Marketing Channel and Engagement Benchmark Survey

Transcription

1 Marketing Channel and Engagement Benchmark Survey By John Pinson, Senior Manager, Content Marketing, Message Systems and Carrie Scott, Director of Product Marketing, Message Systems Customer Messaging is in a State of Flux As consumers embrace an unprecedented array of communication channels, from desktop IM to social media to mobile messaging, brands that remain narrowly focused on traditional channels like voice and risk being left out of the conversation. Clearly, traditional notions of how companies interact with and engage customers need to be reshaped for a new era but how? Marketing Channels Listed in Order of Popularity Nearly all respondents use for marketing, while IM chat is still in the early adoption phase. 97% Social: 70% Print: 37% Voice: 27% SMS/Text: 16% IM: 2% To learn how today s brands are adapting to the new messaging landscape, Message Systems conducted its inaugural Marketing Channel and Engagement Benchmark Survey, compiling data from more than 100 marketing and industry professionals from around the world. The results of the survey reveal a growing understanding of the importance of cross-channel messaging; the technical barriers that many companies continue to face in implementing this strategy; and strategies that have proven effective in overcoming these challenges to achieve optimal results. The Marketing Channel and Engagement Benchmark Survey also casts an interesting light on other recent industry research in this area. According to a study by the Direct Marketing Association, 1 ROI for marketing has dropped by 25 percent since 2006, and is expected to continue to fall in the years ahead. Meanwhile, Return Path has released data showing that, after several years of relatively stable deliverability rates of around 80 percent, commercial senders saw a drop to only 76.5 percent globally in While this would seem to suggest an overall decline in the effectiveness of as a channel for customer engagement, the Message Systems study reveals a more nuanced view: while traditional marketing methods may show diminishing returns, companies taking a more sophisticated approach to the channel can actually achieve dramatically higher ROI. This paper explores in depth several of the most revealing and actionable findings of the Marketing Channel and Engagement Benchmark Survey.

2 22% 64% have added social media to their marketing operations in order to improve customer engagement. More Marketers Turning to Social for Engagement Given the explosive popularity of social media among consumers, it s no surprise that brands are making increasing use of this channel. While social marketing campaigns focused on outbound messaging can in some ways resemble traditional media, the real potential of the channel lies in two-way communication, enabling brands to engage with customers and interact in a genuine dialogue. While remains the dominant channel for customer communication, social media increasingly plays this role as well. The survey found that, among marketers that have recently employed new channels or solutions for greater customer engagement, 64 percent have added social media to their marketing operations. SMS Will Continue to Play a Key Role in Customer Engagement While not as flashy as social marketing, SMS is still seen by many brands as a vital part of messaging not just for directly marketing products, but also for broader customer 22% 40% 44% Percentage of companies that plan to invest in SMS, , and social media in an effort to revamp their customer engagement strategies. engagement. Of companies planning to revamp their customer engagement strategies, a solid 22 percent plan to invest in SMS as part of this effort, compared with 44 percent for social media and 40 percent for . This demonstrates, once again, that established channels aren t necessarily supplanted by new channels, but often continue to play a complementary role in a multichannel engagement strategy. New channels like IM and social media continue to play a complementary role in a multi-channel engagement strategy. SMS and IM: Untapped Potential for Two-Way Communication Rising investments in SMS for engagement reflect another truth revealed in the survey: the enormous room for growth in using SMS and IM channels for two-way customer communications. Nearly half 47 percent of respondents have adopted social media for this purpose, including Facebook, LinkedIn and Twitter in particular. SMS and IM, on the other hand, lag far behind with 8 percent adoption for IM and 12 percent for text. While banks and telecommunications companies have made great strides in implementing IM and SMS in their call centers, other large, customercentric industry verticals have yet to move in this direction. Given the ability of two-way automated messaging to increase engagement while driving down costs, the broader use of SMS and IM in this way offers a clear opportunity for companies with the technical capability to do so. Reports of the Decline of are Premature Two findings in the survey are strikingly at odds with the DMA report on declining ROI for Seventy percent of respondents report that their ROI for has trended upward over the past five years, while only 30 percent reported a downward trend. Sixty-three percent of respondents report that delivers the greatest ROI, compared to only 10 percent for social. How can this variance be explained? A likely answer lies in the composition of the audiences responding to the respective surveys. The universe for the Marketing Channel and Engagement Benchmark Survey consisted largely of Message Systems customers and marketing practitioners, a group skewed toward experts in customer engagement and experienced in using multi-channel communications platforms and strategies. These respondents likely use for a broad spectrum of customer engagement activities not just for marketing, but as part of a comprehensive, integrated set of two-way communications across channels. Respondents experience far greater success using for engagement activities than the industry norm. 70% Respondents reporting their ROI for has trended upward over the past five years. 63% 63 percent feel delivers the greatest ROI compared to compared to only 10 percent for social. In such cases, can indeed deliver ROI well beyond the industry-wide norm. The DMA study, on the other hand, drew its results from a more diverse sample encompassing firms of all sizes and levels of messaging sophistication. Among these respondents, many are likely to have been small and mid-size businesses using broad marketing efforts. This type of one-way communication, used to deliver outbound messages and promotions, has shown decreasing effectiveness as consumers turn to daily deals, social 2 Message Systems Marketing Channel and Engagement Benchmark Survey 3

