The Guide to Marketing Nirvana [Step 7]
Since deciding to invest in your Predictive Marketing Automation [PMA] platform, you’ve generated a wide range of actionable customer intelligence and insights along the way.
You’ve integrated all relevant data and enhanced your database so you know more about your customer base than ever before. You also have a new, addressable marketing segmentation strategy that both targets and messages the right customers at the right place, at the right time.
You’ve learned the process, arranged your data, and implemented actionable programs in place, but what do you need to keep your eyes on to know if your organization is staying the course and truly headed in the right direction?
This final section will show you how to monitor and alter your campaign metrics over time to maximize your ROI and ensure sustained marketing success.
Revisiting Customer Lifetime Value and the Buyer Lifecycle
In order to achieve sustained success, you must keep a constant eye on the value of your customer portfolio. Specifically, what will these customers be worth to you in the future? What is their expected Lifetime Value (LTV), particularly their Future LTV – and how many of these customers are actively purchasing from us, revealed by the Buyer Lifecycle (BLC) statistics we have discussed previously. Keep in mind, these are just two metrics to keep track of in addition to all of your other metrics of profitability.
You should always strive to increase the Future LTV of your customers. If their projected value is increasing as a whole, you’re making the right moves. On the other hand, if it’s decreasing, you want to analyze your PMA dashboard and understand the causes behind it.
When you log into your marketing system, you should have a customer intelligence dashboard with many metrics that allow you to understand the overall viability of the customers you have and see whether their value is trending upwards or downwards over certain time periods.
Below is an example of typical PMA customer metrics available through the BuyerGenomics™ dashboard:
By viewing all nine of these operational metrics over any specified timeframe, you can analyze how you’re performing from day-to-day and adjust accordingly.
Additionally, other metrics such as the last transaction date, to determine the recency of purchases, number of transactions, and the amount/frequency of individual customer purchases provide valuable insights. For customer profiles, PMA’s will typically monitor a range of demographics and behaviors, including buyers by state, dollar amount of transactions by customer, and gender, as shown below:
When viewing your Buyer Lifecycle (BLC), keep an eye on the percentage of your database that is either fading or at risk to become dormant, and focus on shifting those buyers back into either Active or In Market.
In essence, the BLC helps you understand how well you’re inciting brand engagement in real time, and how many customers are actively shopping for your brand. The chart below summarizes the Buyer Lifecycle Stages.
5 Key Strategies [And the Metrics that Guide Them]
From a database marketing perspective, there are many different strategies that companies deploy to increase profitability.
This series has highlighted 5 Core Strategies that Marketers use successfully. Let’s revisit them here:
1. Convert 1x Buyers
One-time buyers represent the largest overlooked opportunity for retail commerce marketers today. In fact, it has been that way as long as there have been retail sales.
Rather than focusing on the Trial (one-time purchase) population, organizations instead remain focused on acquisition as an avenue for growth.
Yet the grim reality is that the majority of those acquisitions lead to just a single purchase with no subsequent value.
Meanwhile, numerous published studies illustrate that the cost of acquiring a new customer is at least 5 times the cost of maintaining an existing customer. This results in a significant waste of time, money, and resources that could be focused on cultivating repeat customers.
2. Grow and retain Most Valuable Customers (MVBs)
The objective here is to treat your MVBs like the special customers that they are.
In turn, provide these customers with recognition, along with all of the special privileges they’d expect to have as a highly valuable and loyal customer. Special care should be given to monitoring this segment of your customer universe.
3. Acquire higher potential customers
Simply put, PMA intelligence guides you to fish where the big fish (high value customers) are.
We’ve talked about psycho-demographics and maintaining promotion history, and there are other special attributes you can use help find potential customers
All of this information can be used to inform media allocations and create acquisition models to improve customer acquisition efforts. Equipped with the right models, you can calibrate your acquisition efforts and maximize the return on acquisition efforts.
4. Grow high potential non-MVBs into MVBs
Some customers from the get go show signs of very high potential.
These are the ones that typically have higher spend in their first months as a customer. This presents an opportunity to quickly target them with special treatments in order to grow that potential as quickly as possible.
Rather than treat them like any customer, begin to treat them like the special customers you believe they can be.
Cater your messaging by providing them with different incentives that can trigger potential sales. Begin to treat them like you recognize they are a special customer.
5. Rescue fading and at-risk customers
These are the people who are fading and at risk of stopping purchasing from us altogether.
Since we understand through our buyer lifecycle stages that there is an expected repeat purchasing window for our universe, there’s a time to take action and reach out to customers before they become permanently dormant.
Time is always of the essence. The longer you wait, the less likely they’re going to purchase again and shift back to Active status in the BLC.
There are thousands of examples, but once the customer is rescued, a PMA allows can help you identify the timely, relevant actions and messages that actually brought that person back. From there, you can attempt to further cross sell and upsell based on whatever made them successful.
Either way, whatever offer or treatment brought them back, you want to be able to capitalize on that in the future.
Keep in mind that while MVBs are extremely important to cultivate, they generally only make up 15 to 20 percent of your customer base. Therefore, while the other 80+ percent may not be spending as much or buying as frequently, they remain a critical component of your business.
Do not underestimate the role of your “average” customers. They are still actively shopping from you, and even if they never become MVBs themselves, they still have the power to refer others to your business who may become heavy spenders themselves.
As retailers introduce new product lines – particularly as the seasons change – there are campaigns messaging to everybody in your customer base.
PMAs can help personalize these new product campaigns both effectively and intelligently – helping you to determine which messages are most effective for certain customers while managing all of your other business needs on a day-to-day basis.
For instance, if you are a clothing retailer, some of your customers may purchase from you throughout all four seasons, while others could only buy during the summer.
Therefore, smart campaigns treat each customer differently, tailoring communications to their seasonal purchase patterns and maximizing relevance according to the particular data you gather about them from your PMA.
The reality of today’s business environment is that marketing and technology have converged and they are continuously evolving and shifting. The emergence of the cloud is changing the game for everybody, and marketers have access to powers that they never had before.
That is precisely why you need a tool like a PMA to serve as the command and control center that guides your business and marketing endeavors. It lets you know if you’re creating better customer relationships, increasing customer value, which of your products are popular, and which are no longer attractive.
Basically, PMAs let you measure the health of your business from a range of perspectives, including:
- Product marketing
This helps you to understand every aspect of your business in real-time and try new strategies to become more successful.
The real distinguishing factor that a PMA offers as opposed to what many other retailers are doing today is that it fully integrates your data in real time. This offers a customer perspective that was once historically absent because client purchases weren’t addressable or identifiable.
In fact, you can achieve these marketing and technology benefits much faster than ever, and for a price that is a mere fraction of what it used to be, and much faster than ever. Nowadays, PMAs are achieving real-time updates and allow you to respond to business/customer needs at a rate that no one could have dreamed about years ago.
The capabilities of a Predictive Marketing Automation platform are no longer a luxury – they are a necessity to stay afloat in this competitive, always evolving retail landscape – much in the same way you need electricity to keep the lights on. In today’s digital age, customers have high expectations from retailers. Meeting these expectations will require the application of data, artificial intelligence, machine learning, and database marketing strategies for the foreseeable future.
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