The Fundamentals of B2C Marketing Automation for Effective Marketing Communications

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1 The Fundamentals of B2C Marketing Automation for Effective Marketing Communications Mark Patron February and Website Optimisation

2 Introduction Marketing automation is a process that uses insight devised through data collection to nurture customers via the set-up of automated campaigns. By using data analysis the automated campaigns produced through marketing automation are extremely targeted and highly relevant to each individual consumer. This can give a complete experience between the brand and the customer. The outcome for any marketer considering this highly targeted level of communication is a high return on investment. Originally used for B2B marketing, marketing automation incorporates technology to automatically manage and measure marketing activity. When used for B2B purposes the idea is to nurture a prospect through to the sale. Automated campaigns are set up based on where a user is in the sales cycle, supporting the sales team and making the sales journey more efficient. For the B2C marketer the buying process is often very different; the buying cycle from prospect to buyer may be shorter, however it may be more complex with many more channels involved. For the B2C marketer, marketing automation is an integral component of CRM. In short, marketing automation is to the digital marketer what CRM is to the offline marketer. Like CRM, marketing automation can be used to: Increase the effectiveness of marketing activity through relevant marketing communications. Provide better management of marketing programmes. Effectively measure the impact of marketing on sales. The difference however, is unlike traditional offline CRM programmes, marketing automation can provide automated actions in real time. The most obvious of these being the implementation of event triggered marketing campaigns such as basket abandonment. Over the past 10 years marketing has come to the forefront of digital marketing. Most marketers now understand that using data to improve the relevancy of communications can improve deliverability and reputation, as well as increase engagement and improve the chances of the resulting in a sale. Fig. 1 (page 2) shows how and other marketing communication channels have developed over time. Marketing automation takes this strategy of relevance and targeting one step further. By feeding all customer activity into one integrated database, effective strategies can be devised to help marketers understand how they should be targeting their users, and then provides the ability to automatically set up campaigns, saving companies both time and money. Over the past couple of years digital marketers have started to talk about how to use different types of segmentation (e.g. behavioural, RFM, channel segmentation) to produce highly targeted marketing communications. However, though most marketers understand the theory, putting it into practice isn t quite so easy. This is where marketing automation comes in. Marketing automation makes it possible. It provides a real solution to ensure you are effectively targeting the right people, with the right message, at the right time and through the right channel. This white paper takes you through exactly how marketing automation works and how it can be used to improve your marketing communications. Part 1: How marketing automation works The database Marketing automation enables marketers to optimise marketing activity by holding all customer data in one place. Using this, marketers can effectively assess the patterns and correlations leading to a sale and therefore build the correct strategies to effectively target and nurture users. pg 1

3 Fig.1: A diagram to show the evolution of marketing communications. Marketing Automation ROI Marketing Database Target best customers RFM data Direct mail CRM Direct mail targeting Lifestyle data Phone Digital Marketing Multichannel campaign management Transactional data Website Personalisation Event triggered Behavioural data Mobile Social 1980 s 1990 s 2000 s 2010 s Many marketers think they can begin marketing automation by integrating digital data into an existing CRM database. Unfortunately it s not that simple due to the nature of online data. Offline data is based on household name and address, whereas online data is based around address and cookie data. Offline data works well with just a daily update, online data is more real-time. Likewise, just using an marketing database or a web analytics database will not suffice. A marketing automation database must be able to integrate both web analytics data and data into one place in order for it to be effectively analysed and segmented. Fig. 2 shows how a marketing automation database should work, integrating a range of data. Data collection and segmentation A single customer view database enables better targeting and complex segmentation to generate relevant customer communications. By integrating web analytics and data you will be collecting a large amount of transactional, preference and behavioural data. Of these behavioural is normally the most predictive because it is typically the most recent and often the most relevant. (The fact that a consumer looked at a product page means that they have put up their hand and expressed interest in that content.) Customer engagement data will also be a key element of your marketing automation database. Effective nurturing is as much about relevancy of timing as it is about the relevancy of content. By segmenting data by how engaged a user is you can control the frequency of communications the user receives. Too little communication may result in you losing a sale; too much communication may result in you losing a customer for good. Marketing automation will not only allow you to accurately assess how engaged your users are, but also help you set up rules to ensure any communication you send is received at the most opportune time. Lastly, by segmenting customers by channel, you can open the door to full multichannel campaigns. Well integrated marketing communications across different channels will improve your campaign pg 2

