Drive Greater Marketing Impact By Leveraging Online Communities

Transcription

1 A Forrester Consulting Thought Leadership Paper Commissioned By SAP September 2016 Drive Greater Marketing Impact By Leveraging Online Communities

2 1 Marketers Struggle To Understand Customers And Provide Them With Relevant Content Technology has enabled customers to access endless amounts of information at the touch of a button. Marketers today must work harder than ever to gain and maintain the attention of customers, or risk losing business to the competition who can more readily meet those needs. As a result, companies are trying to better leverage customer data to help gain a richer understanding of their prospective customers. In this study, we found that marketers primary focus in leveraging customer data is to improve segmentation and targeting and help create more personalized offers. However, we also found that approximately 50% of companies are struggling to reach the right buyers and understand their customers. Why? Because they don t have the right data or don t know how to use it properly. Key challenges include (see Figure 1): Lack of information about new buyers prior to making a purchase. Inability to utilize customer data effectively. Inability to reach the right buyers. Inability to reach buyers in appropriate channels. CHALLENGES WITH PROVIDING THE RIGHT CONTENT Businesses routinely struggle to provide content and messaging that is relevant and useful to the recipient. When we asked businesses what types of content they considered to be most valuable in supporting online purchases, usergenerated content (including buyer ratings and reviews and Q&A discussion threads) topped the list. Businesses recognize the impact that peer-generated content can have in supporting purchase decisions by boosting customer confidence or providing answers to simple questions, yet user-generated content is what businesses have the hardest time connecting prospects to. When we asked businesses what types of content are the most challenging to connect to prospects, we found that Q&A threads and buyers ratings and reviews topped the list. Both were ranked as a top five challenge by 66% of respondents. The inability to provide the right content to prospects (at the right time) is detrimental to businesses. It ultimately means that prospects find the message irrelevant and end up going elsewhere to find the information they need and make their purchases. Our survey supports these findings, as nearly two-thirds of marketers reported that the greatest dropout of online prospects occurs during the product discovery, exploration, and buy phases of the buyer journey. These prepurchase phases are the critical moments for marketers to deliver relevant messages and content that will drive purchases, but failure to properly connect prospects with the content they need results in missed sales opportunities. FIGURE 1 Businesses Don t Have The Right Data To Support Key Marketing Priorities Where does your company place the greatest priority when it comes to leveraging customer data for marketing? Priorities for leveraging customer data for marketing Segmentation and targeting 77% ranked as a top three priority Creating personalized offers 63% ranked as a top three priority Primary challenges in supporting prospects online purchasing journeys Lack of information about new buyers prior to making a purchase Inability to utilize customer data effectively Inability to reach the right buyers Inability to reach buyers in appropriate channels 48% 45% 59% 55% 66% of companies see the highest prospect dropout during the prepurchase phases Base: 279 marketing and ecommerce professionals involved with online marketing strategies in NA, EMEA, APAC, and LATAM Source: A commissioned study conducted by Forrester Consulting on behalf of SAP, August 2016

