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Media Coverage
"Turn Data into Sales"
iMedia Connection
August 10, 2006
Precise targeting results in transactions. The founder and president of [x+1] outlines five steps to get there.
Today, the online customer touch point is the life's blood for the bulk of consumer-focused companies. In order to maximize a site's performance it is imperative that the most robust, consumer-centric analytics be applied to the site to ensure the optimal experience for existing customers, as well as prospective ones.
When users move through the website they leave imprints that tell you a little about themselves, their preferences on a particular product or service, and their willingness to buy. Tracking their movement enables a marketer to better tailor their campaign to get this user to the ultimate goal-- online purchase or repeat purchase.
But while the seasoned online marketer knows that this data will give them a competitive advantage, the primary challenge with web analytics is to get them to act on the data. Now, as a growing number of companies return to data-driven marketing, some key techniques and principles need to be incorporated at the start of the web campaign to ensure solid results and sustainable growth.
First: Face the facts
- Websites are becoming a leading driver in consumer selection of product and services firms across industries.
- Widespread marketing "clutter" diminishes the impact of commercial messages that don't address specific and individually relevant consumer needs.
- Online consumers are ripe targets for cross selling. In fact, consumers have continued to express frustrations about being unable to easily find adequate information on additional offerings.
- The internet makes it easier for customers to look to competitors for services.
The good news is that rapid technological advances allow for consumer/marketer interactions that are frequent, easier and more relevant than previously possible. Enhanced information availability empowers both marketers and consumers with insight that allows for precise customer targeting and intelligent purchase decisions.
Second: What's old is new (again)
To begin with, companies should look to their roots. Companies positioned to have the most success in audience-based online marketing are those that leverage their offline expertise in this area.
Marketers have long relied on audience segmentation and clustering to find the right segments for their varied messages offline. But the online medium, despite inflated promises of accountability and measurability, has often relied on broad strokes with a dull knife to optimize campaigns. Without audience-based online marketing -- some means of differentiating an audience based on how they act -- a typical optimization routine finds marketers looking at which offer has the highest average response rate, and then shifting all visitors toward the one or two best overall performers.
There are two problems with this approach. The first is that, in the worst case, the revised targeting relies on clickthrough as a measure for performance, a dubious metric at best-- a credit card web campaign offering "$1,000 free credit with any application, approved or not" could generate a lot of clicks, but very few ultimate cardholders. Conversion rates measured either on a clickthrough or view-through basis are the more recent proxy, but they remain too removed from bottom-line results to be a predictive success metric.
Secondly, decisions made in the aggregate, without taking into account variation in audience response, tend to obscure a tremendous amount of valuable information. It's like the old saw about having one hand in a bonfire and the other in a bucket of ice water and being "comfortable, on average." Rather than having to rely on the single message that weakly appeals to everyone, audience-based online marketing offers the promise of uncovering the dozens of messages that strongly appeal to each segment of your audience -- and making sure to match them.
This process mirrors what's being applied to the offline channel, in which sophisticated marketers constantly expand the scope of their offerings with a new offer for every demographic, interest group, purchasing behavior, et cetera. They look to blanket the universe of prospects with as many offers as necessary to maximize a complex function of conversion rate, purchase price, customer lifetime value and more. In short, they engage aggressively in audience segmentation and behavioral targeting.
Marketers can now use these tried-and-true offline practices and leverage them in a new channel that offers its own set of unique strengths. Developing a successful audience-based data-driven campaign requires these three key elements:
Third: Quantify all goals
It's critical to assign values to the various events that can be tracked. While a retail store generally has to rely on register data and some anecdotal information about how people physically move through aisles, online behaviors can be much more carefully observed. These assigned values need to have relevance, though, and a calculable starting point.
Maybe site traffic is considered a good indicator of popularity, and can translate into media sales on the other side. Let's value a visit or interaction with a rich media brand message as one point. Starting a registration or submitting an email address is worth two. Purchases can scale according to total order size or modeled customer lifetime value. Yes, it is often hard to quantify certain behaviors, but deciding to not make a decision is a decision in itself. Setting up a consistent benchmark to evaluate performance -- flawed or not -- is a first step to beating that benchmark.
Fourth: Integrate channels
Online media is an extremely cost-effective channel that can "prime the pump" with exposure to numerous prospects. How do prospects respond to offers? How, based on the preferences of actual customers, can results be extrapolated to the prospects with similar preferences that haven't yet purchased? How can you integrate direct response and brand to prove that the right sequence is one relatively expensive (to develop and serve) rich media creative per week, followed by a rotation of increasingly sweetened direct response messages with hard calls to action?
Any vehicle in isolation could sputter, but together, they can move people down and through the classic purchase funnel faster than another channel. Campaigns managed in silos -- where each business unit ignores the efforts of all others -- are necessarily inefficient. Companies that integrate efforts in acquisition, cross-sell, retention, brand and direct response across all product lines find tremendous improvements in overall performance.
Fifth: Keep a consistent picture of the consumer
Now that you're using portfolio management to deal with your inventory, use the same broad insights across your audience. Knowing that someone expressed interest by clicking on an offer but abandoning the registration process suggests now may be the time for a "cancel/save" option that allows them to complete registration at a discount rate. Or for a dormant customer, feel free to talk to them through online messaging about your new wider seats, DirectTV on all flights, and soon, in-flight wireless access through email, affiliate marketing or the homepage of your site.
In understanding where consumers are in relation to key activities, the marketer can promote and rigorously test strategies on how to move them down the purchase funnel.
At the end of the day, it's a straightforward relationship: Companies that mostly rely on the web as a source of purchases, registrations or email submissions tend to be the most innovative and motivated. This next phase in marketing will be data-driven. While the banner ad or the ecommerce website will not, as the TV commercial can, evoke us emotionally and "make us cry," they can tell us much about how to get there and how to turn the evocation into a transaction.
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