Putting Digital Data to Work

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Customer Experience
Customer Experience
Data strategy is essential to customer-centric, one-to-one marketing in the digital age

A smart data strategy is the key to today's successful direct marketing efforts. It's necessary in the planning of every campaign and throughout the campaign lifecycle, since results are continually evaluated, interpreted, and acted on. This cycle of learning is critical for addressing two clear objectives: improving business results (the best return) and increasing knowledge (important new insights). Only through continuous learning can subsequent campaigns build upon existing success to improve results.

The Holistic Approach

The Internet has been the catalyst for the seismic change in the way organizations view and manage data-and has made data strategizing both easier and more difficult. The amount of data available to marketers is immense and challenging; the granularity of that data can be mind-boggling. Yet this inundation of data is exactly what is propelling customer-centric, one-to-one marketing communication to new heights. No longer is the Internet merely viewed as a way to create awareness-it has become a way to drive response.

With so many opportunities available to reach individuals with the right offer via the right channel at the right time, there is no logical reason not to take full advantage of the information at hand.

Yet Internet marketing, or digital marketing, raises an array of additional questions: Which specific channels are most impactful? Should a campaign have an email component? Is traditional mail part of the mix? How does social media fit in? and the list goes on. Specific channels must be used based not only on relevancy, but also on the ability to cost-effectively deliver specific audience targets to best fulfill the objectives of each campaign.

The Internet, more than any other recent phenomenon, brings businesses and their customers much closer together. It is forcing businesses to organize around their customers rather than around products or manufacturing processes. This means that the most effective data strategy encompasses more than just the marketing group. It leverages data from each customer touchpoint across every functional area of the organization, including sales, customer service, and accounting. A cross-functional focus on moving prospects and customers to the next point in the lifecycle dramatically increases the results of all marketing efforts. This holistic approach will only gain in importance as marketing data and customer insight become even more essential in leading the development of overall business strategy.

Testing, 1-2-3

Although digital marketing data is abundant, it takes skill to turn it into useful information and apply it for long-term improvement of one-to-one marketing results. Data strategies must be broken down into discrete tactical campaign actions, supported by smartly applied technology and human talent. This enables marketers to implement measurable direct response campaigns that achieve marketing and business goals.

Just like offline marketing, successful digital marketing is rooted in well-designed tests that answer key questions to improve results. Determining the right contact strategy-the optimal combination of audience selection, offer, messaging, creative, channel, and contact frequency-has a dramatic impact on a direct marketing program's productivity. Developing an appropriate test design may seem a mundane task, but it is critical to getting the answers to these important questions.

Identifying and understanding which data can drive performance improvements is becoming increasingly complex for most businesses. Hence, the increasing proliferation of data mining and analytical tools along with the corresponding need for strategists who can interpret results in the broader business context while also being proficient in the technical aspects of data and analytics.

Rather than attempting to deliver the big "breakthrough," most businesses are realizing that sustaining performance is more a matter of incremental improvement in many different aspects of their business. These subtle but critical improvements are the result of a painstaking, systematic approach to managing data and extracting clear and actionable insights from test results.

Long-term success requires constant evaluation and re-evaluation of the successes and failures of current campaigns in order to make smart ongoing changes to future executions.A complete report for every test campaign-with campaign description, purpose, components, statistics, test results, analysis, and subsequent actions-is necessary to determine what worked, what didn't, and why. Figuring out why a particular element did or did not perform is the key take-away from any test campaign and enables the intelligent application of the insights to future campaigns.By constantly fine-tuning data strategies to reach customers and prospects in ever more effective ways, marketers can more consistently drive better return on investment.

The Next "Big Thing"

The next "big thing" in digital marketing may simply be applying proven direct marketing best practices and disciplines to new interactive marketing channels. There will always be an appetite for new and glamorous marketing channels.Although there may be a "honeymoon period" when just being in a new channel is enough, the pendulum will inevitably swing back to those marketing activities that are measurable and whose results are proven.There's a limit to how long companies will continue to pour marketing dollars into channels that "may" increase awareness and "might" contribute to revenue. Once the initial glow has worn off, the marketing efforts that deliver tangible ROI and important new insights will be the activities that continue year after year.

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About the Authors: Peter Powell is senior vice president, data strategy for Rauxa Direct; Anthony Stagg is senior data strategy manager for Rauxa Direct

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EXPERT OPINION
EXPERT OPINION