The Scientific Guide To: Marketing 30% OFF

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1 The Scientific Guide To: Marketing 30% OFF

2 Who is this guide for? All Marketing and ecommerce Managers at B2C companies. Introduction Science gives us the power to test assumptions by creating experiments and carefully measuring results. Since the age of enlightenment, it has brought us everything from life saving medicine and surgery, to the very screen you re reading this on. Today, marketers are utilizing experimentation and careful measurement to create smarter, more precise marketing campaigns. The difference between ordinary campaigns and scientific ones, is that scientific campaigns are very data driven. In this guide, we ll go over why is still a very crucial marketing tactic and how to create your own scientific campaigns. 2 Retention Science: Scientific Guide to Marketing

3 Table of Contents Introduction...2 The Importance of Marketing Yesterday and Today Data Aggregation and Analysis Customer Segmentation Campaign Personalization Optimized Timing...15 Retention Science: Scientific Guide to Marketing 3

4 The Importance of Marketing Despite the rate of change of digital marketing these days, , the Model-T of digital marketing channels, continues to lead the pack. Recent surveys by Econsultancy and NimbleCommerce find that still generates the majority of revenue for B2C companies and is viewed as the highest marketing activity in terms of ROI. However, most companies invest much more of their time and money in channels with less revenue potential. marketing generated 70% of revenue across a range of European clients in NimbleCommerce The reason why takes a backseat to other marketing channels is because great campaigns are hard to do, and horrible ones are way too easy. There is a very fine line between acceptable marketing s and spam. Marketers are also much more focused on attracting new customers instead of growing current ones. In reality, the first purchase is only a small victory in the long war over your customer s attention, hard-earned dollars and loyalty. 4 Retention Science: Scientific Guide to Marketing

5 - Yesterday and Today Following the progression of other marketing channels, has become more dynamic and personalized. Smart marketers are moving beyond ordinary batch and blast campaigns, and towards more data-driven, scientific approaches. Batch and blast campaigns, where you send your entire list static campaigns, hoping that your message will resonate with some of your customers, are still around unfortunately. Companies who are constrained by the lack of data science resources have little choice but to follow this minimal results approach. 10% OFF Ordinary marketing Scientific marketing Minimally influenced by customer data Minimally segmented (sex, location) Little personalization Data aggregation & analysis Customer Segmentation (based on data insights) Campaign Personalization Optimized Timing is such a large revenue driver for leading organizations because they ve invested in the data science required to interpret and predict customer behavior, and have structured their campaigns around this data. Retention Science: Scientific Guide to Marketing 5

6 Data Aggregation & Analysis Companies are sitting on a treasure trove of data. Behavioral, transactional, demographic, and social data are all at the fingertips of every online company. However, knowing what to do with this data and how it relates to customer behavior is what separates the good companies from the great ones. Ordinary marketing only partially uses this data or even fully ignores it in the creation of campaigns. Ordinary campaigns are sent out regardless of whether a customer has just made a purchase or is only interested in one particular product category. An example of why this can be harmful is that a customer is likely to unsubscribe to all marketing messages if the message is poorly timed or didn t include offers aligned with their interests. Scientific campaigns on the other hand actively depend on behavioral, transactional, demographic, and social data to deliver messages that engage customers and motivate further purchases. Behavioral Transactional Demographic Social Sales History CRM Experian Nielsen - Length of time on-site - Frequency of site visits - Product views - Cart abandonment - Avg order value - Items purchased - Category purchases - Discounts used - Avg. household income - Gender - Age - Location - Interests - Likes - Influencer 6 Retention Science: Scientific Guide to Marketing

7 Data Types. Defined. Behavioral data Is what customers do on your website, including what pages they view, what items they have in their shopping carts, whether they re using a mobile device, etc. It also includes data related to s including when they usually read and click your s. Transactional data Is sales data such as what products customers have purchased, when, and how often. Demographic data Includes age, gender, location, and income. Information gathered from demographic data might seem limited, however when combined with the right offer can provide impactful results. For example, you can increase your overall margins by not sending discount offers to higher income individuals who are less likely to be motivated by saving money and more likely to be motivated by free shipping. Social data Includes statistics around what products are most likely to be shared on social media and who are your most socially active customers. Retention Science: Scientific Guide to Marketing 7

