How To Win Customers Without Data-Driven Marketing

The human element – even for online businesses – always shapes the final judgment on customer retention and acquisition.

This is the exact reason why becoming a customer-driven organization is so important, even in the age of data-driven marketing.  In most cases a human interaction will determine whether customers remain loyal or churn.  This is part of the customer experience, just as much as delivering the right content to individuals to drive the desired behavior.  While data-driven marketing can handle most customer experience, for offline businesses and even online businesses, the human interaction is critical to handling the cases where things don't quite go as well as you hoped.  

The morale of this story is: make sure that your employees are your strongest, most amazing asset because the most sophisticated technology or data-driven marketing can’t replace what your employees can deliver – caring, thoughtful, on-the-spot customer happiness.

Period. Full stop.

here is so much talk about who owns the customer experience and why CMO's are reluctant to own the entire experience.  In this article the letter describes the interaction with Terry from the call-center.  Now this interaction is as much part of the brand as an advertisement driving a customer to a website or in-store.  This experience defines the brand, yet the overall person in charge of this is not the CMO, it is more than likely an callcenter manager that reports up through an operations division.  

This is where the customer-driven organization has to be a culture, not an individual.  It doesn't matter what the position title is, there is no one person that can be the customer advocate throughout large organizations.  The customer advocate has to be all employees, period.  There could be a person leading the charge, but until an organization has changed its culture to be truly customer-centric, data-driven marketing and great advertisement will never drive the most ROI possible because the organization is not focusing on the customer experience as a whole.  

For data-driven marketing to succeed doesn't need a customer-centric organization, there is a lot of value and areas to increase revenue.  My belief is all organizations should be customer-centric, this enhances all aspects of the business, not just the data-driven marketing side.

The State and Drivers of Data Marketing

What matters most is the optimization of the customer experience, relevance and (perceived) customer value as a driver of business value. Data-driven marketing certainly is not (just) about advertising and programmatic ad buying as some believe. Nor is it just about campaigns. On the contrary: if done well, data-driven marketing is part of digital marketing transformations whereby connecting around the customer across the customer life cycle is key.

Very succinct vision of what data-driven marketing is, it's all about the customer experience.  The advent of "big data" was nothing more than gathering extra data about the customers.  Gathering data is only the first step of the process, albeit a time-consuming one.  The good news is after the hard work of gathering the data has been completed, the harder part starts.  Once you have data, making sense of the data and creating actionable outcomes to enhance the customer experience becomes the goal.  This is very hard work.  It takes plenty of analysis and insight to reach this goal.  But the companies who will do this the best will be the ones that succeed in the digital age.

Among the key takeaways of the data-driven marketing report by the GlobalDMA:

• 77% of marketers are confident in the data-driven approach and 74% expect to increase data marketing budgets this year.

• Data efforts by far focus on offers, messages and content (marketing) first (69% of respondents). Second ranks a data-driven strategy or data-driven product development. Customer experience optimization unfortunately only ranks third with 49% of respondents.

• Among the key drivers of increased data marketing: first of all a need to be more customer-centric (reported by 53% of respondents). Maximizing efficiency and return ranks second followed by gaining more knowledge of customers and prospects.

I believe the first step in the process is understanding where the puck is going to be and skate in that direction.  Marketers are understanding this data revolution is coming and they are saying the right things in surveys.  The real question will be how to get there.  It's easy to identify problems, it's hard to implement solutions.  The marketers who will show they are adept at change will thrive in this new paradigm.  

Customer analytics is something I have focused my entire career.  In the casino industry we have had the optimal opt-in mechanism for many years and have collected amazing amounts of data about our customers behavior.  We have used this to create targeted marketing campaigns to our customers, so I believe in the direction the entire industry is taking.  Always start with the customer.  It will lead to creating better experiences and more profitable results.

 

Don't Persuade Customers -- Just Change Their Behavior

Most businesses underestimate how hard it is to change people’s behavior.  There is an assumption built into most marketing and advertising campaigns that if a business can just get your attention, give you a crucial piece of information about their brand, tell you about new features, or associate their brand with warm and fuzzy emotions, that they will be able to convince you to buy.

On the basis of this assumption, most marketing departments focus too much on persuasion.  Each interaction with a potential customer is designed to change their beliefs and preferences.  Once the customer is convinced of the superiority of a product, they will naturally make a purchase. And once they’ve made a purchase, then that should lead to repeat purchases in the future.

This all seems quite intuitive until you stop thinking about customers as an abstract mass and start thinking about them as individuals.  In fact, start by thinking about your own behavior.  How easy is it for you to change?

It's very hard to change behavior.  Given to their own devices, individuals will continue to behave a certain way unless nudged in the right direction.  I often refer to this concept as proactive vs reactive marketing.  In proactive marketing, the business is using direct marketing to communicate in an effort to change behavior.  This often takes the form of an offer or incentive to  incite the behavior change.  In reactive marketing, money is spent to gain awareness and then it is left up to the customer to interact with the business by clicking on the ad that has been served up multiple times.  Both of these models are important for the overall marketing strategy, but one is much more cost effective than the other.

First, you have to optimize your goals. 

For marketers, this means focusing on how to get consumers to interact with products rather than just thinking about them.  As an example, our local Sunday newspaper often comes in a bag with a sample product attached that encourages potential consumers to engage with products.

Interaction is the most important part of proactive marketing.  Be sure to measure the results on the behavior you are trying to change.  Remember, the biggest thing to watch when analyzing behavior change is did you change enough behavior to compensate for any increases in offer to entice the change?  Inevitably there are many customers that won't change behavior, but will take you up on your increased offer, so you just reduced margins for the same behavior.   

I try to instill into my team to focus on the individual and try to understand the mindset of our customer.  Are the incentives we are giving going to change their behavior?  Try to ask, "if it were me, would this offer convince me to engage with this communication?"  Always put yourself in the shoes of your customer and focus on their experience to achieve the desired behavior change.