Data-Driven Marketing and the Changing Customer Journey

According to the article this week in CMS Wire, “the message at Gartner’s three-day digital marketing conference here this week can be distilled into four words: Stop guessing, start measuring.”   In session after session of the Gartner conference, “in talks about everything from customer journeys and programmatic media to social and mobile, speakers reiterated the reality that data and analytics are the lynchpins of digital marketing.”  CMS said the message echoed through the halls of the event, “where more than 800 senior marketing executives gathered to learn about marketing trends, develop strategies and uncover actionable insights.”

The topic of data-driven marketing was also discussed at PostalVision’s recent Washington DC event, where a panel including Dr. Angelika Dimoka, director of the Center for Neural Decision Making at Temple University; Jonathan Margulies, managing director at Winterberry Group; and Lisa Rapp, Director of Product Management at Acxiom, discussed consumer behaviors and responses, as well as the need for marketers to use data to bring great customer experiences to every interaction

 

The Customer Journey is Changing

Lisa Rapp, Acxiom, discussed how marketing channels are fragmenting and the customer journey is becoming more complex.  Rapp said trends in consumers are also changing over time with two main changes – consumer empowerment is larger than ever and consumers have more control than ever before.  She walked through how the customer journey to purchase has changed in the past 10 years when the consumer may have learned about the product through mass marketing such as billboard, newspaper, TV, etc.   But today, the journey can be dramatically different.

“Let’s talk about how these shoes made it here today,” Rapp said, showing off her red high heels.  She explained that a friend posted a picture on Facebook wearing the shoes, she asked where the friend got them, the friend gave her info, she then went online and searched for the brand and price and where she could purchase them in her area.   She then signed up to obtain a coupon from the store, went to the store to determine the right size, then used her coupon to purchase them in the store, took a picture, put it back on Facebook and then Tweeted about it.  “Ten years ago,” she said, “a marketer was pushing a message to me, but today I am in control of the message – I determine when and how I will engage with the brand and how I interact with the brand.”  “And at every junction,” she said, “I expect that brand to know how I am.”

Rapp also said that there are silos of data in marketing that are not integrated, resulting in incongruent communications with customers.  “The only way to have a great customer experience,” she said, “is to know who the customer is throughout the journey.”  The fact that data gets old quickly also makes it more challenging for marketers, Rapp said, noting that in one month, 2% of records in a customer database become obsolete, potentially impacting up to half of the database in just 2 years.  “Just the amount of data out there about people is overwhelming,” she said.

 

Consumers Want More Control Over Their Data

Control of data also has shifted back to consumers, Rapp told the PV2020 group.  People are more private than ever with their data, but also more open with their data, she said, noting that people freely give their preferences/data if it means the data will be used to give them a personalized and relevant experience.  Acxiom’s AboutTheData.com web site was created so anyone in the U.S. could go in and see the data Acxiom has collected about them from multiple sources, Rapp told the PostalVision audience.  It has information about age, gender, marital status, children, interests, etc.  It was rolled out about 3 years ago, Rapp said, and the initial response was so great that it crashed the server with people looking at their data.  She stressed that businesses need to educate consumers about how their data will be used.

Jonathan Margulies, Winterberry Group, discussed how marketers are interacting with consumers across all media and channels, the growing complexity of customer management, and the simultaneous threat and opportunity as consumers demand more control.

Margulies told the PostalVision 2020 group that the way Winterberry is hearing challenges articulated by clients has changed over the past few years.  From being asked to help with digital transformation strategies, it increasingly has changed to conversations about data.  “Data is the mechanism, the subject matter, the discipline around which companies are structured to make change,” he said, “but it’s really an ongoing trend toward customer-centrism that is driving how businesses looking to engage with their customers and structure internally.”

 

“Data” is Key to Understanding the Customer

Winterberry has been publishing a report over the past two years, Margulies told the PostalVision group, through a consortium of 20 direct marketing associations (now called data-driven marketing associations) where it pulls together thousands of panels globally and asks what is driving their priorities.  Is it a need to be digital, to rationalize media mix, measure or report on efforts? “The number one response for several years running now is simply a desire to live up to the promise they’ve made to customers to response to their needs,” he said.

Amazon is a great example, Margulies said, of a business which has responded to the way its customers choose to interact with it on its web site, which has distinguished it in the global marketplace.  “Data is simply the proxy for ‘customer,’” he said, “so when we talk to marketers, we talk about how we can better use data to understand customers, their interactions across touch points, and orchestrate an omni-channel dialogue that cuts across all the media channels – traditional as well as digital.”  He said ‘data’ is not one thing, it is a great many things, and said that people who come from the postal or direct mail industry better understand data, its addressable use cases, and the operational structure required to use it, than nearly anyone else in the marketing world “because those are folks who have 200-250 years of experience leveraging that kind of information for marketing results.”