4 Fig. 2: An example of a marketing automation database. INPUTS OUTPUTS Website behaviour activity DM activity Call centre Transactional Offline database Campaign data Social media Surveys MVT Marketing Automation Database 1-500m site visits per month variables to choose from Database updated hourly Example variables Transactional: sales, registrations, accessories Demographic: gender, DOB, family Engagement: sent, bounce, open, click Behavioural: products viewed, preferred categories, reviews, linked products, preferences, insurance Campaign: search phrase, source site Mobile Call centre results as different value customers can be serviced by the most appropriate channel for their wants and needs. In addition integrated marketing campaigns work better, for example, TV support for a direct mail campaign when timed properly can generate a better response. The number of different multichannel campaign combinations can quickly become unmanageable; campaign management software can be useful here. Campaign management software enables complex processes to be managed relatively easily. You can then quickly and efficiently implement hundreds of automated campaigns, based on complex business rules. Customer insight and user journeys Effective analytics is the key to unlocking the door to profitable marketing communications. Actionable analysis will help you determine the right customer segments and patterns in your customer data. Utilising this information will give you the insight you need to set up the right campaigns to target the right consumers. The first step in developing a wholesome marketing automation process is to map your customers journeys. Customer journey analysis looks at how your prospective and existing customers arrive at your site, move around it and make purchases. As sellers we can sometimes be too focused on the sales funnel and forget buyers do not necessarily behave in a linear manner. Customer journey analysis should consider all the primary goals (for example registration, signing up for a newsletter or browsing products). The better you understand your customer journeys the better you can lead or pull your users through your site rather than trying to push them. Warm inbound marketing works better than cold outbound marketing. The fact is, if you have a database of over 100,000 users there is no way you can communicate with each of them individually. Not manually anyway. However, by producing the segments based on online user activity, you can predict how likely someone is to buy and what it is they are likely to buy and set up automated communications to support this. Most databases will include open and click data. A key difference between marketing and marketing automation is the addition of web analytics data. So with marketing automation you pg 3

5 Fig.3: A diagram to show how different types of s can be used to target users based on where they are in the customer lifecycle. Stage 1 Acquire Stage 2 Convert Stage 3 Develop Stage 4 Retain Stage 5 Reactive Welcome Abandoned Cross-Sell Loyalty Reactivation Browser Nursery Profile Driven Offers will be able to recognise when the consumer first visited the website, which web pages the consumer visits and even what search terms brought the consumer originally to your website. (Did the consumer find your website using low cost search terms or brand based search terms?) Once you know this information the message you send will be much more targeted. Notice we re talking about integrating lots of web analytics data not just a few extracts. Part 2: Using marketing automation for targeted communication Targeted programmes Once you are clear about your user journeys you can effectively plan out what marketing campaigns will be relevant to your users based on where the user is in the buying cycle. Use the customer lifecycle model (see Fig. 3) to map out what types of programmes you need to be creating based on your customer journeys. Most programmes in the customer lifecycle can be set up to run automatically. With a large database, programmes can start to evolve very quickly. (See Fig. 4, page 5.) Without marketing automation, producing this large amount of programmes is next to impossible. It is hard to predict exactly how your marketing automation processes will develop. So it is best to have a good idea of what processes will yield the greatest return rather than try to get everything going all at once. Start with the low hanging fruit such as basket abandonment s for quick returns that can justify future investment. frequency Engagement segmentation will help you identify where your customers are in the buying cycle. At the most basic level you will have three clear segments as described in Fig. 5 (page 6). Using marketing automation, you can dictate how much communication is sent to a user, based on their own engagement. (See Fig. 6, page 6.) As prospects evolve they will change segments, and with this the frequency of s they receive will need to change to suit the latest level of engagement. pg 4

