A guide to marketing agility. Adapting your marketing in response to changes in customer behaviour
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1 A guide to marketing agility Adapting your marketing in response to changes in customer behaviour March 2010
2 An Experian definition of agile marketing Agile marketing is the ability to adapt or refocus marketing effort quickly and successfully in response to changes in customer behaviour, market conditions and business direction to benefit market share or share of wallet. It sounds simple, yet the means of achieving this agility are more complex. Why Marketing Agility is important dispelling the myth of recovery marketing The punditry, prognostication, and general malaise that this bad-news-bear economy has brought with it has led many to focus on the past and cling to tired, panic-stricken, reactive marketing that does little to actually solve the problems that brands and their consumers are currently facing, Jamie Shuttleworth, EVP, Chief Strategic Planning Director at Draftfcb Chicago There s been much talk of how marketing should respond to the first signs of economic recovery over recent months. The upturn, when it comes, will be a huge opportunity for marketers to stop being reactive and proactively plan marketing activity. But, doesn t this miss the point a little? Whether we re in recession or recovery is not the issue. Good marketing practice and techniques have business value no matter the economic climate. Isn t the factor that sets one organisation apart from another really how agile its marketing is pinpointing and responding quickly to changes in consumer trends and customer behaviour? And consumers haven t all responded to the recession in the same way. While some may have tightened their purse strings over the past 18 months, others have continued to spend and changed their habits very little. Others, given the low interest rates feeding through to mortgages, may have even felt better off. The important thing is that there is no universal truth when it comes to how customers and prospects behave. That means there isn t a formula marketers can follow for success but having an agile approach to marketing makes pinpointing and responding to these changes easier. 2 A guide to marketing agility
3 Five steps to gaining marketing agility True marketing agility is predicated on the following requirements: 1. Joining up customer insight, product and channel 2. Having a single customer view 3. Combining customer insight with the ability to action this insight Underplay one of these elements and the speed and success of response that characterises marketing agility will be diminished. In addition there are two further components that contribute to agile marketing, namely: 4. Automating elements of the marketing process 5. Getting customer insight onto the boardroom agenda 1. Join up customer insight, product and channel Agility means being able to make a change quickly and in the marketing sphere this can often come down to the speed at which approval can be gained to adapt a campaign focus or launch a new offer. A siloed structure with little overlap between the key disciplines within insight, product and channel is a major inhibitor to a rapid response. Agile marketing organisations understand where the beneficial overlaps in their business are and maximise these to be able to move quickly. How to...join up Marketing consultants can analyse your ability to be agile in terms of a joined up structure to offer best practice advice. Joining up may not mean changes to your organisation s structure, for example Marketing Resource Management (MRM) systems can quickly identify which channels, products and decision makers need to be involved in a campaign and at what stage, creating step-bystep activity plans and sign off programmes. 2. Create a single customer view (SCV) Obtaining a single view of your customers is a vital step in becoming agile. This can be achieved by creating a marketing database in which you store all customer information- from marketing communications to transaction history. Having one consolidated record at potentially multiple data levels means that a customer record might link to hundreds of events, multiple addresses and multiple products. Organisations need to be able to identify individual customers, understand their history, highlight service issues, calculate propensity to buy new goods and services and map and track response to key events and trigger offers. This can only happen with a single customer view, when all data about a customer is integrated and presented ready for use as a single record preferably without the need for complicated table joins. The benefits of an SCV are obvious: Improved knowledge of customer behaviours to enhance experience, relationships, retention and cross sell strategies and activities Valuable customer insight across all channels, locations and addresses to make better customer management decisions Better analytics to drive decision making and relevant customer interactions A guide to marketing agility 3
4 How to...achieve a single customer view It s not an easy task and there are various approaches to delivering a single customer view, but it s one that s well worth pursuing. A first critical step is to use a software tool to cleanse and standardise address data to the highest possible standard. The next stage is to apply a unique person ID to create a consistent identifier of the individual regardless of address moves. The next stage usually involves bringing in a team of data migration, integration and analytical experts to help plan and execute the SCV database. Typically this will involve manipulation, summary and aggregation of data from operational system feeds, third party vendors, suppliers, partners and affiliates to provide a better overall view and understanding of your customers behaviour in either a hosted On-Premise (client-site) or On-Demand (hosted by the supplier) database. 