3 2 CHALLENGES WITH MAKING BETTER USE OF DATA Companies are making efforts to increase the effectiveness of marketing by improving their ability to work with data and by gaining richer, more meaningful insights into customer preferences. Forty-six percent of companies surveyed are looking to leverage a greater variety of consumer data to include more about preferences and desires rather than just traditional demographics. As part of this, 47% are also encouraging greater post-purchase engagement with customers through communities and social channels as an avenue to better understand their customers (see Figure 2). FIGURE 2 Companies Are Trying To Improve Use Of Customer Data To Better Support Marketing In what ways is your company trying to increase the effectiveness of marketing to better support customers in their journey? (Select all that apply) Improving analytics capabilities to better leverage existing data streams Creating tighter integration between different data sources to get a more complete view of the customer Encouraging greater post-purchase engagement with customers through communities and social channels Leveraging a greater variety of customer data to include more about customers preferences and desires 47% 46% Base: 279 marketing and ecommerce professionals involved with online marketing strategies in NA, EMEA, APAC, and LATAM Source: A commissioned study conducted by Forrester Consulting on behalf of SAP, August % 50% Despite these increased efforts to better use data to support marketing, marketers are still seeing challenges with supporting online prospects to make purchase decisions. The challenges include: Inability to track and connect users across their purchase life cycle. Understanding where prospects are in their purchase journey and being able to guide them toward making a purchase is critical for marketing. It is impossible to optimize marketing efforts and support prospects without knowledge of where they are in their purchase journey. As well, as prospects move from one phase to the next, businesses need to facilitate that transition (i.e., from exploration to buy) in order to capitalize on the opportunity and reduce the risk of dropout. Lack of opportunity for buyers to engage directly with brands to answer questions. Marketers can use data to segment and create personalized content, but relying on that data can t replace the value of direct customer interactions. Both businesses and prospects can benefit from direct engagements. Businesses can gain more knowledge and data about their customers, along with an understanding of what product-specific questions or concerns they might have, and prospects receive the product information they need to feel more confident in their purchases. Lack of user-generated content to help with product exploration. Marketers can leverage data to create content that exactly matches the expressed needs of customers. However, as mentioned earlier, customers see greater value in user (peer)-generated content versus content created by the company trying to sell them something. Facilitating opportunities to create and access user-generated content is significant for driving greater marketing success. Marketers Are Not Capitalizing On The Value Of Online Communities Marketers believe that online communities can offer a viable solution to deal with the many challenges they face in having the right information about consumers, reaching them at the right time, and providing access to usergenerated content: Fifty-nine percent of companies believe that customers are using community-generated content when making purchases. Seventy-seven percent of marketers agree that community-generated content accelerates buying decisions. Seventy-one percent agree that individuals who utilize community-generated content are more likely to make a purchase those than those who don t.

4 3 Notwithstanding the identified advantages that communities offer, only 49% of companies are currently using branded online communities to interactively engage with customers and prospects online. The most common channels of engagement are branded social media pages and online videos, events, and contests. While each of those forms of engagement has its own merit, none yield the specific customer insights and data that businesses need for better segmentation, targeting, and personalization of marketing. The data that companies currently collect primarily comes from customer profiles, social media, individual questionnaires, etc., but only 40% collect data from online engagement platforms where they can get the deeper understanding of customer preferences, intent, and opinions (see Figure 3). Consequently, 39% of companies don t believe they are fully harnessing the potential of communitygenerated content in supporting prospects thought their purchase journey (both pre- and post-purchase). Marketers Aim To Improve Use and Awareness Of Communities To Drive Greater Engagement Businesses recognize the limitations they face with supporting prospects online. However, they also recognize the value that communities can play in supporting prospects on their buyer journey. We found businesses are prioritizing the following as they plan to improve online engagement with prospects to support better online purchasing experiences (see Figure 4): FIGURE 3 Companies Most Commonly Leverage Traditional Customer Demographic Data What methods/channels does your organization use to collect customer data? (Top five options shown) Customer database/profiles 65% Online engagement platforms/ tools (i.e., communities) Social media 57% Surveys/questionnaires 51% Loyalty programs 45% 40% Base: 279 marketing and ecommerce professionals involved with online marketing strategies in NA, EMEA, APAC, and LATAM Source: A commissioned study conducted by Forrester Consulting on behalf of SAP, August 2016 Increasing awareness of branded community and social channels. Many companies have communities, but far fewer are able to leverage them effectively. Increasing awareness of communities will help draw more prospects to those sites to look for support and information, which benefits both the consumer and the business. As awareness improves, 46% of companies are planning to increase activity on communities to stimulate a higher volume of buyer discussions. This will give FIGURE 4 Communities Play A Key Role In Improving Online Engagement What is your company doing, or looking to do, to improve online engagement with prospects to support them in their customer journeys (i.e., pre- and post-purchase)? Already doing this/in process of doing this Increase awareness of branded community and social channels Have tighter integration of content between communities, product catalogs, and commerce sites Invest in technology to better connect the exploration and purchasing phases of the buyer journey Enable easier filtering and searching of product-related content on community and commerce sites Deepen the level of engagement with your buyers via communities Increase activity on branded communities to stimulate a higher volume of buyer discussions Planning to do this 49% 41% 48% 42% 49% 39% 46% 39% 44% 42% 38% 46% Base: 279 marketing and ecommerce professionals involved with online marketing strategies in NA, EMEA, APAC, and LATAM Source: A commissioned study conducted by Forrester Consulting on behalf of SAP, August 2016

