Harness the power of data to drive marketing ROI

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1 Harness the power of data to drive marketing ROI I need to get better results from my marketing......and improve my return on investment. Are you directing spend where it ll have the greatest effect? MAKING YOUR DATA TALK

2 Contents What is data driven marketing Page 3 Common data issues Regular data cleansing Page 4 Sharing customer data Page 5 Keeping your data fresh Page 6 The data police Page 7 Maximise campaign success Use data to drive your business Page 8 Know your customers Page 9 Learn through testing Page 11 Evaluate your results Page 12

3 What is data driven marketing? At a time when every penny of your budget is under intense scrutiny, maximising the value of your spend is more essential than ever. To improve Return On Investment (ROI), you ll recognise the value of exploiting every tool at your disposal. Getting the data for your marketing right has a positive effect throughout your marketing cycle. Incorrect data can result in significant wasted marketing budget, as well as impacting on your reputation. So how can Data Driven Marketing improve your marketing results? from your marketing campaigns and makes them more effective. Using information about your customers and prospects in a more sophisticated, common-sense manner, Data Driven Marketing can win you more business, additional sales and heightened customer satisfaction. Quite simply, Data Driven Marketing tells you what your customers want so you can make sure you give it to them. By harnessing the insights and information locked in your customer data, it removes the guesswork The more you know about your customers, the more accurately you can target your campaigns. That means hitting the right person, with the right product, at the right time, for the right price giving you the right result: increased sales, and improved ROI. 3

4 Regular data cleansing Working with CRM (Customer Relationship Management) systems is never straightforward. Their very nature means it is almost inevitable that a CRM system will suffer data degradation of some kind. CRM systems are living entities. They evolve. They reflect developments in technology. They mirror changes within a business and the idiosyncrasies of the people who enter the data in the first place. Poor quality data is the result Unfortunately, the result is that you can easily end up with flawed customer and prospect data. This is likely to include duplicate accounts, dead companies, incorrect addresses, incomplete contact details, unauthorised contact permissions and inaccurate transaction information. This is particularly so when customer accounts have moved territories. CRM system data can be improved The good news is that the data in your CRM system can be improved, regardless of its provenance. Having access to clean, up to date and accurate data is essential if you are to benefit from the insights your customer data can provide, insights that could be otherwise stay locked away and out of sight. Maintaining data quality in-house There s also a lot your organisation can do in-house to ensure your data universe is marketable. Having robust processes on the information you decide to capture, and how that data is then entered, updated and managed will do much to ensure that the quality of your data is maintained. Ensuring that this data has updated permissions, is complete and up to date will keep it marketable. It is not uncommon for a business even larger enterprises to have no CRM system of any kind. While these companies might prefer to keep their customer information in spreadsheets, they are missing out on the huge benefits of data analytics, segmentation and accurate targeting that a managed CRM system provides. 4

5 Sharing customer data Traditionally, customer data has been stored in departmental silos and used only according to the needs of the department. You may well recognise the scenario: Credit data is used for credit purposes, marketing data is used by marketing and sales data is used solely by the sales teams. In many cases, information is jealously guarded, with teams fearful that sharing data will lead to infringement on their job function and loss of control over their activities. Yet you re likely to find that sharing customer information across departments will actually prove helpful to all your teams. Bringing departments together can deliver new opportunities A good example would be if credit shared financial information with marketing and sales. Marketing and sales could then pre-screen their customer database and target only those businesses they knew would be credit approved to buy other products and services. Here data is producing additional opportunity which, without sharing, would remain untapped. Creating a Single Customer View Achieving a Single Customer View, often referred to as an SCV, is imperative if the information you have about your customers is spread over different systems or departments. Even at its most fundamental level, a SCV can dramatically improve marketing results. For example, if a business has 90,000 records over 3 systems, SCV will tell you if you have 30,000 customers with 3 products, or 90,000 customers with 1 product. In more progressive organisations, marketing works with sales to generate campaign ideas. After all, it is the sales team that has the closest contact with customers. They are more aware of market conditions and the pain points that a campaign can address. 5

