By Ian Liddicoat, Managing Director at EMB Marketing Sciences.
As human beings we exhibit totally different behaviours, for example, whether we are driving a car or walking along the street. This just reinforces the view that our perspective on life, as in business, is a function of our experience and environment.
As marketing professionals we too have to be concerned with understanding human behaviour, whether this is for B2B or B2C applications. In this endeavour, there are a myriad of tools, techniques and data at our disposal to make this process profitable for the business and rewarding for the customer.
There is also no doubt that the range of tools available to us has increased exponentially in the last decade and this growth shows no sign of slowing. This raises very real issues of complexity in determining the optimal marketing strategy and how this is supported by the effective use of data, analytics and technology. Just like a motorist or a pedestrian, our decision-making is a function of our experience and mistakes can be costly.
In recent years, technology has revolutionised many aspects of business life and marketing is no different. Automated campaign control cycles linked to a single view of the customer across all communication channels have revolutionised direct communication processes, particularly given the very granular data available through digital channels.
These platforms have enabled many stakeholders to have a common view of all campaign processes and their associated metrics have provided a genuine ability to vary investment by segment and to deliver the experience that a customer demands. Digital marketing technology has the ability to very quickly test the appetite for new offers or products and has consequently seen online media spend climb to more than 20% of total spend in the UK.
For those businesses that have achieved significant efficiency gains from marketing technology, there is no doubt that this has changed how marketing functions plan their strategies. This is because an efficient, multi-channel infrastructure bestows an ability to enhance the degree of personalisation for the customer, at a speed that was not previously possible and at a unit cost that ensures the Finance Director remains a committed stakeholder.
However, for some organisations, investment in marketing technology has not delivered an acceptable return, a sad fact that is the result of a range of factors that varies significantly from one organisation to another. For many, this is the result of a failure to align a number of other vital components such as customer data, data feeds, predictive models, organisational structures, processes and incentives. I want to focus on the alignment of two of these to a clear and effective technology strategy.
The first is the critical asset that is customer data. Such data can only be an asset to a business and its marketing function if it is integrated, collected, stored, managed and enhanced both accurately and fairly. The second is an ability to mine or model this data in such a way that future customer behaviour can be predicted with a high degree of accuracy.
Out-of-time sampling to ensure that models for response, conversion or value accurately predict behaviour going forward is vital, as is the use of the appropriate technique for the data available. In turn, these models should operate within customer segments that are small enough to be manageable, but large enough to be meaningful and truly reflect how similar groups of customers actually behave over time.
One key behavioural characteristic that organisations are increasingly having to model accurately is price sensitivity, something that requires the requisite modelling expertise as well as a commitment to price testing and integration within a broader segmentation. This ultimately ensures that price and non-price factors reside at customer level and ideally within a technology environment that is fast enough and flexible enough to capitalise on the sophisticated customer insight that can be derived.
Clearly the purpose of all of this is to ensure that the next prompted or unprompted contact with a customer moves the relationship and the brand forward, in a manner that is visible to both parties and at an acceptable cost. There is no doubt that those organisations that align technology, data strategy and effective use of behavioural modelling achieve a competitive advantage and that this is sustainable in the long term.
It is also true that for some organisations these components are superseded by an emphasis on brand equity in isolation, with insufficient focus or investment in technology, behavioural analysis and data.
If we behave according to our experience and environment, it should perhaps not be surprising that the emphasis for company boards and marketing departments is not a wide, integrated approach to managing customer insight, but one of silos and certain disappointment.
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