5 4 businesses a deeper understanding of their customers as well as facilitate the creation of more user-generated content to support new prospects in their purchase journey. Creating tighter integration of content between communities, marketing, product catalogs, and commerce sites. Once prospects or customers find a community site, they must be able to find the content they need. Businesses are striving to enable easier filtering and searching of product-related content on community and commerce sites. This helps ensure prospects have the information they need, regardless of their stage in the purchase journey. From a marketing perspective, leveraging customer information from the various sources can lead to improved segmentation, targeting, and personalization of marketing content. Investing in technology to better connect the exploration and buy phases of the buyer journey. Prospects spend a great deal of time looking for information prior to making a purchase, which can often involve jumping around between multiple websites, communities, and branded sites to find answers. By enabling the opportunity to seamlessly connect between the exploration and purchase phases, businesses can capitalize on prospects who are ready to make a purchase, rather than just serving up information only to have prospects make a purchase elsewhere. THE VALUE OF INCREASED BRANDED COMMUNITY ENGAGEMENT Communities provide a more in-depth level of content and engagement that isn t found with social media or short-lived promotional events. Discussion boards, Q&A sessions, and opportunities for open dialogue with prospects and customers yield a much richer understanding of what matters most to these customers. This information is priceless in building an effective marketing strategy. When we asked companies to what degree insight into their customers attitudes and opinions informs marketing efforts, 89% of companies said that customer data plays an important role in their marketing strategy and 51% said it plays a critical role. Companies recognize this interconnection between fostering improved community interactions and driving better customer engagement. As community content grows (much of it user-generated), it provides a great wealth of information to help prospects find the answers they need to make a purchase. This is why 87% of companies consider customer communities to be important for driving better customer engagements (see Figure 5). When asked about the specific benefits and opportunities that communities can provide, marketers identified the following top benefits: FIGURE 5 Communities Can Help Provide Customer Data To Help Shape Marketing Strategy To what degree does insight into your customers attitudes and opinions inform your marketing efforts? How important are online customer communities as they relate to driving better customer engagement? It is taken into consideration with other customer data 38% It plays a critical role in our overall marketing strategy 51% Important/ Very Important 87% Base: 279 marketing and ecommerce professionals involved with online marketing strategies in NA, EMEA, APAC, and LATAM Source: A commissioned study conducted by Forrester Consulting on behalf of SAP, August 2016