3. Get customer insight - and make it work Insight into customers previous purchase habits, channel interactions, geodemographic data, lifestyle preferences, modelled propensities and so on - enables organisations to create targeted campaigns that deliver real results, whilst improving the efficiency of your marketing spend. Customer location is a valuable factor in gaining this insight, although it is often overlooked. Being able to target customers and prospects more precisely in the areas they live and work and analyse this in relation to the location of retail outlets and footfall, as well as the geographical distribution of traffic to your website can help you allocate your marketing resources more efficiently, improve response and maximise ROI. How to...make insight live and work in your organisation Having customer insight is great, but it s how you understand it and use it to feedback and inform future marketing that s pivotal in attaining marketing agility. Set piece analyses, such as looking at customer churn or segmenting your customer base are, of course, essential, but by combining this with day-to-day customer insight, organisations can really start to drill down to look at what happened with previous activity, how successful a campaign was by channel preference, how agents are performing relative to each other, the success or failure of promotional efforts, the performance of new product launches and store layouts, the tenure of customers, their likely headroom to spend more with you and their lifestyle choices. Integrating this insight with actionable off-the-shelf, consumer classifications such as Mosaic helps you understand the relationship between spending habits, lifestyles, channel preferences and locations. Embedding this segmentation and the insight it provides into your operational CRM systems enables you to respond quickly to changes in consumer behaviour. Linking tools such as Mosaic geodemographics to economic forecasts of consumer spending helps you to understand your exposure to changes in the economic climate, identify opportunities and risks across your customer base to future-proof your organisation, through better, more accurate and timely forecasting of customer behaviour. Marketing analysts can be invaluable in helping to turn insight into actionable strategy that can be used to drive and shape marketing activity. To maximise the value of your insight you must have a clearly defined set of objectives and process for implementation. 4 A guide to marketing agility
5 Take the case of needs-based segmentation, which can be a great tool for marketers to understand the varied motivations and usage habits of a typical customer base. Undertaking such a piece of work without understanding the overall business objectives, gaining high level buy in, and having a clear path for on-going usage (for customer retention as well as business development) can make the work redundant before it has begun. Once a clear business objective has been defined, and the implementation process agreed (with everyone from IT teams through to management) developing the insight is only the beginning of the process. Once created the next step is to incorporate this insight back into your customer database (as well as integrate into other applications, such as your contact centre). You must also invest in educating the business on the best way leverage this knowledge to maximise its impact. You should also consider how you intend to maintain your understanding of customers so that it evolves and keeps pace with changes in your business and remains contemporary to the needs of your customers. It really is a case of understand, build, implement, develop and evolve. Essentially, by planning the insight based on business need, and understanding how the analysis needs to be actioned, the agile business can operationalise insight and drive huge value from the investment. Finally, capturing insight into how your customers interact with you and your competitors online has also become crucial as more purchasing activity moves online and new business models emerge where visits, traffic and interaction drive advertising rewards and success on different axes. Key questions organisations need to answer include: What is the share of time spent on my site as opposed to my competitors? What search terms work best to drive traffic to my site? What levels of sentiment for my brand exist on line, and how is this changing following a recent campaign? How can I influence the opinions of my brand being expressed on social networks? What is the potential value of each of my customers social networks to my business and how can I reach those that have the most influence? How do I maximise the value of any data I hold describing depth of any relationship, sentiments/attitudes expressed, geo-demographic circumstances, and current interactions/browsing behaviour to deliver relevant targeted messaging and advertising either on my site or on other publishers sites? A guide to marketing agility 5
6 4. Move towards marketing automation Marketing Automation is a subset of customer relationship management (CRM) that focuses on the definition, scheduling, segmentation and tracking of marketing campaigns. The use of marketing automation makes processes that would otherwise have been performed manually much more efficient and makes new processes possible. Definition from Marketing Automation Times Marketing automation is the move towards less resource intensive, trigger and event-driven marketing. It has a key role to play in marketing agility and requires an organisational culture to be comfortable setting triggers and business rules for marketing activity, defining what will happen at a certain trigger or event and then allowing that course of action to happen without further intervention. Marketing automation technologies can significantly increase the speed at which companies can react to changing customer habits and profiles, helping to ensure that customer communications achieve consistent relevance around both message and moment. Traditional marketing has involved processes which are batch based, push campaigns which