3 marketing offers, and other types of campaigns that they find more interesting and compelling than the traditional marketing blast. An increased volume of disparate data poses a challenge when integrating crosschannel strategies. 58% Respondents who feel technical shortcomings are holding back their 52% Those who have difficulty integrating data from new sources into customer Data Sourcing and Integration Remain Key Challenges As smartphones, cloud computing, and social media change the way customers communicate and interact with companies, brands have gained an increasing volume of data in more forms than ever to guide their Making effective use of this seeming bounty is harder than it may seem, however, as the number of data stores proliferates. Simply put, the more databases you have, the harder it becomes to put this customer intelligence to work in a coherent manner. Anecdotal reports from the survey tell the story plainly explanations for respondents answers included the following quotes: One of the biggest difficulties we face is figuring out how to integrate data sources from multiple providers. There s no such thing as a standard. Problems with database company. Issues with database company and pulling activity reports. Different companies have different reporting platforms and offer different things. Sometimes, we re able to get the numbers we want but some things that we ve used haven t allowed us the kind of reporting we need. Wish I had [a] solid data sourcing arm. These findings reflect the fundamental limitations of legacy CRM systems, which were designed to manage customer relationships, not to manage customer communications. We found that CRM systems are typically unable to support interaction across the full range of online and mobile channels used by today s consumers. While marketing may have resources for multi-channel campaign management, SMS is typically unavailable elsewhere in the organization. Conversely, purchase history and other customer Given the explosive popularity among consumers of social media, it s no surprise that brands are making increasing use of this channel. intelligence within the CRM remains disconnected from the multi-channel communications capabilities used by marketing. IM and social messaging are similarly locked within silos. As a result, companies are unable to consistently leverage information about a customer s needs and preferences to deliver relevant, engaging experiences across channels. Insourcing Offers Significant Benefits While outsourcing is a popular strategy for and other messaging services, survey respondents showed a strong preference for an in-house approach. A full 72 percent said that, if they were to consider Nearly 3 out of 4 respondents would bring messaging services in-house if they added additional channels like SMS, IM, or social. adding new channels such as SMS, IM, or social messaging to their engagement program, it would be more advantageous to manage those channels on an in-sourced basis. Further insight into this preference can be found in a study conducted earlier this year by The Relevancy Group for marketing solutions provider WhatCounts, in which marketers cited greater control over integration to other marketing applications and data sources as a key driver for implementing an on-premise solution; marketers using on-premise technology were also found to integrate more disparate data sources than those using hosted solutions. Able to improve the targeting and relevance of their campaigns, and leverage more sophisticated tactics such as testing and lifecycle messaging, respondents to the Relevancy Group survey reported a 15x return for investments in on-premise marketing, compared with a 9x return for marketers using hosted solutions. Many Companies are Unable to Tailor Communications to Customer Preferences Perhaps the most surprising finding in the survey is that 51 percent of respondents do not yet offer their customers a preference center or have the ability to track customer preferences for how they prefer to receive communication. The current era of marketing has been marked by the shift from top-down, one-size-fits-all messaging to a more nuanced approach in which companies strive to offer relevant experiences tailored to the needs 77% inbox placement rates fell to a record low globally in late 2011, compared to 81% in the first half of Message Systems Marketing Channel and Engagement Benchmark Survey 5