6 5 Gain a deeper understanding of customers to help craft more resonant marketing messages. Marketers can target the right people by using basic demographics such as age, gender, and income, but communities enable businesses to learn about customer preferences, perceptions, and attitudes. This can ultimately help drive more successful marketing by providing the right targeting and personalization of marketing messages. Create richer connections with customers through more continuous interactions. Communities offer the ability for more personal interactions with customers via tools such as live chat, discussion boards, and Q&As. These interactions are valuable for both prepurchase and post-purchase activities, as they bring customers to branded sites to find the answers they need to support purchases, or help guide product usage or troubleshooting after purchase. Leverage user-generated content to create more impactful marketing messages. User-generated content is a core benefit of communities for consumers, but savvy marketers can repurpose that content to support marketing campaigns. Customers trust and value peergenerated content, and by infusing it into marketing messages, it can add greater credibility. As the benefits of communities are realized, businesses gain a deeper understanding of consumers and can create richer online engagements and more relevant marketing messages. This will produce lasting benefits for businesses, with the top expected outcomes to be (see Figure 6): Driving longer-term loyalty with customers. A positive online purchase experience goes a long way in winning a customer s trust and loyalty. Consumers are more likely to return for answers to subsequent questions and/or to make purchases if they have positive experiences with quickly finding the information they need to make purchases and interacting with peers via communities. FIGURE 6 Businesses Anticipate Distinct Business Benefits By Making Marketing More Effective What are the key benefits you hope to achieve by creating more effective marketing content? Drive longer-term loyalty with customers Increase brand awareness 61% Increase revenue drive direct sales (i.e., reduce buyer dropout) Increase buyer satisfaction with brand Help buyers make smarter purchases Improve/simplify the buyer journey 22% 38% 53% 60% Base: 279 marketing and ecommerce professionals involved with online marketing strategies in NA, EMEA, APAC, and LATAM Source: A commissioned study conducted by Forrester Consulting on behalf of SAP, August % Increasing brand awareness. Consumers often don t know where to look or where to go when researching new products or purchases. Businesses that nurture their community sites into repositories of valuable content (both user- and brand-generated) are more likely to be discovered by prospects looking for answers. This creates positive recognition for the businesses, which can lead to greater online traffic and opportunities. Increasing revenue (i.e., reduce buyer dropout). One of the key values of a strong online community is the ability to give customers and prospects the support needed to make smart purchase decisions. Leveraging community data to help target the right people at the right moments in their journey will drive greater conversions by reducing online dropout currently caused by the inability to fully grasp and meet customer needs.

7 6 Key Recommendations Marketers need a deeper understanding of their customers and prospects in order to achieve greater marketing success and improve online customer experiences. Online communities are one specific way businesses can better understand and support current and new customers. However, just having an online community is not sufficient to accomplish this goal. To fully realize the value that online communities can offer, marketing teams must first: Understand what data your business needs to support your marketing goals and align your services to capture that data. A solid understanding of customers needs, opinions, and preferences is vital for successful marketing. Broad segmentation of prospective customers does not enable the level of personalization or customization that tech-savvy customers now demand. Ensure you have the right data to guide your marketing efforts to reach the right prospects, and provide them with the information needed to make a successful purchase. Leverage communities to capture greater customer insight and drive user-generated content creation. Community interactions, such as discussion boards or Q&A threads, offer a deeper glimpse into customers needs, challenges they face, or even the things they are most excited about. Businesses can capture this data to improve targeting, personalization, and overall customer purchase satisfaction. Communities also provide user-generated content for other customers to read and respond to, which can be highly influential in driving purchase decisions. That same user-generated content can also be captured and leveraged across broader marketing campaigns. Make communities more than just a single stop in the buyer journey. Communities are not just a resource for providing customers answers they need to make a purchase. Instead, communities offer ongoing opportunities for customers to engage with other customers or for your brand to share stories, troubleshoot challenges, and explore new products. They can be leveraged as a marketing tool across the customer journey, from product exploration to product usage. Businesses that leverage communities in this way will find they improve brand awareness, build customer loyalty (driving repeat purchases), and enable more effective marketing through the use of user-generated content. This is a win-win, as it provides advantages for customers by enhancing online experiences and better enabling purchases, and helps businesses by reducing online dropout by improving dialogue with their customers. Methodology In this study, Forrester conducted an online survey of 279 marketing and ecommerce professionals involved with online marketing strategies in the US, the UK, Germany, China, India, Brazil, and Mexico. The survey evaluated how their companies are leveraging communities to support online marketing efforts, both pre- and post-purchase. Respondents were offered small incentives as a thank you for time spent on the survey. The study began in July 2016 and was completed in August Project Director: Chris Taylor, Market Impact Consultant Contributing Research: Forrester s Infrastructure and Operations Professionals research group About Forrester Consulting Forrester Consulting provides independent and objective research-based consulting to help leaders succeed in their organizations. Ranging in scope from a short strategy session to custom projects, Forrester s Consulting services connect you directly with research analysts who apply expert insight to your specific business challenges. For more information, visit forrester.com/consulting. 2016, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. For additional information, go to [1-ZVTFL3]