“When marketers today look out at all this information,” Margulies said, “they see this tremendous untapped potential to learn more about who they are doing business with, to optimize character, relevance and bottom line value of each interaction.”  He said they are only just seeing the opportunity to do more today, which is the challenge as much for folks on the digital side as well as those on the more traditional marketing side of the house.

 

Physical vs. Digital:  Or is the Right Answer Both?

Rapp noted that about 10 years ago, Acxiom started seeing a transformation in marketing. “Right now, we are in the biggest transformation we have seen in marketing since the TV,” Rapp told the PostalVision audience.  “And just like TV, which started out as mass marketing, we are now moving into personalization,” she said.   Rapp said there is massive complexity in the marketing channel today.  “We are also seeing a shift from traditional media into digital media over the last 10 years – with digital going from a $10 billion business in the U.S. to a $50 billion business.”  But marketing budgets are not necessarily getting bigger, Rapp said, with growth being seen transported into digital vs. traditional space.

“It’s less about getting more people to send more mail as it is about getting a higher percentage of increased marketing dollars,” Rapp said.  She said the value of mail needs to be communicated by the industry.  “You can’t do cross-channel marketing without using the different media,” she said, “and our clients have been telling us when they use direct mail in conjunction with email, they get 4-5 times the response rate.”  “So the conversation should not be about whether we do traditional or digital but how we combine those to get the best result.”

That concept was reinforced by research conducted by the USPS Office of Inspector General (OIG) and Temple University’s Center for Neural Decision Making, which conducted a neuromarketing study looking at different human responses to physical and digital media in the consumer buying process, including intent to purchase.  Dr. Angelika Dimoka shared with the PostalVision 2020 group highlights from the research, “Enhancing the Value of Mail:  The Human Response.”

“Neuromarketing,” Dr. Dimoka explained, is predicting consumer behavior and decision making by using traditional tools and research techniques as well as neurophysiological tools like brain imaging, eye tracking, biometrics, neuroimaging and genetics that help us look at how consumers behave and make decisions.

The research aimed to answer 3 key questions – whether all marketing channels (physical or digital) are equally effective in reaching out to consumers; what the impact of physical and digital marketing media during different stages of the consumer’s buying process; and what additional insights can be derived from using neurophysiological measures.  The study looked at the subject’s attention, engagement, affect, memory and desirability in reaction to the physical/digital marketing media.

Subjects were exposed to 40 different ad stimuli, shown in physical or digital format, and the moment-to-moment experience was captured with eye tracking and biometrics.  A week later the subjects returned and their brains were viewed using special MRI to determine their recognition of the advertisements shown the week prior, and their confidence level in that recognition.  Subjects also were assessed in terms of their willingness to pay/bid on the products they had seen.

Key findings from the study included that subjects spent more time with physical ads than digital ones, but when assessing focused attention, they spent more time on digital than physical.  Looking at specific components of the ad, such as brand or tagline, the engagement was the same.  In terms of emotional reaction, however, there was higher reaction to physical ads than digital.   In addition, subjects could remember quickly and were more certain they had seen products advertised in the physical ads, and when asked willingness to pay for the product there was no difference when self-reported by the subject, but the brain activity in areas associated with desirability was higher in response to the products advertised in physical.

“There is a complementary role of digital and physical formats, which offers marketers a powerful way to optimize their media mix,” Dimoka said in summarizing the research findings.  “If short on time,” she said, “digital format captures the subject’s attention quicker, but for longer-lasting impact and easier product recollection, a physical format seems to be the better option.”  She cautioned that this is the first such study and the findings need to be replicated.  She said the group is working on a follow-up study with the OIG to ensure the story is captured correctly.

 

Save the Date for 2017!

PostalVision 2020 will continue to bring together thought leaders and posts from around the world, to discuss innovation and the challenges they face now and in the future.  Save the Date now for our 2017 event – March 21-22, 2017 at The Ritz Carlton Pentagon City (just outside Washington DC), and stay tuned for more information.

By Kathy Siviter

The comments in this blog are moderated. Each comment will be reviewed to ensure that it contains no crude language, solicitations, personal attacks, or anything that may be regarded as inappropriate is included.  In an effort to facilitate an ongoing conversation, comments will be reviewed in a timely manner. The views that are expressed in this blog are those of the individual contributors and do not reflect the views of PostalVision 2020. If you have any questions about commenting or are experiencing issues, please contact Bryan Klepacki

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