How Customer Insights & Analytics Will Improve Your Marketing Results
Over half of marketers say their companies base at least half of their regular business decisions on gut feel or experience rather than data and information. But this trend is changing rapidly – brands are looking to spend much more on analytics in the next three years. In order to provide relevant and highly personalised marketing, companies need to concentrate on insight-led customer engagement.
However, calculating the ROI of a customer insights and analytics implementation is still difficult. That is why the success of a customer insights initiative is heavily dependent on having the right strategy in place and making sure that you are not trying to optimise too many things at the same time.
Ric will outline the variety of insights that any marketing organisation should have at their disposal and how these should form a part of a brand’s marketing performance optimisation strategy.
About Ricardas Montvila
Like many other children of the Altavista and Tamagotchi generation, Ric is a digital native and finds the worlds of digital marketing and privacy fascinating. On a daily basis Ric is responsible for making Mapp Cloud the platform that all of their 3000+ brands and agencies adore and helping them create value-based and insight led relationships with consumers all over the world. Over the last 10 years Ric has helped hundreds of brands to unlock the value of data in their customer engagement strategies. Currently Ric is on a crusade to challenge marketers to fuel all their decisions with Insight rather than gut feel. After all, marketing based on averages creates average results!
Today’s presentation is based on a white paper called from gut feel to actionable insights. All of you lucky people will get a free copy at the end of this presentation. By get, I obviously mean that you will have to download it. And by free, I mean that we were never going to intend to charge for it in the first place. because that’d be just crazy. But despite you being very intelligent marketers, you’re still human beings. And free sounds like a way better deal than me saying, hey, please download our white paper. I’d like to set the scene or should I rather say provide a reality check on what we marketers have to deal with on daily basis. audiences and segments are the basic terms to comprehend. But they’re relying on on a single most flawed, complicated and irrational thing, which is humans. For example, I decide what I will wear based on what my weather app tells me. Sometimes when my stomach rumbles, I catch myself reaching for a pocket thinking is my phone. So think about it for a second. The feeling to check my phone supersedes my hunger. The phone addiction is so severe that people are inventing techniques to cope with it. For example, a friend of mine does 10 sit ups every time she has desire to check your phone. Also, my political opinions, and the worldviews are formed by what I read online, knowing well that Google recommends articles that are just supporting my existing biases, and perhaps narrowing down my view even further. But then again, I’m too lazy to do anything about this. How many people in the world are not even aware of this? And surely, you’d think advertising and marketing is there to make us happier. However, there was a recent study done, in fact, a study done back in January this year, to prove that actually advertising makes us unhappy. If we were to double the advertising spend, it would decrease the life satisfaction by 3%. How significant is that? The title says best marketing today is insane. Best time best channel best message they said it really makes it sound like you have three options to choose from 10am email, Sunday stock clearance, reality is so much more complicated. Best time also depends on the context of the interaction, contact frequency, or who the customer is. Best message can also have an offer that that not everyone is eligible for. It needs to be personalized. And it’s also part of a campaign that is trying to deliver a particular strategy, where other messages are competing for the same customers attention. And best channel will be limited by customers channel preferences, or even channel limits. All of this just to deliver a single message. In most organizations, you will have hundreds of these messages running on a weekly basis. So here’s the most fascinating fact of all 58% of marketers say their companies base at least half of regular business decisions on gut feel or experience. Rather than being driven by data and information. You incredible superhumans. There was a study done on a performance of the best AI models to predict customers likelihood to convert or churn. Now if an AI model is relying on customer demographic and transaction data alone, it can take up to a year to deliver 54% accuracy. To get an accurate prediction quicker. You also need need to add channel behavior, customer choice, engagement, customer satisfaction and message history. Yet most of your decisions are based on gut feel. Analytics and insights is ultimately about improving something. Let’s say for example, you’re trying to improve your body or health. You have a number of options. go on a diet or a meal replacement plan, buy a gym membership or get a personal trainer run, which is free, or even do 10 sit ups every time you have the urge look at your phone. Or you can also get a smartwatch to track your progress. I think marketing is a bit like sport. Some people do to stay fit and make sure they live long and healthy lives and others do to win big. The ones that do do win big analyze everything. calorie intake, sleep patterns, distance run it and you don’t win Olympic gold medals without analyzing everything you do. So here’s a question we should be asking ourself Do we do marketing, not to get a heart attack, or to win big? I think Helen hunter said it the best. It’s the execution of 1000s of small improvements over and over again, that drive transformation to the business. We have not fully subscribed to this Thought Marketing transformation will come from you being