8 A challenge that most companies have to overcome is aggregating all of this data, as it most likely lives on many different platforms. For example, behavioral data can be found in Google Analytics and Mailchimp. Transactional data is often found in an internal database. Social data can be gathered using APIs such as Facebook s Open Graph. Demographic data is accessed through a paid database. All of this data needs to be gathered together and correlated so that statistical models and regression analysis can be performed. Successful aggregation and analysis of the above data allows B2C companies to determine and predict customer lifetime value, churn rate (percentage at which you re losing customers), likelihood to purchase, and much more. For example, marketing teams with access to these metrics can send perfectly timed win-back campaigns to customers who are about to churn. There will be more on how these metrics relate to segmentation and personalization later in this guide. Ordinary marketing Scientific marketing Data exists on many different platforms Only basic data, such as opens, clicks, and conversions are used to measure what campaigns were successful Campaigns are sent with very little input from gathered data Behavioral, transactional, demographic and social data is aggregated into one accessible database The data set is analyzed using statistical modelling and predictive analysis Targeted campaigns are created based on scientific analysis and predictions 8 Retention Science: Scientific Guide to Marketing

9 Customer segmentation Customer segmentation involves grouping together customers based on similarities they share. The purpose of customer segmentation is to improve customer acquisition and retention by sending targeted and relevant messages. By analyzing demographic, behavioral and transactional data, you can profile customers by their location, products they purchased and the time of their last purchase. This more targeted approach is an improvement to the former batch and blast method where all customers are sent the same, not always relevant, message. The limitations of this manual segmentation style include nondynamic profiles, wasted data that can t be interpreted and require quite a bit of guesswork. Share this guide: Retention Science: Scientific Guide to Marketing 9

10 The scientific approach to segmenting your customers The scientific approach takes customer segmentation a step further by analyzing all of your data sources in order to profile and predict customer behavior. By predictably analyzing transactional and behavioral data, you can identify where each customer is in their customer lifecycle and deliver timely and engaging content. Retention Science uses behavioral data to predict probability to purchase and customer engagement by analyzing metrics such as the length of time on your site, page and product views, frequency of visits, and items added to cart. Transactional data is analyzed to enable you to keep up with customers evolving market interests and needs. For example, you can determine if a customer is a bargain shopper or perhaps motivated by free shipping. Useful customer segments formed from predictive data analysis include: Predicted Customer Lifetime Value Likelihood to Convert Predicted Order Value Likelihood to Churn High Value Customer Ordinary marketing Scientific marketing Geographic, demographic and segmentation Estimating customer interests based on a couple of data points Mass of data available with inability to analyze and gain insights Transactional and behavioral segmentation Predicting customer interests and behavior based on multiple data points Masses of data are predictively analyzed and insights are formed Create probability-to-purchase models 10 Retention Science: Scientific Guide to Marketing

11 Campaign personalization Goals Relevance and engagement Incentives Product recommendations The primary goals of sending personalized campaigns are to encourage purchases and extend the customer lifecycle to the advocacy stage. This is accomplished by tracking where the customer is in their lifecycle through profiling and sending engaging targeted messages in a timely manner. Once customers have been profiled, messages can be personalized by featuring products they are interested in or sending incentives that motivate them to buy more. Customizing incentives Offering incentives such as 10% off, save $20 or buy 1 get one free, has been common in the marketplace for many years as a way to entice customers to purchase more. As successful as it may seem, this one size fits all tactic can often lead to reduced margins and wasted revenue when sent to customers who would have purchased anyway. Retention Science: Scientific Guide to Marketing 11

12 s with offers generate 48% higher revenue than other promotional s - Experian 2014 The scientific way of offering incentives Data driven customer profiling allows you to offer targeted incentives to each customer based on their behavior and likelihood to purchase. Retention Science begins by studying customer browsing behavior and analyzing their transactional history to get an idea of what motivates them to make a purchase. A unique customer profile is then built with their preferred type of incentive, whether it s 20% off or free shipping etc. This set up enables businesses to send personalized s with offers specific to that individual, thus increasing the chances of purchase. As a result incentives such as free shipping are only offered to those who appreciate it, rather than losing revenue to people that would have otherwise paid for shipping. BIG SALE 30% BUY NOW 12 Retention Science: Scientific Guide to Marketing

