt tracker which helps inform Experian’s Financial Strategy Segments, there has been a four-fold drop over the last three years in younger groups taking on large financial commitments without considering the consequences.

This prudence was also evident in some of my recent work in the insurance sector which proved, categorically, that younger drivers are claiming 20% less than the so called middle aged ‘safe bets’ due to their awareness of potential financial penalties. These and many more indicators are showing a real shift in behaviour: the younger generation is becoming the most cautious of all.

Against the backdrop of the current economic climate, the younger generation has been able to adapt the most – partly because this group is, on the whole, unburdened by large mortgages and so has the capacity to change spending behaviour and be fleeter of foot in managing outgoings.

Despite the pressures on incomes, disposable income is still there - but you are going to have to work hard to get at it now. I may be being over simplistic but it seems to me that, as marketers, we used to think that marketing to this group was all about something being shiny and new, ‘be the first to have’ etc and let the cost appear way down the page. However, if this group is, or forms part of, your target market, those messages will need to change. More than ever, here is a group that is looking for value - not just today but in the long term.

The messages will have to work harder to be relevant to their specific interests, show how you will add value to their lives before they will ultimately add value to yours. Thankfully they are out there right now telling you what you want on all the social media sites, it’s time to gather that information and work out your key value message!

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.

Eight-year olds playing football!

Direct mail is not dead! A statement that might seem strange; especially when you consider the title of my blog. How on earth can it explain that there is life still left in direct mail? So here we go, bear with me.

If you have ever seen eight year olds playing football then, like me, you’ll know that the ball is like a magnet. Every youngster on the pitch is within a 10ft radius of it, in effect a sea of legs and arms with no more than a hair’s width between them. It’s natural; they all want a piece of the action don’t they?

Now move in to the marketing world and imagine the ball is the shiny new digital channel - the new hot way of communicating with customers. Yes, there is a need for some of the players to be in or near this channel, otherwise the game would go nowhere. But has this left space wide open for those able to sit back and reflect a little on where to make their next play?

I’ve worked with a few clients recently on DM campaigns, in some cases the first for a while. Without exception they have repeated the activity within three months, something no one would do if it had not provided the results they were after. So, while digital is now a critical part of marketing campaigns, there’s still space for Direct Mail, a channel that may have struggled in the past owing to the sheer weight of paper landing on the doormat.

Rather like an older and wiser football team, you realise there is space for all on the pitch; everyone has a role, if you like call it multi-channel marketing. So the next time you watch those eight year olds playing football, imagine the ball as the shiny new channel and ask yourself who is the wisest kid on the block? One of the 20-strong scrum or one of the lone children waiting on the goal line?

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.

Slow and steady does not win the race

Over the past few years there have been many changes in the workplace. Some of the obvious ones have been a reduction in headcount and fewer people having to do the same amount of work. One that has also crept in is the need to examine every penny spent with a microscope.

Now, in isolation this is a good thing and it is often required, however many businesses are dealing with this by ensuring every said penny is signed off by a committee, a board and then the CEO. To actually get anything done is like walking through treacle.

In some areas of a business and for some sectors this won’t really matter too much; Fred’s computer will see him through for another month and the restaurant tables won’t fall apart before Christmas. But, in the world of marketing this is value destroying in the extreme. We often hear right time, right place and right person – one of many snappy lines dressing up the basic principle of selling something. This all usually starts with the right idea of course, yet if it takes months to get moving and communicate to customers then we may as well forget all the right time, place and person!

Everything from data, customer opinions and needs change over time, so we can probably assume our campaign planned months ago is now less likely to reach the right customer in the right place and we know for certain it’s not the right time.

So, next time someone complains about how they were expecting more from a campaign, ask yourself this question. How long did it take to actually launch and how old was the data when you finally got to use it? I bet the answer is scary!

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.

Is Waterstones onto a winner?

The news last week from James Daunt, the new MD of Waterstones and founder of upmarket bookseller Daunt Books, that the bookseller is planning to launch its own eReader has been met with mixed reaction by the marketing and bookselling industry.