able to identify 1000s of small improvements over and over again, and acting upon them. So what is stopping most marketers from identifying these improvement opportunities? Well, I think the problem is with traditional analytics, typically, what happens is that you ingest these different data sources, the web behavior, transactions, customer choice channel behavior, into a single repository, where you aggregate the data. And then off the back of that, you probably have very smart analysts creating heavily customized dashboards that only they can understand. And in some cases, this data is being fed into other platforms via batch exports. The challenge with that is that there is a lack of talent that can actually understand and leverage his marketing analytics, it is even harder to actually act upon this data and operationalize insight. And then if the answer is found, it’s then even harder to link it back to individual customers to do anything about it. And the insight is only as valid as the accuracy of the data that you capture in the first place. And then, if you’re able to do all of those things, today, that is not always immediately available in all other platforms. Now, if you are able to apply insights to actions immediately, you can do things like this. So let’s imagine you take the most obvious program that all of you guys are running abandoned basket, let’s say someone has abandoned the basket worth 105 pounds, four hours to reengage them might be the best time. However, what happens if the basket is only 15 pounds, or what happens if the basket is 150 pounds. So if the basket is 150 pounds, it might be way too late to re engages customers, or at the basket is 15. It might be way too late. And the challenge that most marketers are facing themselves, by relying on gut feel, and averages is that they’re missing on these opportunities. And this is what we’re saying here is that marketing based on averages creates average results. So why should you invest in better customer insights and analytics? Well, there’s been numerous research that into this topic, and nucleus research of two years of analytics ROI has proven that for every dollar or every pound, whichever currency trading does deliver $9 return, which basically means 900% ROI. Let’s go back to the abandoned basket scenario. Let’s say you had 10,000 baskets that have been created over a period of time, maybe a day, out of which 78% had been abandoned. And then out of those abandoned baskets, you were able to identify 8% of those. And then you deliver emails, 97% 35% of those end up opening the email. And perhaps you get a full percent conversion rate, which results in eight sales. And typically what would happen is, you would look at improving the bottom of the funnel, doing things like improving the open rate by 10%, which by the way, can be quite hard. And that would give you an extra 11 conversions. Or you can look at improving the inbox placement rate and deliverability rate, which again is very, very important. But again, you know, that might give you an extra conversion. However, if you optimize the top of the funnel, by improving the identification rate by 5%, which by the way, is way easier than improving the open rate, you’re gonna get way more conversions. But the challenge is unless you have this data available at your fingertips, you would not know it you would not know what to focus on to optimize. And then if you move away from Garfield to AI, you can get even greater uplift. For example, best time to engage can give you 20% response rate or a next best offer can increase the offer acceptance rate by 15%. predicting how much is the customer going to spend within the next session over the next 30 days can further increase So basket size by 14%, or increasing likelihood to churn, you can decrease churn by 22%. Or predicting the likelihood to convert for a customer, you can decrease the number of coupons that you actually extended to customers. So what should we expect from an end customer insights and analytics platform? Well, first of all, all of this granular customer behavior data across various channels should be stored in the raw format never aggregated. Because in the end of the day, you want to find the individual, rather than just report on a single metric, or a KPI. And all of all of that behavior should be feeding into marketing friendly insights, rather than something that only analysts can understand. It should all have also have the ability to activate natively to the media channels, email marketing, mobile push in app, or even web personalization. It shouldn’t prevent you from graded creating these heavily customized dashboards that are more specific for your business needs. And then being able to stream all this data into various third party platforms. And when you get this right, you should be able to answer answer questions like this. Does the average basket size increase during the second? Or the third purchase? And how is that pattern changing? Or what is the expected engagement? and purchase frequency for social media followers? Do they have the same value to us as a brand, or an email marketing subscriber, or someone that only ever uses the website? And again, what is the typical frequency of visits on site for someone that comes by social media? versus someone that comes by email? Or what is the value of customers that are about to churn? quite frequently, when we talk about churn, we’re focusing so much on retaining these customers, but actually, what is the value of those customers? And in fact, would it be more profitable for us as a brand to let them churn in the first place? And if not, if they’re actually extremely valuable, what are we going to do about that? or What role does email play in converting the high end electronics customers, because all too often, we assume that every single channel is there to sell. However, in some cases, maybe for a particular product range or for a particular type of customer, the channel is mostly delivering the nurture part of the of the customer journey. Therefore, maybe email should be used more in that aspect