Transform Customer Interactions

Special Section: Digital Marketing

Special Section: Digital Marketing

Transform Customer Interactions

New channels of business-focused data help organizations attract, engage and retain customers.

Every day, more consumers are turning to social, mobile and interactive shopping technologies. Businesses, in response, are ditching some traditional advertising channels in favor of digital marketing opportunities. This rapid transition to the digital world is enabling the discovery of new and innovative ways of understanding and improving customer interactions.

The macro-marketing environment has fundamentally changed—and is still evolving—to accommodate new touchpoints, an emerging breed of sophisticated consumers, and highly coordinated multichannel customer experiences. The number of businesses updating their marketing programs and boosting their budgets to accommodate this digital reality is rising rapidly. In fact, in its August 2011 “US Interactive Marketing Forecast, 2011 To 2016” report, Forrester Research, Inc., predicts that by 2016, interactive marketing budgets will grow to $76 billion.

Customer Advocate

The value proposition for digital marketing optimization (DMO) and attribution functionality is driving market momentum. Companies shifting to DMO solutions have become advocates.

“It is well-recognized that Barnes & Noble has made a profound transformation from being a physical seller of books to a digital technology company. A key component of that is the ability we have gained to leverage ‘big data’ to derive consumer insights that are deployed multi-channel,” says Marc Parrish, vice president of Retention and Loyalty Marketing, Barnes & Noble. “Our customers benefit from our ability to personalize their interactions. We know them, and it shows.”

Challenge Meets Opportunity

As digital interaction with customers becomes more common, targeted marketing strategies increase in complexity, which, in turn, places greater importance on driving marketing decisions with solid, business-focused data. The good news is that digital channels provide a wealth of detailed data points, including display ad interactions, search results, website behavior, email activities, blogs and social media text. The bad news is that traditional marketing and analytic platforms struggle to process and analyze this type of unstructured data.

In response, a new family of optimized analytics platforms is specifically designed to address the scope and size of data-driven customer intelligence. These digital marketing optimization (DMO) platforms allow marketers to explore, discover, test and iterate information to keep up with today’s multi-device, always-connected consumer while staying compliant with security and privacy regulations.

“A lot of the traditional strategy tools are not efficient any longer,” says Jeff Tanner, a professor of marketing and associate dean at Baylor University’s Hankamer School of Business. “Businesses need dynamic customer strategy tools that are able to take advantage of data-driven digital marketing.”

These next-generation analytics tools, working in lockstep with new and deeper marketing channels, are creating an almost endless series of fresh customer analysis opportunities. That’s great news; uncovering the most productive marketing spend across new channels requires adopting a multi-channel marketing approach that aligns with the highly interactive customer journey, which on average crosses five to 10 touchpoints.

“The impact of digital marketing on marketing in general is the exponential increase in the number of touchpoints through which customers can access and interact with a firm, and the increase in the media and channels through which firms can access, communicate and interact with their potential customer base,” observes P. K. Kannan, who chairs the marketing department at the University of Maryland’s Robert H. Smith School of Business.

Several key strategies can help businesses achieve their digital marketing goals, including:

  • Marketing channel attribution and optimization
  • Behavioral segmentation
  • Micro-targeting

Standard tools and practices, such as Web analytic and advertising tracking and management, can also provide a solid foundation for an advanced digital marketing game plan.

Ask an Expert

Keeping pace with digital interactions and maximizing the value of all that data requires a customer-focused marketing strategy. “Digital marketing starts with customer centricity, followed by effective and efficient ways to leverage digital media and digital channels,” Kannan explains. “Understanding where customers are, how to use media effectively to reach, communicate and interact with them, and how to acquire and retain them using a multi-channel approach—these are key in today’s world.”

A crucial first step is finding experts with the knowledge and real world skills to help a business optimize the sales potential created by digital interactions. “One of the biggest challenges facing companies is building a data competency,” Tanner notes. “I’m constantly being asked by businesses to help them recruit people who have experience in both marketing and data analytics.”

Kannan agrees. “Any firm embarking on digital marketing needs knowledge agents dedicated to understanding the environment and making the right decisions,” he says. “Marketing executives and managers need the support of technology-focused data warehouse experts who can manage the ‘big data.’”

Make DMO a Reality

Digital marketing optimization helps maximize campaign efforts, but using the right system and strategy is key. 

by Nitesh Kumar Jain

Consumers around the globe and across generations are digitally and socially connecting with companies via websites, email and social media. The information gained from analyzing these channels has proven critical to organizations that want to better understand the customer purchase cycle and how to reach, attract, engage and retain customers in the digital space. Marketers are also keen to ascertain that their efforts in optimizing customer experiences are creating loyal and long-lasting relationships, as well as achieving a greater return on investment (ROI). Digital marketing optimization (DMO) can provide the answers.

From Insights to Profits
DMO empowers organizations to gain insights into the most effective and profitable marketing channels for their target audiences. It also creates many direct and indirect benefits such as:

  • Optimizing marketing spend
  • Executing effective multi-channel campaigns
  • Identifying and nurturing the most profitable customers
  • Personalizing digital relationships
  • Increasing response rates to marketing campaigns

Any DMO solution should be able to acquire the plethora of data available on consumer preferences, buying behavior and competitive intelligence from all available sources external to the enterprise, including social network sites and blogs. But for an initiative to be successful, there also needs to be a clear strategy and plan in place to collate, tag and store consumer data and intelligence, then make that data available on demand for analysis.

What it Takes
The key to sustained DMO success is to keep consumer messages simple, personalized and consistent across all channels. To make that happen, the solution chosen should employ analytic techniques to meet expected outcomes, develop appropriate statistical models and provide users with intuitive visualizations to create the most profitable campaigns. There should also be a feedback mechanism that incorporates actual campaign results into the models for detailed customer insights.

A truly optimized solution will provide analytics service capabilities in these areas:

  • Web: clickstream data, Web sales and traffic rates, subscription rates, store cannibalization, Web traffic segmentation, target marketing ROI and Web spend effectiveness.
  • Social media: influencers and customers, competitive and competitor intelligence, customer insights and target audience community building.
  • Customers: lifetime value and profitability, segmentation, cross-sell options through optimized next best offer, brand switching and loyalty metrics.
  • Campaigns: attribution, campaign effectiveness, channel optimization and mark-down elasticity.

Adopt a Solution Now
DMO is fast emerging as a prime means to maximize ROI on marketing spend. Given the vast amounts of attention organizations are devoting to digital channels, DMO can improve messaging to customers—and deliver tangible benefits. And the sooner companies bring one of these solutions into their organization, the sooner they can improve their digital marketing programs.

A Win-Win Situation

Reaching customers in the digital age creates important and immediate advantages. “The benefits of digital marketing are both basic and essential,” Tanner observes. “It leads to a higher return on an organization’s marketing investment, including product development and messaging costs.”

Kannan points out that digital marketing’s benefits flow two ways. “It’s a win-win situation for both customers and sellers, as overall costs of searching for and transacting business goes down, making it much more efficient for both parties,” he explains.

Businesses that fail to place digital marketing at the center of their operations risk losing sight of their customers’ preferences and needs. The inevitable results of this inaction are shrinking market share and steadily diminishing revenue. “Digital marketing is becoming a necessity, and in the future it will become indispensable,” Kannan points out.


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