#7/25: Optimal Database Marketing

Whether the database uses simple or sophisticated technologies, the purpose is the same — to gain a better understanding of customers in order to increase the customer’s satisfaction and the organization’s objectives.

Even if you just use a sheet of paper where you note your customer favorite drinks down, it’s basically a simple marketing database.

Start-up costs for internal databases and order fulfillment can be high compared to traditional brick and mortar retailing, and often database marketing has higher costs per contact. For all these reasons, database marketing may not be feasible for many low-margin products.

Should go without saying, however there are always people who rather sell their newest technology without understand their customer’s need.

Remember that the fundamental rationale for developing the database is to help to achieve organizational objectives. If the database does not accomplish this or hampers interaction with customers, as might occur with some small businesses, then there is no reason to implement it.

Think of a food vendor who serves busy businesspeople in a city’s commerce area. Although the vendor may serve dozens of customers on a given day, he gets to know many of them by name because they frequent his small stand. For example, when a particular customers walks up to his stand, he knows her first name, how she takes her coffee, and how much cream cheese to put on her raisin bagel. The food vendor has developed a “mental” customer database.

I think that’s that is a great example. It shows how easy and helpful a customer database can be and that you don’t have to use expensive software to establish one.

These customers are more likely to be satisfied and consequently more likely to return to his stand in the future […] The vendor may adjust his product assortment based on sales trends he notes. […]

Two levels of possibilities. Firstly, it helps you deliver more relevant offers to your customer. Secondly, it allows you to connect it to other parts of business, like logistics.

Direct marketers have an advantage over retailers and other marketers in that they can quickly test new marketing strategies and validate the results, if they have a well-maintained database.

This is a great advantage which is also available to digital marketers. If you don’t try to optimize and test your strategies, you’ll basically enchain yourself.

A direct marketing professional new to a company must develop an intimate knowledge of the company’s customer data prior to any attempt to develop a name selection methodology for purpose of promotion or treatment. It is a time-consuming exercise but integral to ensuring that erroneous and costly assumptions are avoided during the analysis and modeling phases.

This procedure is important for all data-driven activities. If you don’t understand your observations then it’s hard to get valuable information out of them.

Depending on the objective at hand, different customers information may be used for the actual segmentation. For example, customer activity data (RFM) may be used for product promotion segmentation, and demographic and lifestyle data may be used for market research segmentation.

For each segment there should be an economical way to reach the persons. For direct marketers this is easier but if you don’t have direct contact addresses this can be quite challenges.
You’ll probably see that different segments react to different offerings. For example in the finance industries there are empty nesters, i.e. families where the children don’t live at their parents anymore, which are receptive to annuities or young families with children which react positively to insurances.

Later the authors talk about RFM (Recency, Frequency, Monetary Value) vs. CHAID. RFM is a rather mature technology and often used however they saw that CHAID can deliver better results.

There can be some issues with testing:

  • Promotional Intensity – maybe the amount of promotions can influence the behavior stronger than just the content
  • New product destroys the market of the old one
  • Too many products which lead to customer indecision

Tips:

  • Don’t always test the same persons
  • Create a hold-out set which has the same distribution (e.g. RFM) as the control group
  • Always keep the original set because things can change between start and end of your experiment
  • Try to calculate the LTV – it doesn’t matter if you can get short term profit which destroys the long term earnings
  • Try to test everything

Choose your confidence intervals is influenced by your goal. If you want to test a new product or other high risk undertakings, then choose a large CI. Otherwise, you can choose a rather small CI.
I personally would recommend using Baysian methods for constructing CI, called credible intervals. The advantage is that the interpretation is a lot easier than using frequentist CI. A 95% credible interval means that with a probably of 95% the real value is within this interval.

Also timing can be rather important. Besides the traditional week of day, etc. the press, natural disasters and other things can influence your results. So try to incorporate them into your interpretation.

All in all, the book was okay. It has a strong focus on enterprise level db marketing but only provides an overview. It’s probably quite good if you are on the business side and heard a course on database marketing or direct marketing.

Reading Adobe’s Digital Marketing Blog (Part 3 / End)

Has an Executive Sponsor Got Your Back?