4 51% do not yet offer their customers a preference center or have the ability to track customer preferences. and preferences of their customers. Mobile technology, cloud services, and customer-centric business strategies have given consumers increasing control over how, when, and where they consume content, products and services, fostering an expectation for a similar level of flexibility in all their interactions with brands. They may well ask why they can t specify different channels for different scenarios for example, for marketing offers during the week, social media for promotions over the weekend, SMS for important service updates, and IM for interactions with a customer representative. The inability of companies to track their customers communications preferences casts significant doubt on another response: the more than 94 percent of companies who report that their customers prefer to be contacted by . Given that fewer than half of respondents offer a preference center, and that not all of them offer a full selection of channels, this answer can be seen as more of an assumption than a concrete data point. More likely, is the overwhelming preference of the marketers themselves, given its familiarity, integration with CRM, and sheer ubiquity. In this fast-changing environment of media, messaging, and communications, however, making assumptions based on what seemed to be true in the past is a highly dubious strategy for moving ahead. Without a more concrete, reality-based understanding of their customers preferences for communication not only in general, but as they differ in various scenarios companies are sacrificing relevance for expediency and undermining their customer Conclusion The Marketing Channel and Engagement Benchmark Survey reveals a messaging environment in which companies that have traditionally relied exclusively on for customer engagement messaging are moving quickly to adopt additional channels such as SMS, Many companies still underestimate the importance of customer preference in communication and engagement. social media, and IM even while continuing to use as part of a multi-channel strategy. In this effort, they face two key challenges, one technical, the other conceptual. As they work to communicate and engage customers effectively across channels, companies must break down the barriers among disparate data stores and systems to leverage integrated customer intelligence through any channel at any time. A unified messaging platform, ideally implemented as an on-premise solution, can help address this need. On a conceptual level, many companies still underestimate the importance of customer preference in communication and engagement. Consumers today not only expect brands to respect their preference for communication channels; they also increasingly expect to be able to carry on a single interaction across multiple channels over the course of hours or days, with a sustained context, as they would in a personal conversation instead of having to start from scratch each time they move from smartphone to computer, or from to IM. Businesses that can meet this demand will position themselves as leaders in providing engaging customer experience and realize significant gains in loyalty and competitive advantage. With the mobile Internet still in its early stages, and consumer habits shifting and evolving at an unprecedented pace, best practices for customer engagement across screens are still very much a work in progress. Brands that move quickly to build up their capabilities for conversaton-oriented crosschannel communication will be best positioned to adapt to fast-emerging customer preferences and messaging methods, whatever form they may take. 6 Message Systems Marketing Channel and Engagement Benchmark Survey 7

5 1 The Power of Direct Marketing, October 2, The Direct Marketing Association. 2 The Global Deliverability Benchmark Report, 2H Return Path Remains ROI King; Net Marketing Set to Overtake DM, Says DMA. The Magill Report. October 4, ROI-King-Net-Marketing-Set-to-Overtake-DM/ Published by: Message Systems, Inc Guilford Road Columbia, Maryland (phone) x312 (toll free) (fax) messagesystems.com 2012 by Message Systems, Inc., all rights reserved. Methodology Notes Survey conducted by Message Systems and Atomic PR, September Online survey of 100 Message Systems customers and digital marketing professionals.