marketing s untapped potential
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1 A Bienalto Whitepaper marketing s untapped potential September marketing s untapped potential 1
2 Introduction marketing is firmly entrenched in the marketing lexicon. It is a proven method to reach out to diverse audiences and it delivers excellent results for those organisations that get it right. Yet, for many organisations, marketing remains a case of untapped potential. Despite technology moving on significantly in the past 10 years, many marketing strategies remain stuck in a rut hampered by operating models that have not evolved to keep pace. Particularly in industries like retail, where merchants lead the way and everyone else plays catch-up, there s no time nor the resources to shift gear and move into a responsive, agile approach to marketing. The majority of marketers are stuck with either legacy programs or stand-alone programs neither of which truly engage with the customer or deliver optimum business value. Marketers are on the hamster s wheel and can t get off it. In this reactive environment, how will they extract true value from marketing? This is despite the fact that studies show that tactics like personalisation deliver up to six times more revenue per than non-personalised campaigns. There is huge dollar value to be gained from a good marketing program and it can be simple to calculate exactly what that value is. Once this calculation is made, the case for investment in an integrated marketing program becomes much clearer info@bienalto.com
3 Three tiers of marketing Organisations in Australia typically fall into one of three categories in terms of their level of sophistication with marketing: Legacy Programs Standalone Programs Integrated Programs Customer profiling None Basic Advanced Level of personalisation None Basic Advanced Customer engagement Low Low or moderate High List growth None Minimal Ongoing metrics e.g. open rates, click through rates Poor Average Strong Level of automation Low Low High Testing & optimisation None Minimal Ongoing Frequency of strategic view Never Rare, if ever Periodic Integration with other systems Unintegrated Unintegrated Integrated Insights gained None Few Many Visibility within business None Minimal High Knowledge of program impact None None Advanced marketing s untapped potential 2
4 1. Legacy Programs Many marketers still find themselves mechanically operating out-dated legacy programs. They know nothing about their, their list is not growing and response rates are low (typically, open rates of less than 20%). The s themselves are no better than printed flyers. programs in this category have not been strategically reviewed for many years. They have a low profile within the business or none at all and there is no knowledge about the impact of the program on the business. In short, if the s were not sent, nobody would really notice. 2. Stand-alone programs The majority of marketers have a stand-alone marketing program in place. These programs have captured basic customer profiling such as first name, gender and location and personalised s are sent accordingly. However, much customer profiling is still missing, and there is limited or no consideration of the customer s stage in the lifecycle. s are pushed to recipients in a one-to-many format with no opportunity for meaningful dialogue. The list size remains static, with the possibility of slight growth. The process of sending the s typically involves manual handling. No effort has been made to test and optimise frequency, timing or content; and while the templates themselves are probably refreshed, the strategy is not. 3. Integrated Programs Marketers should be striving towards integrated programs. These programs are integrated with other systems such as content, website analytics, customer data and transactional data and as a result have the ability to serve highly personalised offers and next best actions to each individual customer. Not only that, but the program itself has layers, including: Lifecycle s detecting and responding to the customer s stage in the lifecycle, that is, the customer s current relationship with the business Service s transactional s (often sidelined, these should be well considered and properly integrated) Engagement s those that promote a conversation Triggered s sent as required in response to particular actions by the customer All of these s form part of a single, integrated program that is periodically reviewed and refined. The result is a well-informed, engaged customer; and a business that knows the value of the program. The organisations that have made it into this tier have invested time and money into building capabilities so that most personalisation is automated. In the retail space, this automation means that marketers still have the agility to respond to merchants incessant demands for pushing out content but can do so in a far more meaningful and effective way. Perhaps the biggest omission of these programs is the fact that they operate in isolation. They are not integrated with other systems and insights are lost. Furthermore, the business as a whole is probably aware that the program exists, but its impact is unknown info@bienalto.com
5 Stuck with legacy or standalone programs So why are so many organisations stuck with legacy or standalone programs when it comes to marketing? In many cases, it comes down to a lack of the right information, content and systems. The marketing program operates in isolation as the back-end systems are not linked. You can t change all four tyres at once when you re driving on a freeway. Often, every person is working as hard as they can to simply keep up with daily demands then there is no opportunity for review or change. And because of this, organisations get stuck. Yet an investment in change will pay off. marketing when done well is proven to increase revenue as well as boosting customer loyalty. monetisation Metrics are important for any marketing program and marketing is no different. For senior managers to sit up and take notice, the way forward is to monetise the program. All businesses can put a value on their program by using a simple formula; Current value of the program = k (x - y) total subscriber non subscriber Potential value of the program = (k + (l - k) m) (x - y) z total total overall total % of that can be targetted to join program subscriber non subscriber % potential increase in value of program customer marketing s untapped potential 4
6 Customer insights can enable predictability of sales and the ability to drive revenue Just think about it. If you really knew your members, you d be able to predict their behavior in any given situation and as a result create revenue on demand. If you know X% of your revenue comes from Y% of your database, as well as individual members propensity to respond to particular communications and offers, then you can predict how much revenue will result from member marketing activities. This means you have much more control and considerably less risk. It becomes a simple input, output equation with very little wastage along the way. Furthermore, you know which members you can target for growth and which members you need to retain. The questions about who to reward and who to incentivise become simple. In conclusion Consistently, marketing delivers high levels of customer engagement in the form of open and click through rates. Yet, to achieve engagement that delivers an actual increase in revenue, marketers need to shift gear and invest in integrated marketing programs. In doing so, not only will they be able to nail the context of that is, to send the right message at the right time and to the right place but they will discover how can form part of a much wider, data-rich environment for engaging with. An investment in change is worth it. In industries like retail, where there is competition for the consumer dollar, there is vast potential to get an edge with marketing and reap the rewards. About Bienalto Bienalto is a specialist marketing consultancy with offices in Sydney and Melbourne that enables its clients to realise the full potential of online marketing and website performance. Bienalto provides web analytics, customer experience and online marketing programs to some of Australia s leading businesses. Acknowledgements Bienalto would like to thank Sean Hanneberry at Threefold and David Carlson at Wunderman for their contributions to this whitepaper info@bienalto.com
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