for that specific customer segment. Whereas for other types of customer segments, it plays a critical part in converting them. And then, once you have all those insights, taking those insights from this aha moment, the moment where you realize that you have something really, really interesting here to click, therefore, being able to take this insight, and then activate it across your CRM. So email, SMS, mobile push channels, and then seeing what actually, we do get the desired effect on the customers that we intended to have in the first place. Or our marketing efforts driving long term customer engagements. Many of the analytics that you guys would be used to are typically focusing on improving performance of a specific campaign. But it doesn’t say anything about how those campaigns are impacting the the longer term customer value. And are we actually diminishing the lifetime value of the customer by providing an insight during the onboarding stage? By providing that 10% off coupon for someone to sign up? What impact does it actually have to a customer in six months time or 12 months time? Are you simply just creating an undesirable behavior for your customers? And last but not least, answer your question whether everyone in your organization, as well as your external partners are focusing on the same set of KPIs. Let me give an example. Home Base is a long standing client of map. And every two weeks we used to meet meet up with them and their agencies to discuss the strategy for the next couple of weeks. And all of the agencies including ourselves, would provide different dashboards reporting how well the individual channels have reported. And the problem with this approach is that every single channel, whether it’s paid media, whether it’s email, whether it’s SMS, Whether it’s social, they’re all tracking conversions. And we know it’s not true. Not every single channel is there to sell. Therefore, if we meet up and discuss all these different metrics, in a way, assuming that they’re all supposed to drive conversions, well, we’re all just wasting our time. So instead, what homebase did, they implemented these dashboards to show what is the actual contribution of each individual channel? And what role does email marketing or mobile push play in converting that individual customer? Therefore, in the next biweekly meeting, we can actually look at metrics that matter, and then decide, okay, it seems to be that our third, third basket seems to be declining. What can we do about that? Or perhaps, this month, we don’t seem to have as many people at the top of the funnel, in terms of the kitchen booking appointments is not as high as we did last month. So what are we collectively as a group going to do about that? And then come up with strategies for that specific KPI rather than all just talking about conversions. So here’s another question for you. Do you guys have a FOMO? yet? If not, your competitors are increasing customer insights span by 61%. And that’s not just me saying it. That’s the CMO service saying, If I had to guess why that is, because unlit x is not a new thing. Neither is customer insights. It’s something that we’ve been familiar with for a very, very long time. And I think one of the main drivers for people investing more in customer insights analytics is because of AI. And that’s because you can’t read the real benefits of AI. If you’re not going to understand how to operationalize insight, how to expose insights to your marketing teams, and then systematically turn those insights into actions. Also, analytics produces way higher uplift in performance than mobile and social. And if you guys right now, haven’t fixed your analytics and haven’t fixed your customer insights, and are creating programs for social and mobile, you probably should be rethinking your strategy. Here’s some examples of not so small improvements across various verticals, for delivering better customer insights. A daily newspaper and publisher was able to reduce the ad impressions to deliver a single sign up. Also, an international intercity bus service was able to save over 150 euros per a single email campaign, through not exposing coupons to people that they knew they’re going to convert anyway. Or an international leading bank was able to increase conversion rate for online credit card applications for being able to serve as the inside of the marketing team way quicker than they normally would have. And an international insurance firm was able to increase the newsletter engagement by 60%. Through getting better customer insights, segmenting people based on the way they interacted the brand on site, as well as the app, and then serving more relevant communications. So here’s a quick summary of what we’re talking about today. marketing analytics contributes way more to your company performance than social media and mobile. And if you haven’t fixed analytics, yet, it’s about time that you should. Also, if you implement customer insights platform correctly, it can contribute up to 5% of your annual revenue. Also, it brings nine pounds in return for every single pound spend, or dollars, whichever currency trade in. Also your competitors are increasing spending, customer analytics and insights from 7.2% to 11.6%. And more importantly, marketing based on averages creates average results. That doesn’t just apply to the abandoned basket example I was talking about earlier. It applies to your churn prevention campaigns as well. If right now, you’re still doing your churn campaigns based on people that haven’t made a purchase review for the last six months and you’re trying to retain them. You’re making a huge mistake. There’s better ways of doing this. So thank you so much for watching this presentation. I hope you found this insightful. This presentation so far only covered some of the examples Before you could be doing if you’re looking to develop a business case for better customer insights and analytics in your organization, do download a white paper. It has all of this content, as well as a methodology for building an ROI for customer insights in your organization.