To be successful in the B2C marketing world in 2020 (and beyond), it's critical to engage your customers with personalized content and messaging that drives interest in your brand. In order to do so, you need to be able to reach them on the channels and mediums where they are most active. However, it's not enough to just focus on just a one or two of those channels, because you risk missing out on valuable business-generating and rapport-building interactions with your customers. This is why, in 2020, a cross-channel marketing approach is the way to go.
With cross-channel marketing, all of your marketing channels (offline and digital) work together to take your customers on a journey from one channel to the next in a seamless fashion that ultimately drives them towards a purchase. But in order to do so, cross-channel marketing requires a clear and infallible understanding of your customers' habits, preferences, and, perhaps most importantly, all engagements with your organization. Plainly put, carrying out a cross-channel marketing strategy requires the use of accurate and complete historical and real-time customer data in order to be truly effective.
Recently, Jake Hall, QuickPivot's VP of solutions consulting, participated in a webinar with the media publication, Toolbox for Marketing, titled, "How to Measure Cross-Channel Marketing Outcomes in 2020." During the webinar, Jake discussed what it takes to succeed with your cross-channel marketing efforts, including the critical role customer data plays in these efforts and what types of metrics you should be monitoring to ensure fruitful campaigns. We encourage you to check out the on-demand recording of the webinar.
Following the webinar, we sat down with Jake for a Q&A session to address some of the more challenging aspects of cross-channel marketing, including the tools needed to succeed, the future viability of direct mail, and the impact of COVID-19 on marketing efforts. Here's what Jake had to say.
1. If an organization is looking to implement a customer data platform to support its cross-channel efforts, what are some of the first things they should do with it?
Jake Hall: Implementing a customer database can be a very exciting time for an organization, and not only for the marketing team! Having a robust view of behavioral and transactional customer data has far reaching impacts influencing financial and inventory forecasting, merchandising, executive leadership, and even customer service. But, as with any tool, its only value comes in how it’s used.
For most organizations, implementing a customer data platform represents the first time that stakeholders gain a truly comprehensive picture of their customers across channels through the purchase funnel. A critical component to realizing value is in making sure that you have a good understanding of the company strategy going forward. Are you in fast growth mode and focused on acquisition and investing? Or is your business more mature and looking to optimize profitability?
No matter what, a smart place to start is to begin measuring your customers’ lifetime value (LTV). This critical metric helps you understand what a customer is worth to the organization and provides a framework to start evaluating how customer LTV varies between different metrics. For instance, is a customer worth more if acquired in one channel or another? Are customers buying from one product line more likely to return to your brand than others? And what can you reasonably invest to acquire (or retain) a customer? Having these perspectives enables you to make plans for testing and deploying new campaigns, offers, channels and lifecycle programs to improve your customer value and achieve your goals.
2. What’s the best way to determine how long to calculate customer lifetime value?
Jake Hall: There’s no one-size-fits-all answer to lifetime value calculations, some organizations will even evaluate multiple timeframes looking at Near-Term-Value and even Medium-Term-Value as well as a Lifetime Value. Common periods range from 12 to 36 months. That said, there are two most significant factors in figuring this out:
Factor #1: What is your goal for your return on customer acquisition? If you have a mandate to acquire customers with a positive ROI within 12 months, then you will definitely want to have a 12-month customer LTV for at least one perspective.
Factor #2: How often do repeat customers buy from you? Certainly a grocery store will have very different customer purchase cycles than a furniture retailer. It’s important to look at your prior customer behavior to determine common purchase intervals and ensure that your customer LTV perspective allows time for typical customers to make repeat purchases.
3. If an organization mails print catalogs but finds the process to be too expensive when compared to digital ROAS, is there a way to scale back?
Jake Hall: Certainly! My mentor used to say “Never drop a name without a reason,” so if you need to scale back for any reason, let’s take a look at what segments are performing and where the program is least efficient. But even before getting to that point, let’s make sure that we’re not throwing out the proverbial baby with the bath water. It’s easy to conflate ease of measurement or measurement of a single metric with success or failure of a program. I’ve seen many clients cut back on “expensive” print campaigns only to see their digital efforts mysteriously lose productivity in the wake of it.
Similar to mass media campaigns, print campaigns often produce a “halo effect” that drives customer engagement that may not be readily trackable with direct measures. While one answer to this can be found in looking at different attribution strategies, a quick read of this can come from implementing a test and control strategy to measure the cumulative impact of the campaign. Use your CDP to create customer test segments that will be held out from print campaigns and evaluate those segments' total performance across all channels over time compared to the customers receiving the print campaigns. Ideally, you will hold the same control segments over time (a season or two at least) so you’re not just measuring the effect of skipping one print contact but instead the channel as a whole.
Finally, be careful to make sure that your key metrics are aligned with corporate goals. ROAS is a starting point, but also keep in mind differences in lifetime value and order contribution, you might be surprised at what you find!
4. In your opinion, is direct mail still a viable avenue given the growth and success shown on digital channels?
Jake Hall: Direct mail is an important arrow in the marketer’s quiver: it holds a unique position in the ecosystem that, while more expensive on a unit basis, can provide a level of engagement that digital media cannot. While it certainly doesn’t make sense to put a catalog in the mailbox as often as you might send an email or have a digital impression, a printed mail piece can stand out and remain relevant on the coffee table in a way that you simply can’t achieve digitally.
The important part is to make sure that you’re using each arrow in your quiver effectively to drive overall success. This may involve sending a catalog to introduce a new season’s merchandise while reinforcing that with email campaigns leveraging similar creative and offers, creating a synergy more effective than either channel alone. New technology is helping drive this forward as well, the ability to drive personalized print-on-demand campaigns allows marketers to get the best of both worlds; customizing creative and content along with timing to suit the recipient and maximize relevance while still providing the tactile engagement of printed piece that’s not going to get caught in a spam filter or buried in an inbox.
5. How has COVID-19 highlighted the need and importance of effectively managing cross-channel marketing campaigns?
Jake Hall: A rapidly changing environment tends to favor the nimble and informed – fortunately those are two things that come with a good CDP in your toolbox! This all comes down to the fundamentals: know your customer and understand how their needs are changing. This could mean providing different offers or services regionally depending on the local situation, identifying which customers may be on the front lines vs. those that are stuck in their homes, and how does the “new normal” change your customers’ needs and how can you meet them where they are now.
