Data-Driven Marketing Helps Businesses Sell
John Schroeder has a good idea about what you want to buy— and when. You’ve already dropped several hints, giving online signals that he and his team can follow. Like a good sales associate, he doesn’t hover and follow you too closely. He’ll simply drop some suggestions of his own and be there when you’re ready to buy. As business intelligence manager for Golden Valley-based Room & Board, Schroeder helps manage the home-furnishings retailer’s online marketing efforts. Room & Board has more than 40 email campaigns linked to “consumer events that they’ve triggered on our website based on their browsing behavior” and the types of furnishings they’re regularly looking at, he says. What Room & Board sends out is “really a one-to-one email push.”
It’s working. In the last year, sales have doubled over the previous year, Schroeder says. Room & Board has sent fewer emails, while generating more sales. “We don’t want to inundate the customer with emails,” he says. “We want to make them really meaningful to the customer.”
On the surface, it might seem contradictory that companies are using something as impersonal as automation to create a more personalized experience for their customers. But that’s the goal of marketing automation—to know customers so well that you can target your messages to their specific needs at various points along what marketers like to call the “customer journey.”
Companies gather data from consumers from a variety of sources. They capture information online from company websites and social media, but they also glean valuable information from face-to-face meetings, trade shows and other so-called analog sources. Businesses deploy digital technology to follow thousands of active and potential customers to better determine what they want to buy and when they want to make purchases.
Room & Board’s email marketing system, Schroeder says, is “automated—all that just runs.” But he doesn’t mean to suggest that it’s entirely automated. Most businesses are familiar with platforms such as Salesforce, Marketo and Eloqua. Business-to-consumer (B2C) businesses like Room & Board aren’t the only ones benefiting from marketing automation. Business-to-business companies (B2B) also have been reaching out and staying in touch with customers all along their purchasing journeys.
To use marketing automation tools successfully, businesses need to be actively engaged with the technology. In many cases, they need to change the way they sell and market, which isn’t easy, especially for sales and marketing employees who have developed deeply ingrained habits. They still need good salespeople, they need to be familiar with the technology, and they need plans and goals. “We measure the results—we look at what’s working and what else we need to be doing,” Schroeder says.
Scott Litman, managing partner for Minneapolis-based Magnet 360, defines marketing automation as “the ability to automate marketing programs to make the business become more personal, more relevant, more one-to-one.” Litman, whose agency consults with both B2B and B2C clients about the best uses and platforms for marketing automation, notes that strong salespeople and materials such as brochures, white papers and ads are still essential to any company’s marketing efforts. What marketing automation does is gather all the customer knowledge and information a company has and allows the company to better target its customers online. The online realm, after all, is where more and more customers are researching products and making purchases.
The email campaigns that Room & Board developed are an example of marketing automation that many businesses use. Another one, which is familiar to just about all consumers, is retargeting or remarketing. Let’s say you’ve visited a shoe retailer’s site and browsed the options for winter boots. You’re not ready to buy yet—you’re just browsing and checking prices. Later that day, you’re reading the headlines on a news site and voilÃ —there’s an ad from the retailer featuring one or several pairs of boots you viewed.
Inside the business itself, one of the attributes of marketing automation that more businesses are relying upon is lead scoring. Here, the automated system assigns numbers to each potential customer’s action. Opening an email might earn, say, one point, visiting the company’s website five points, while filling out an online form, or requesting a white paper or proposal would earn more points. Accessing other channels—a company’s Facebook page or blog, for instance—also could be scored. The more points, the stronger the lead.
Marketing automation also can measure different marketing channels’ effectiveness. Using big data so that all of the activities—“email, website visits and interactions, clicking on banner ads, typing in a search term on Google, what they’re liking on Facebook—all of these get fed into one data source that comes up with one master data report,” says Nina Hale, of Minneapolis, who founded a strategic digital marketing agency. Hale works with clients using this approach so they understand which types of marketing are working without having to pull together 20 different reports.
“Marketing automation is all dependent upon the integrity of your data,” Hale adds. That can be a particular challenge, she notes, for larger businesses. A big company might have 20 databases, she says, many of which might require a lot of cleaning up. For these organizations, it can be as challenging as it was for business to implement enterprise resource planning platforms in the 1990s.