  • Without executive sponsorship it’s hard to overcome organizational inertia
  • Senior executive should within a key stakeholder group for WA (e.g. ecommerce, marketing, etc)
  • They should have enough power and influence
  • Depending on the WA maturity the sponsor executive may vary (tactical to strategic)
  • Executive sponsor responsibilities
    1. Align WA program with corporate strategy
    2. Protecting the WA team from other initiatives/corporate politics
    3. Solving problems like budget constraints
    4. Promoting the success of the WA program
      1. Effective executive sponsor should be committed and involved

Online Accountability: Are You Data-Driven or Merely Data-Informed?

  • Without accountability your organization is just data-informed
  • Establish clear goals
  • Regularly talk about the performances
  • Give feedback and maybe rewards – can be adversarial
  • Accounting should start at the top. Lead by example
  • Expand beyond web KPIs

Soft vs Hard Bounces: A Closer Look at Bounce Rate

  • Hard bounce rate = Bounce Rate on new visitors
  • Soft bounce rate = Bounce Rate on returning visitors

Switching to a Data-Driven Culture

  • You have appeal to the rational and emotional sides
  • Sometimes resistance is lack of clarity
  • Laziness can be exhaustion
  • Tactics:
    • Look at what works well instead of was is not working well – easier to promote
    • Provide actions that have to be taken to change
    • What does this mean for the near future?
    • Surprise people – testing stuff is a great tool
    • Try to achieve lots of small goals instead of one big one
    • See failures in execution as learning not as failing
    • Provide a data-driven environment
    • Build habits – repeat, repeat, repeat
    • Provide workshops for homogeneous groups

Five Times to Test: 4 — When you spot an opportunity in your analytics

  • Often hypotheses drive testing
  • But you can generate hypotheses with analytics
  • They took the ~50 top-selling products and plotter conversion rate and avg. selling price
  • Look for outliers
    • Positive outliers: try to promote them more prominently
    • Negative outliers: Check at least the page – is it broken? No content?

Is Your Data-Driven Organization Heading into a Lake?

  • Data should inform and shape not dictate or control
  • It’s like science: intuition helps to understand and inspire, data helps to check and reject
  • It helps you question your assumptions
  • Data-informed: nice to know this information
  • Data-driven: acting on the information

Are You Using Web Analytics To Power & Improve Your Testing?

  • Don’t test randomly, test with hypotheses
  • Benefits of WA:
    • Helps you to understand your testing efforts in context
    • Helps you to prioritize testing areas
    • Helps you to improve your decision maing
    • Provides insights that help you to make even better tests
  • Things you should do:
    • Analyze your conversion funnels
    • Start higher up the funnel (note: in contrast to previous article)
    • Check your top landing pages that have high bounce rates
    • Check heat maps for your testing pages – what is the customer intent?
    • Set alerts for new highly visited pages
    • Improve your test plans with analytics insights
    • WAs and testing people should work together

Never a Failed Test

  • Testing is a long-term strategy
  • Does every test answer a clear business question?
  • Do you know before the test what you do, depending on the results, afterwards?
  • Negative lift is even good lift – you learned something!
  • Do you think testing is valuable or risky?
  • Do you have to hit the big wins? – This can interfere with your learning ambitions

Why we do what we do: Garbage in and Garbage Out — Congruence Bias

  • “the ten­dency to test hypothe­ses exclu­sively through direct test­ing, in con­trast to tests of pos­si­ble alter­na­tive hypothe­ses”
  • Example: Hypotheses: Button 1 opens the door, not Button 2; Test: Just press Button 1 and check if it opens the door
  • In web testing: Test picture against no picture, or CTA against no CTA
  • It’s easy to get big results but not great answers

Great summary/overview: Digital Governance: Best Practices from the Trenches

Reading Adobe’s Digital Marketing Blog (Part 2)

Avoid “anticipointment”: bridging the gap from ad to site

  • Ads and web site work together – don’t just invest a ton in one medium
  • Marketeers fall easy into the ad trap because it’s easier than creating an usable, engaging web site
  • People expect that the click from the ad will be of even more value than the ad
  • Online Marketing Value Chain: Basically Customer Lifetime Cycle
    1. Click ad, engage deeper in the landing page
    2. Make their way through conversion opportunity
    3. Become loyal customer
  • Most of these steps will be on the web site!