6 Keeping your data fresh The truth is inaccurate data will always cost your business money. This may be through wasted resources when trying to contact businesses that are no longer trading, or who have changed address, or who have a new decision maker you know nothing about. It may be due to sales teams following up leads where the prospect isn t actually interested or in a position to buy. Inaccurate data can also lead to fraud or identity theft, especially if your communications are of a financial nature. Improving the quality of your data Customer data can be improved in all kinds of ways. It can be cleansed to remove inaccuracies. It can be matched to third-party data to improve its quality. It can be appended and enhanced to fill the gaps in the information. This might include providing missing information or contact details for new decision-making contacts. This process will make your data more marketable, and can be undertaken by any reputable data company. You can also add information to addresses captured via your website, such as their company, their industry and their size. Principles of data capture The lifeblood of your customer records is fresh data the information that is up to date, and which you didn t have before. For this reason, it is always a good idea to have a strategy to keep collecting data. Decide what data you need, and then make it easier for your prospects or customers to supply it. Making enquiry forms easier to complete can make all the difference in the information people provide. Other good practices include: Checking that your customers details on their invoices match your records Sharing information across your company about direct mail addresses returned as unknown Updating your database using information from your sales teams about your customer s new recruits Did you know that 20% to 25% of businesses have changed address over a 12 month period, perhaps more than once? 6

7 The data police Individuals and the media alike appear to be more aware of privacy issues and potential for data misuse. There s no disguising the fact that this hot topic has an effect on every business involved in marketing their services to other businesses, whether by phone, by post, by or by other digital means. Compliance with the law First and most important of all is your requirement to stay on the right side of the law. Regulatory bodies can have legislation behind them, and the teeth to bite. The ICO (Information Commissioner s Office) is the UK s data watchdog and has already signalled its intention to crack down on data leaks, with potential fines of 500,000. Protecting your reputation Being fined is not the only way mismanaged data can damage your business. Perhaps even more harmful is damage to your reputation. Poorly targeted marketing can reduce your customers trust in your company. Irrelevant campaigns can be a turn off for your prospects. In certain cases, insensitive mailings (to a deceased contact for example) can seriously jeopardise a business relationship. A big danger is that you can actually be prevented from sending s to a company should they get frustrated enough to see it as spam and then register your company with a spam prevention service. Avoiding wasted budget Incorrectly addressed marketing can also waste a lot of effort, time and budget. This is particularly the case if the postage costs of direct mail are involved, or if you are presenting an expensive sales team with poor quality leads to follow up. Accurate, compliant and relevant data enables you to focus your budget and resources on the businesses most likely to be in the market for your offering. In B2B marketing, you are entitled to make unsolicited contact by to Ltd company addresses but not to sole traders or non-ltd organisations. These are considered to have the same standards of privacy as individuals. Best practice is to be transparent by asking for an opt-in and permission to . While this may reduce numbers, it means they will be more open to communication and interested in your products and messages. 3 laws you need to know 1. The Data Protection Act requires data be accurate and kept up to date 2. Privacy & Electronic Communications Regulations 2003 covers , phone, text and digital marketing 3. EU telecoms directive focuses on the use of website cookies 7

8 Use data to drive your business When you re at the stage where your customer data is clean, up to date and complete with useful detail, then it s time to start using this data to turn more of your prospects into customers, to improve your customer relationships and to increase the effectiveness of your marketing campaigns. The value of accountability One of the best things about Data Driven Marketing is that it is entirely accountable. It gives you the numbers you need to make the right decisions about how, when and where you market. By tying marketing metrics to marketing strategies, Data Driven Marketing tells you how much you can afford to spend on acquiring and retaining customers and still make money. Knowing how much to spend Armed with this information, you can confidently allocate your marketing budgets to those areas that offer the greatest potential for improved ROI. By calculating their Lifetime Value (LTV) through historical data, you can then determine your allowable cost for both acquisition and retention of customers. This in turn tells you what level of response is required to meet your profit targets. Confidently allocate your marketing budgets to those areas that offer the greatest potential for improved ROI 8