“It can be extraordinarily painful, and take a really long time, to get people to switch their habits,” Hale says. That can be especially true, she adds, for old-school salespeople who are happy with their own style of making and maintaining customer contacts. The advantage of a data-driven automated marketing system, she adds, is that “it’s less contained in one person’s memory.”
For organizations large and small that are willing to commit to marketing automation, positive results can manifest themselves quickly. And the benefits can take many forms, including customer service. For instance, St. Paul-based credit union Affinity Plus used its new customer data analysis system to look at members’ mortgages. It identified 1,400 members who might save money by refinancing into shorter-term mortgages. According to Affinity Plus, total member savings via refinancing exceeded $1 million.
Online ad placement, particularly for B2C businesses, also can be accomplished through a third-party marketing automation system. The client needs to monitor these outside vendors carefully, however. “When you buy programmatic or marketing automated channels, you don’t necessarily know where your message is going to run or what inventory you are going to have to purchase ahead of time,” notes Andy Brunn, associate media director with Minneapolis-based advertising agency Clarity Coverdale Fury, which advises clients on online advertising marketing automation. Businesses need to make sure their ads aren’t appearing on sites their customers don’t visit. These can include “adult” sites, of course, as well as fake sites that exist only to pull in advertising, and that are “visited” only by bots in order to generate fake page views.
Reaching potential customers online means those customers are willing to receive the marketing. As Litman notes, people are willing to share a lot of private information with a business, as long as they sense it isn’t being abused. He lays out the scenario of a salesperson who calls a potential customer who “ranks at the very top of the lead-scoring information.” The salesperson has talked to this potential customer before and gives him a call. The salesperson tells the customer he’s simply checking in to “see how you’re doing.” The customer replies, “That’s amazing that you decided to call me today. I was just looking at Product X and I’m ready for it.” Of course, thanks to the report, the salesperson knows that the customer is interested in Product X. But she doesn’t tell him that. Instead, she offers to send him more information to help him learn more, and to move the potential buyer along the purchasing journey.
That, Litman says, is the way the conversation should go. Here’s a way it shouldn’t go: The salesperson says to the customer, “Hey, I saw you were on our website looking at Product X. So how can I help you with that?” That approach, Litman says, “is creepy.” Instead of being helpful, the salesperson seems to be spying on the customer.
Needless to say, Room & Board has avoided being creepy.
For Schroeder and Room & Board, one of the advantages of marketing automation is its focus on where the customer is on her current journey. “Behavior-based marketing is more of an indicator than past-purchase history,” Schroeder says. “At least it is for the home furnishings industry. People don’t buy furniture every day.” So Room & Board is looking for signals, targeting only consumers who’ve demonstrated interest, then spacing the emails so that the would-be customer isn’t overwhelmed with messages, which can work against a sale.
But marketing automation still requires the human factor—knowing what your business wants to achieve, and knowing what and how to send in marketing messages to consumers.
The Next Big Things?
In October, Gartner, a Connecticut-based technology consultancy firm, identified some high-tech trends it thinks could have a particularly profound effect upon businesses.
The device mesh. Gartner analysts see the Internet as becoming ever more interwoven with our lives and our various devices. “The device mesh” is the focal point of Gartner’s vision, and includes mobile, wearable, home electronics, automotive and environmental devices—all interconnected, all offering businesses and consumers with multiple Internet access points for communicating and sharing information.
3D printing’s new imprints. 3D printing isn’t new, but it has yet to fulfill its tremendous promise. Gartner says that promise is poised to bear fruit. Material and process innovations are driving development of new applications in more industrial sectors. These innovations could bring 3D printing to the assembly line floors of small manufacturers, altering supply chains and requiring new employee skill sets.
Adaptive security architecture. As interconnected digital technology continues to weave into more aspects of our lives and organizations, cyber-security will become even more urgent than it is now. There will be more potential points of entry for hackers to exploit. Look for new types of preventive security, including “self-protecting” apps and programs that look more closely at user and entity behavior to better identify potential risks.
Gene Rebeck is a Duluth-based freelance journalist who writes monthly for Twin Cities Business.