13 This advanced form of incentive targeting can also be used in loyalty marketing campaigns once high and low lifetime value segments have been determined. You can adequately reward your high lifetime value customers with higher incentives, nudging them into the advocacy stage. Furthermore, running more aggressive incentive campaigns to your lower value segments might spur some of them to spend a little more. Ordinary marketing Scientific marketing One incentive to all customers whether relevant or not Reduced margins due to unnecessary offers Limited ability to track incentive conversion rate Targeted incentives offered to each customer based on behavior and purchase history Higher margins from eradicating unnecessary offers Measurable incentive ROI Customer Lifecycle Engagement 10% OFF FREE SHIPPING 30% OFF 20% OFF Time Interested Engaged Inactive Advocate Retention Science: Scientific Guide to Marketing 13

14 Product Recommendations In order for customers to buy more and stay engaged with your brand, they need to receive relevant content. Sending relevant product recommendations in your campaigns demonstrates you care and want to build a relationship with them. In a study done by Rockefeller Corporation, 68% of customers left because they thought the company did not care about them. Sourcing relevant product recommendations can be done based on analyzing past transactional data. For a customer that has purchased a computer in the past, it may be relevant to send them computer accessories recommendations. Through analyzing transactional and behavioral data you can determine what product specifically will most satisfy your customer. For example, if you ve recorded and analyzed that Jane has searched red sandals and scrolled through all of your products identified as red sandals, you might just want to send her an or newsletter with that specific product matched with a coupon discount or free shipping. Not only will this help entice her into buying a pair of red sandals, but it will also show that you care about her interests and needs. Measure and recognize your customer lifetime value (CLV) by building a long-term relationship with your customers. 14 Retention Science: Scientific Guide to Marketing

15 Optimized Timing Goals Campaign delivered at right time of day Campaign delivered at right frequency Delivering targeted campaigns to customers at the right stage in their lifestyle is crucial to gaining the highest purchasing and loyalty results. The best content and offer in the world can t make up for horrible campaign timing. While some online research may suggest the best times and days to send an , in reality the most optimal time varies per person as does the frequency. Paying close attention to timing has proven to lead to higher open rates. StrongMail discovered that sending promotional s at a set delivery window increased customer engagement by 54.6%. The current batch and blast way of sending an campaign to hundreds of thousands of customers on your best-estimated time and day is proven to be a less effective way. The scientific way of sending timely campaigns Combining data analysis with predictive marketing software allows you to analyze your customers behavior and determine the best time to send your offer. For example if you know one customer profile always checks their inboxes in the evenings and makes the most purchases on Tuesday and Sunday, then sending your to that customer at 6pm on Tuesday is their higher engagement window. Retention Science: Scientific Guide to Marketing 15

16 Retention Science analyzes customers prior online behavior and past transactions to determine the times they open s, browse your site and make purchases. By using this data, analyzing past open behavior and comparing similar profile groups, the best sending frequency can be determined such as sending campaigns three times a week vs once a week. Ordinary marketing Scientific marketing Guessing how often to send campaigns to whole list or segments Guessing the best time and day to send campaigns Increased unsubscribe rate due to poorly timed s Predicted campaign frequency determined based on behavior Predicted campaign delivery time and day based on behavior Lower unsubscribe rate Tuesday & Sunday 2x a week 3pm 11am Wed, Fri, Sat 7am 3x a week 7pm 16 Retention Science: Scientific Guide to Marketing

17 Discover our all-in-one Retention Marketing platform Our data driven, SaaS-based Retention Marketing platform predicts customer behavior and delivers targeted multi-channel communications that increase revenue and encourage customer advocacy. Schedule Demo Learn More Data Analysis We analyze and clean all your customer data including behavioral and transactional, to profile and predict customer behavior. Lifecycle Marketing Our platform analyzes your customer lifecycle needs to create a series of campaigns, such as Welcome and Win Back, that engage and convert. Marketing Automation Our scientific platform triggers targeted campaigns for each customer through multi-channels including and web, saving you time and guesswork. Campaign Analytics Access dashboards analytics and reports to track the success and return of your campaigns. View our Smart Segments to instantly see which customers are high value or about to churn. Retention Science: Scientific Guide to Marketing

18 Share this guide: About Retention Science Retention Science, the global leader in Retention Marketing, is the best way to target, engage and retain your customers. Our data driven, SaaS-based Retention Marketing platform predicts customer behavior and delivers targeted multi-channel communications that increase revenue and encourage customer advocacy. We make sophisticated data science and marketing automation simple to use for all marketing teams. Retention Science powers marketing campaigns for Target, Neiman Marcus, Vitamin Shoppe, and has been featured in Forbes, Wall Street Journal, and CNN. (310) retentionscience.com 2601 Ocean Park Blvd, Suite 104 Santa Monica CA Copyright 2014 Retention Science

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