typically involve two key events the receipt of the message / ad and response / non-response. Real-time marketing developments now enable more sophisticated scenarios allowing data intelligence to interact across multiple channels to direct interactions with customers, thereby creating many events which can be measured. It s a trend that is gaining momentum in the multi-channel and digital space in particular. The more complex the environment, the more marketing automation has a role to play it allows marketers to let go of the operational side of marketing and focus more on creative elements. A simple example, association modelling in the web environment the familiar people who bought this also bought this - is well practised at its basic level by the likes of Amazon, ASOS and now even M&S and is part of marketing automation. It s the ability to look across the web, a call centre environment or stores and see purchase patterns and then flag these up to allow certain events, such as special offers to be flagged also. Telcos, media and financial services organisations were the early adopters of marketing automation. Telcos, in particular, have both the transaction history of customers and have the channel too mobile to enable them to be pioneers in the automated marketing space. How to automate your marketing Marketing automation requires a new way of managing data assets. Firstly, it requires the ability to automate modelling processes to predict events (good and bad). No longer is it appropriate to hand craft models in the traditional way. Secondly, optimisation technology is crucial to enable decision engines to make the best customer offer / channel to maximise organisation goals within the constraints they operate (e.g. capacity of call centres, budget available, number of offers and products). Thirdly, organisations need target, test, and measure technology to enable potentially thousands of executions within the offer / channel to be tested across on-line channels, identifying best performing ad-executions for particular customer groups. Finally, marketing automation requires a capability to deliver real-time performance, often taking advantage of in-session behaviours on web sites, mobiles, and mid-call interactions within call centres. 6 A guide to marketing agility
7 5. Get customer insight onto the boardroom agenda Customer insight and segmentation is too often viewed as the thing that marketing do to decide which offer or communication to send to each contact. Whilst this is certainly an important output of customer insight, this information should form the crux of all decisions that are made by an organisation. What your customers are doing is a far more relevant barometer of the financial climate, than what the economists and media tell us. Having this insight will mean marketing budgets will be truly aligned to the opportunity your business has to react to whatever the financial climate. Being able to get this insight in the board s agenda will allow marketers to gain approval and sign off more quickly, get more buy-in to initiatives, and result in fewer hoops to jump through. How to.get customer insight onto the boardroom agenda In this world of data-driven marketing it is getting easier to get insight onto the boardroom agenda. Data is losing its nerdy tag and is becoming a recognised area of expertise within many organisations. Key considerations when generating and presenting insight: Make your insight accessible and easy-to-digest for the audience, often less-ismore and the first step to getting acceptance of your learning is to make it easy to understand Ensure your insight is actionable. It is all too easy these days to drown in a plethora of information about customers. The most dynamic and influential businesses make their insight actionable, they embed it within their operational systems to improve customer experience, enhance brand reputation, and respond dynamically to changes in customer behaviour Focus on the afters. What does this mean for the organisation, and how can we improve performance and measure this improvement to demonstrate the impact of this knowledge on revenues and margins? Understand the consequences of not acting. Part of making the case for ongoing analysis of customer behaviour is understanding the impact of not monitoring this behaviour on a regular basis Conclusion Marketing agility is about being fast, responsive and flexible in your approach to marketing. It s also in large part about putting customers at the heart of your business and responding to their changing needs and behaviours. Joining up, developing a single customer view, gaining customer insight (and actioning it), automating marketing processes and getting the business to buy into the value of increased customer insight are all ways of achieving this. Yet, while there are clear steps, as we ve outlined here, in the drive to achieve marketing agility, it s as much about a mind-set, as it is a checklist of marketing approaches. To that end achieving marketing agility is something that successful organisations constantly strive towards. It s a long journey, but one that is well worth the undertaking, with plentiful rewards along the way for your business. About Experian Experian is the leading global information services company, providing data and analytical tools to clients in more than 65 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft. Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2009 was $3.9 billion. Experian employs approximately 15,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; Costa Mesa, California; and São Paulo, Brazil. For more information please visit: A guide to marketing agility 7
8 Cardinal Place 80 Victoria Street London SW1E 5JL T 44 (0) F 44 (0) Experian The word EXPERIAN and the graphical device are trade marks of Experian and/or its associated companies and may be registered in the EU, USA and other countries. The graphical device is a registered Community design in the EU. All rights reserved.
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