9 Know your customers In the simplest terms, there are two forms of customer data. Each is essential to Data Driven Marketing because they are both instrumental in how you communicate effectively with your customers. Demographic data who your customers are What type of business is it? Public or private? What is its correct address? Is it multi-site? Who are the main contacts? What are all their contact details? What about the businesses size, turnover, employee numbers? All this information enables you to be confident that you re making the right offer, to the right person, at the right time. Behavioural data what your customers are doing How is this business behaving? What is it buying right now, where from, and by what channel? Is it confident? Or is it cutting back? What characteristics does it share with similar businesses? Is it bucking the trend? All this information can help you fine-tune your offering to make it relevant to the needs of your target. Segmenting your customers, and predicting future behaviour Data Driven Marketing has another major benefit. By dividing prospects and customers into smaller clusters of similar characteristics you can tailor all your marketing activity according to their precise needs. Using data about how businesses have behaved in the past enables you to predict how they will behave in the future. In both cases, it is data rather than guesswork or hunches which delivers success. 9

10 Learn through testing Does your business send out the same to everyone on your database? Are results always what you d hope they d be? How do you respond when they re not? The fact is, testing every element of your communications removes the guesswork and builds sustainable and successful marketing campaigns. Test everything you can Adopt a Data Driven Marketing approach and everything becomes results focused and measurable. Testing different media, different propositions, different pricing plans, different creative approaches, different frequency and any other factors will enable you to refine your communication to maximise its impact. Refine, refine, refine Having a control cell, which combines the best of everything you ve tested previously to produce proven results, helps overcome fear of failure and reluctance to try radical changes in approach. Having at least one test cell on every communication adds to the knowledge of what works well, what doesn t, and what is required to continuously improve the success of your marketing. How well prepared are you for the B2B data dashboard? The cost of collecting and storing data has fallen, the speed of processing has improved but the way many companies use data is largely unchanged. Learning what data means and converting it into meaningful customer pictures can lead to new sales opportunities. 10

11 Evaluate your results Traditional marketing adopts a hit it and hope approach. This means you launch a campaign, wait for the results and hope you ll see a consequent increase in sales. The problem is even if you do see an upturn in sales, knowing exactly where they have come from, and why, can be difficult. Testing removes this guesswork and introduces measurability. Reviewing the testing results Understanding which elements of the marketing campaign have affected responses is crucial. A Decision Tree technique such as CHAID models or a Gains Chart approach allows for close examination of the campaign. This will reveal the best customers and the factors which contributed most to the success of the winning test cells. Continually improving To produce a continual process of improvement, Data Driven Marketing provides the feedback required to decide which segments of your customer database requires which strategy, what that strategy should be and which test cells will build maximum success into that strategy. A CHAID Model in Action Full mailing file: Response = 3.4% Business Age <4 years: Response = 7.9% Business Age 5+ years: Response = 2.1% Contact by Response = 9.6% Contact by phone: Response = 5.4% Contact by Response = 0.5% Contact by phone: Response = 3.9% 1st priority 2nd priority 4th priority 3rd priority This diagram shows a Decision Tree method of evaluation which can be used to review your campaign results, displaying how each segment of your customer database responded. Every level of the tree breaks the results down into relevant, ever more specific categories. You can trace each customer type and their behaviour from one category to the next, deciding which branch of the diagram represents a marketing priority. In this way, you can target campaigns more effectively, knowing they are being sent to the most responsive audience. 11

12 If you are interested in applying a Data Driven Marketing approach to your business, us at: or call us on

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