6 Fig. 4: A diagram to show how programmes can evolve through marketing automation Visit Store Visit Site Click on an in the last 2 days but have not added to basket Sign-up / Registered Abandon Multi Stage Drop out Category Conversion On-site Actions Store Welcome 1 Store Welcome 2 Store Welcome 3 Welcome 1 Welcome 2 Welcome 3 Web Welcome 1 Web Welcome 2 Web Welcome 3 Account Activation Account Activation Follow up Account Reactivation Activation Confirm Abandon 1 Abandon 2 Abandon 3 Items Reminder Deleted in X Days Deleted Drop Off On Data Capture Registration Drop Off Step by Step Drop off Registration / Microsite Preferences Users Behaviour Site Content Groups Event Reminder Boucher Request Password Reminder Refer A Friend Store Welcome 4 Welcome 4 Web Welcome 4 Upsell Start Shopping Drop Off Before Save Wish list Voucher Code Online/Offline Crossover Registered Not Purchased Cross-Sell Search Abandon Saved Voucher Reminder /Site Inactivity Cross Channel Activation Registered Not Purchased Follow up Anniversary of Abandon Checkout Abandonment Iphone App Reactivation 1 Drop Off Before Purchase Confirmation 404 Error Reactivation 2 Enquiry Reactivation 3 Purchased Shared Social pg 5

7 Dynamic content Many marketers are already integrating dynamic content into their marketing campaigns. Dynamic content is the corporation of relevant information, text or images customised to the indiviual. Marketing automation provides marketers with the ability to incorporate dynamic content on the fly, changing what was targeted communication into highly personalised communication. Fig. 7 (page 7) provides an example of how this works. Testing Testing is key to improving results. The two most common approaches are A/B and multivariate testing (MVT). According to MarketingSherpa research (see Fig. 8, page 7) the things that are tested most often are not always the most effective things to test. The main reason for this mismatch is it is much easier to test an subject line than (for example) the target audience, even though testing different target audiences will be more effective. Marketing automation helps to rectify this imbalance by making it easier to test the things that are more likely to make a difference. Fig. 5: A diagram to show different segments can be created based on engagement. Nicola Emily James Hot Prospect Has purchased more than once. Engages with your brand often (through and website). Engaged with your brand recently (in the last 7 days). Warm Prospect Has purchased once. Engaged with your brand in the last month via the website. Cold Prospect Has never made a purchase. Little interaction with brand (website or ). Fig. 6: A diagram to show how individual users can be targeted by different levels of frequency. Nicola Hot Prospect Now 3 months Emily Warm Prospect James Cold Prospect pg 6

8 Fig. 7: An example of how dynamic content can be automatically generated for using marketing automation. Sophie enters a travel website using the search term cheap deals. Marketing automation software matches Sophie s cookie to who previously searched for holidays to Menorca. Sophie leaves the website. On the website Sophie searches for holidays to Spain. Marketing automation software sends an to Sophie. Holidays in Spain Hi Sophie, We noticed you were looking for cheap deals to Spain and thought these packages might be of interest to you 2 bed, 7 nights, Fig. 8: A graph to show the usage and effectiveness of testing. Source: MarketingSherpa Benchmark Report, pg 7

9 Conclusion The future of digital marketing is relevant communications. Right offer, right person, right time and right channel. Relevance is achieved by better segmentation and targeting, plus personalisation using behavioural data. All this can be achieved through marketing automation. Many of the elements that make up marketing automation are already being implemented by some online marketers, however unless a true marketing automation platform is being used, the immense amount of data in different data siloes will cause marketers difficulties. Like any data driven solution, the numbers are only ever as good as the people analysing them. Once you ve got the right database and you re collecting the right data, you re still only half way there. How you analyse, segment and use this data to produce highly targeted, automated communications is what will double your revenue and grow your business. Any supplier you work with should be able to help with not just training of how to use their software but also give solid advice, at least quarterly, on how to use marketing automation to maximise your ROI. Also take up references with potential suppliers for your industry and check their speed of deployment which can vary quite dramatically. Remember with marketing automation time is money. Digital marketing is evolving at a great speed. With ISPs like Hotmail now filtering s based on customer engagement, theories surrounding the importance of relevancy and engagement are no longer good advice but fact. There are hundreds of ways you can segment users in order to improve the relevancy of your marketing communications. Maintaining all this data can be a challenge. Doing it manually is next to impossible. Marketing automation provides a way to effectively manage your data and use it to provide better customer communications. Marketing automation is all about nurturing your customers, based on their own wants and needs. While it is not a magic bullet solution to all marketing problems, if implemented well with the right technology partner, it should at least double the revenues you see from your traditional marketing. To find out more about marketing automation contact RedEye on or Visit pg 8

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