My own interest as a digital marketer is in understanding what the thinking is for multichannel marketing to the book-buying public. Daunt cited how impressed he was by Barnes and Noble in the US who launched their own eReader and allow customers to read them in their stores. This does seem to indicate that the business is thinking about the multichannel experience of the brand and how they can link offline and online interactions.

As an upmarket bookseller Daunt clearly recognises the importance of the overall customer experience. Anyone who has been to Daunt Books in the more upmarket parts of London will tell you time spent in those shops is both fascinating and relaxing (well, for me anyway) and – crucially -  you always end up buying more than you intended.

This approach has the support of the book publishing industry too. Publishing insiders tell me that they prefer working with Waterstones rather than Amazon because Waterstones understands the importance of building communities and experience around particular titles and of taking a longer term, strategic view of bookselling. As they see it Amazon commoditises books and drives value out of the industry while Waterstones, though not a niche business by any means, wants to build relationships with customers through the books they sell.

This philosophy now extends to their bookshops, their digital presence and in the near future to ereaders. There are also clear signs that they have recognised the value of collecting customer data and using that to build communities around different genres of books with the Waterstones brand at its heart. This activity pre-dated James Daunt but clearly his arrival on the scene and the announcement this week that they are pulling Waterstones’ long-standing three for two offer, indicates a fuller commitment to this approach and a rejection of the commoditisation of books. No doubt this will be news to the long-suffering publishing industry.

At this point we have no idea what the data strategy for eReaders is at Waterstones but let’s indulge in a little crystal ball gazing for a minute and think about what the opportunities are for a multichannel data strategy for Waterstones.

  1. Email – a key driver of relevant, segmented communications
  2. Social – linked to email, social-led campaigns around specific title launches would be really powerful
  3. Transactional data – is collecting a wealth of transactional and browsing data, which, when matched to email and social activity would provide a holistic view of the Waterstones customer. Within this lies a treasure trove of data on customers’ ereader activities – for example, titles downloaded, frequency, recency and value of downloads.
  4. Profile data – drawing on external data sources to build out a fuller profile of customers compliments behavioural data and allows a more modelled approach for targeting new market segments
  5. Exit interviews from bookshop – let’s not forget that exit surveys do still have a place in this data-driven world, if only to validate some of the behavioural data being collected.

So could it be that the triumvirate of retail outlets, online presence and the eReader could help Waterstones boost its relatively weak £9m profit against a £500m turnover (latest trading figures) and challenge the supremacy of Amazon and the supermarkets? Publishing insiders think they may have missed the boat on this one but I think the jury is still out. If Waterstones can use data as cleverly as Amazon to sell books and build communities, they may just be in with a chance of success.  

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.

Cooking up a Single Customer View - Why do Marketers Struggle?

Culinary luminaries despise dishes with too many ingredients – but is it the ingredients that pose the problem or the execution of the dish? Great ingredients, a talented chef, but no recipe.

Let’s take a growing business, with growing customer touch points. Increased customer interaction leads to increased data capture across multiple, growing channels. Data storage systems seem to multiply overnight and all-of-a-sudden marketers are faced with data overload - disparate sources, a plethora of data types and ever increasing customer expectations; the perfect recipe for a data management nightmare.

So why do so many businesses struggle to achieve optimum customer insight? The simple answer is the absence of a Single Customer View (SCV). More often than not, the ingredients are all there – plentiful data, excellent internal resources and established relationships with profitable customers, but the organisation’s strategy is often product-led and their data assets aren’t customer aligned. Without a customer-driven data strategy, marketers can’t hope to be truly customer-centric.

In addition, data management strategies to deal with increasing data volumes and sources and to create meaningful insights are often weak. The problem is compounded by a lack of buy-in from key stakeholders, which leads to the SCV agenda not being a priority or worse still, not existing at all.

Instead, new data storage systems are introduced to plug the gap – which ironically increases gaps elsewhere. Inevitably, the distance between each customer database grows, which leads to further isolation of data around the business. And so it continues...
Businesses need to recognise the results that an effective customer centric strategy will help them achieve and they need to learn that a Single Customer View is the recipe that brings all these ingredients together.