Creating a Successful Lead Nurturing Strategy, Part III: When Should I Call?

  1. Call within 5 minutes of the initial contact
  2. Call early at morning or late in the afternoon
  3. Call on Wednesday or Thursday – I personally tried this against Monday and Friday and it was highly effective
  4. Call them up to four times and send one email in the first 24h
  5. Test these tactics

Creating a Successful Lead Nurturing Strategy, Part IV: Your Long-Term Strategy

  • The main is not to sell but to maintain a relevant conversation
  • Offer relevant and personalized content – recent study showed that most content simply sucks, so watch out
    • Email – automated, personalized and relevant; reports, tips, guides, best practices
    • Phone – Follow up; provide deeper information, answer questions
    • Direct mail – reinforce what you’ve talked about; again personalized and relevant
  • This process should be repeated maybe once a month

Optimization Is Greater Than the Sum of Its Parts

  • Testing & Targeting are greater than just once
  • however often they are siloed
  • Start with testing and segment the results
  • This helps you to find better content for targeting

Building a Business Case for Optimization

  • Biggest problems are processes and politics
  • They hadn’t ownership over the site
    • Testing generates positive ROI!
    • Optimizing landing pages increases off-site ROAS (Return On Ad-Spending)
    • Test to fail faster – some of your assumptions are probably wrong
    • Dig into analytics, segment and provide insights

The Collaboration of Testing Ideas

  • Include other people and departments in your testing
  • Often people in development, IT, creative, etc. have ideas – just ask them
  • Test Ideas:
    • Test different landing pages: home page, product page, internal search, etc.
    • Reinforce ad text/graphics on the landing page/multipage setup
    • Test ads
    • Test incentives for submitting to your email database
    • Test emails
    • Build a story with the ad and following pages
    • Test different viral/referral elements: coupons, vouchers, …
    • Test different forms
    • Test % Off vs. $ off
    • Test your CTA copy, size, color, style
    • Test scarcity on offers
    • Test different copy approaches: informative, funny, benefits oriented, etc. and analyze segment behavior
    • Test signs of trust: security message, shipping info, return policy, etc.
    • Test geographical targeting
    • Test simple content vs. rich media
    • Test content vs. no content
    • Test free shipping vs. % off vs. $ off vs. guarantee vs. …
    • Test promotion tresholds: 10% on $50 vs. 15% on $100
    • Test different internal search results – hand picked, automated, editor picks, big brands, cheapest first, best selling first, highest rating first, etc. and segment(!)
  • Strategies
    • Understand your goal – what are you’re trying to improve?
    • Start with the bottom in your funnel – it’s easier to get more impact
    • Try to understand why alternatives work better
    • Try to improve one theme at a time, e.g. decrease registration drop off, copy style, etc.
    • Focus on big things: product shown, pricing, primary copy, images, offer, CTAs

Five Times to Test: 1 — When you need to optimize beyond the click

  • Data without analysis and communication is not very useful
  • Even then without taking action, it’s practically useless
  • Often lots of money is invested in driving traffic but less in converting the traffic
  • Example: large business $100MM PPC budget, less than $200k for optimizing landing page/website
  • Mark Typer, Wunderman: 15% Optimization, 85% Ad spending

Five Times to Test: 2 — To resolve internal disputes

  • Do you have a dispute? Just test the idea
  • Similar things can work different on different websites, e.g. CTA wording

Reading Adobe’s Digital Marketing Blog (Part 1)

Another reading session. This time it’s the Adobe Digital Marketing Blog. One of the first posts are from the omniture blog which is now that blog.

Getting your daily dose of dashboards?

  • “feel good reporting” = long reports nobody reads
  • Instead of reading 50 pages, provide fast 30 seconds overviews
  • Daily monitoring helps you to fix problems fast

Industry benchmarks: everything you need to know

  • Problem with benchmarks: things are measured differently
  • Metrics vary between days, geography, etc.

More on conversion benchmarks…

  • How should I act based on trends in benchmarks?
  • E.g. conversion rate down – what does this mean?
  • CTR for emails up – which mails, which basis?