Five steps to developing your SCV and data strategy:

  1. Understand your data sources and the data’s journey thereafter.
  2. Set-out the policies and procedures to ensure that data storage is managed effectively.
  3. Review your organisation’s data strategy, data quality assurance and optimisation – are you maximising the value of your data assets?
  4. Are the necessary resources, including IT and staff expertise, in place to facilitate the SCV agenda?
  5. Everyone on board? Nothing is more detrimental to a SCV initiative than key stakeholders resisting the change. Ensure all key influencers are privy to communications as soon as the SCV agenda is established.

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.

How can marketers use data to achieve true customer engagement in the multichannel reality of 2011?

With more marketing channels than ever before, marketers now have access to an absolute wealth of data to enhance customer engagement. It’s opening up a lot of opportunities – but also posing a few challenges.

Let’s take email as an example, companies can see who’s opened the email, who’s clicked through and who didn’t bother; but are they collecting that insight at the customer level and matching it back to more traditional databases? It’s a very different world to direct mail. You might know if it had been delivered, but not whether it was seen or opened.

Now technology means you can develop a much better understanding of the ways in which your customers are engaging with you. Identifying them is the key to success in customer engagement, be it through IP address, a cookie, or better still as a registered user or customer. The data gleaned from email campaigns, website visits and transactional data allows companies to build up a far richer picture of the way they engage with their customers. With tools that allow the creation of a single view of the customer it becomes possible to develop far more complex and sophisticated multichannel campaigns.

Experian’s cross-channel marketing database solutions offer ‘multiwave’ capabilities, enabling a campaign to be based on multiple phases, each triggered or managed according to the responses or behaviours of an individual. And these campaigns can be delivered through multiple channels, ideally selected by customer preferences. It would be all but impossible to manage campaigns this complex using spreadsheet planning, but our solutions allow campaign management to be configured in a highly detailed way, with customer profile and behavioural data driving the campaign.

A decade ago this would never have been possible; those insights into customer engagement just would not have been available and the sophisticated multiwave capabilities needed to act on them were not sufficiently advanced. This is opening up opportunities for companies operating in many different sectors, from financial services and retailers, who you might expect to use this sort of solution, to new sectors.

So analysing data to find actionable insights, then communicating using software that can target and interface into different channels - like email, social media and mobile as well as traditional channels such as direct mail and call centres – all means you can be sure that you’re not only reaching customers, but engaging them with the most effective messages.

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.

Customer Engagement: A New Paradigm?

Both CRM and Customer Engagement promise increases in loyalty and customer profitability based on the delivery of continuous value to customers. CRM saw the first step away from one-way, mass marketing to two-way dialogues and with it came new technologies to facilitate these relationships. But in most cases it was the company that drove the conversations and not the customer. However, with the advent of Web 2.0 and social media applications, the power of the consumer to drive these conversations has grown significantly.

This growth in consumer power, coupled with advances in data processing technologies is leading to strategic shifts; a move from relationship plans with customers to engagement plans. This marks the next fundamental shift; we have gone from mass to two-way relationships to two-way engagement.

The greatest step change marketers must consider is how to allow customers to proactively engage with their brand and whether they are able to react to them. Brands need to use Web 2.0 technologies and new processes to manage a true two-way communication. But how will this affect data strategy, management, analytics and campaign planning?

The use of existing database, analytics and campaign management tools in this new era is still central to a marketing plan. Marketers can continue to exploit existing transactional and personal data to drive the engagement plan but should also take advantage of digital data and automation techniques. To embark on this process, consider our 7 steps for driving customer engagement:

  1. Ensure that relevant data capture management is efficient and captured at as many points as possible; including data that isn’t at a personal level
  2. With added insights and data, look to more advanced campaign management techniques such as trigger and wave campaigns to automate the delivery of many communications
  3. Ensure you have the right tools, people and processes to exploit this growth in data and contact points with your customers
  4. Look at new forms of data that can be added to traditional transactional databases such as email and aggregated web behavioural data
  5. Enhance analytical insights off the customer database using new data to improve customer engagement
  6. Work with web and social media analytics to create a lifecycle or customer engagement dashboard as a step to integrating the different analytical disciplines and move to an integrated analytics approach
  7. If you start to work along these lines then you are ensuring that fundamental CRM practices are embedded, putting you one step closer to a successful Customer Engagement 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.

Should you stay loyal to loyalty?

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.

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