Got Alerts? Don’t let this happen to you!

  • Wanted to buy a new graphics card
  • While checkout a message said “your shopping cart is empty”
  • Check but couldn’t add anything to the shopping cart
    • Activate alerts for your most critical metrics!

The Dark Side of A/B Testing: Don’t Make These Two Mistakes!

  • Example: New home page with special offers and cleaner design
  • 90/10 split test, i.e. 10% to new design
  • KPIs: home page conversion rate and revenue per home page visit
  • both increased
    • Problem: Which helped increasing the KPIs – Clearer design or special offers?
  • Solution: Don’t change more than one element on a page – it helps you understand your customer’s behavior
  • Alternatively: use MVT
  • Example: tested new thing but CV lowered dramatically
  • Look at your customers – are the new or old?
  • Especially old, frequent customers can be unreceptive to changes
  • Solution: Segment your customers, better on RFM metrics

How to Spend Fewer Dollars, Smarter and Faster, during Tight Times

  • Search: real-time, easy measurable
  • Email marketing: fast, easy measurable
  • Online video: expensive but measurable

The Challenges and Value of Digital Marketing Integration

  • Customers are
    • Better Connected – more information, can easy switch channels
    • Bombarded – tons of information
    • Empowered – can publish reviews, write on their blog, etc.
    • Savvy – higher expectation for relevant and personalized experience
  • Harder to track customers on different platforms but possible

User-generated Content and Word of Mouth Marketing

  • Conventional marketing
    • Intercept – target and expose your message
    • Inhibit – make it difficult to compare your product to other
    • Isolate – remove all third parties
  • Digital marketing
    • Attract – create incentives for people to seek you out
    • Assist – be helpful and engage with people
    • Affiliate – mobilize third parties to become more helpful
    • Analyze – find out what’s working and where you can improve
  • Not only conversions matter, they rest of the people do too!

Reaching the Individual: Site Surfers Becoming People

  • Each visitor is unique
  • Provide relevant content if possible
  • Understand the behavior of visitors – how can you improve their experience?
  • Personalize as much as possible

Don’t Do This! 7 Pitfalls When Deploying Analytics (Part I)

  1. Neglecting key stakeholders – websites touch all facets of an organization!
  2. Focusing on tactical requirements – what are your strategic business requirements?
  3. Believing data equals requirements – don’t ask for KPIs ask for strategic goals
  4. Having too many KPIs – select these KPIs that are strongly tied with your goal

Don’t Do This! 7 Pitfalls When Deploying Analytics (Part II)

  • Get too much into detail – don’t neglect the global picture
  • Mul­ti­ple ver­sions of the truth – there are differences between measurements in tools. Get over it and start looking at trends!
  • Isolate yourself – Start teaching how to use analytics and bring power users into your circle for more innovation
  • Ana­lyt­ics suc­cess is all about build­ing a base­line for per­for­mance (your KPI trend), and try­ing new things to improve on this base­line. That’s it!

How to Make Testing Successful

  • Do it right the first time, so you have accurate data
  • Start testing the important stuff and act on your findings
  • Start with politically easy things first
  • Be excited about testing and evangelize

Answers to Practical Questions about Targeting

  • Test site elements, content bits, CTA, etc.
  • Targeting helps to feel your customer at the right place
  • You can practically target everything
  • First-time visitor can be targeted by referrer, keyword, time of day, day of week, geography, browser, OS, etc.

Do You Have an Automated Response and Lead Nurturing Program in Place?

  • Strategy for lead nurturing / drip marketing
    1. Send email from your real sales staff with phone number
    2. Send relevant content for your prospect – e.g. shopping cart abandonment -> send email with reminder; different emails for different industries in a B2B setting
    3. The timing should be right – first contacts to leads should be within five minutes(!); try emails for longer periods
    4. Follow up quickly and then back off slowing – don’t spam your prospect
    5. Automate everything

The Art and Zen of Testing for Success

  • Don’t just take lift as a goal
  • Start witch question: e.g. should be button be blue or red? Is the navigation on the left or right more effective?
  • Try to answer ‘why’
  • Advantage: It isn’t about the goal anymore, it’s about insights