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Thursday, October 23, 2014
On my flight back to San Francisco tonight, I managed to read the book, What Stays In Vegas, where the author of the book - Adam Tanner shows how Using loyalty programs, ubiquitous cameras, math,“math nerds,” Casinos have mastered data analytics and the collection and use of customer data to gain “an edge in a business where rivals compete fiercely with the very same games.” Caesars showcased here is shown as the casino player who knows its clients intimately by tracking the activities of the overwhelming majority of gamblers. Caesars seems to know exactly the gamblers liking of games, food, stay etc and using these data they can target them better and ensure the gamblers come again and again back to them in a predictable way.
Earlier in the day, I was busy discussing digital marketing to people in the industry, who were not so convinced about its power and reach for them to feel guilty about not participating thus far. I was telling my friends that the era of the traditional methods of marketing campaign are ending. When it comes to digital marketing, many enterprises unfortunately, do not get these right and as a result, massively lose out on the range and depth of adjustments needed to better engage consumers and get superior results.If we carefully analyze the range and magnitude of disruption heaped by the advent of digital phenomenon, it can be easily seen that one among the top business functions severely influenced by digital disruption is marketing as a business function. Seen from the prism of empowerment powered by digital forces, today consumers across every industry are enjoying unlimited amount of influence and authority over any business. The traditional enterprise, hitherto engaged in the era of expensive and wide reaching campaigns find their approach either getting minimal returns or finding them inadequate to reach their customers and prospects in a convincing manner. Its now, a common knowledge across enterprises that the era of glossy campaigns pushing products and services through mass media has been toppled by empowered customers basking under the glory of digital forces churning out information at their disposal, demanding more and more from their vendors.
Traditionally, enterprises based on the industry in which they operate and in alignment with their business objectives,take decision on types of campaigns that they would like to launch. In many enterprises due to budgetary planning, the frequency and reach of campaigns get decided annually and typically campaign calendars are drawn in terms of weekly, monthly, quarterly frequencies. In this model of outreach to customers, in reality, enterprises tend to send campaigns in this preplanned form of campaigning, one or two messages about products or services deemed relevant to the customer(s). In this age of abundance, the enterprises should be in fact catering to different set of customers with entirely different range of product/offerings making the campaign process more effective. This is precisely what digital provides for – enterprises are empowered to push out campaigns that are highly relevant to individual customers. Eg, Visa worked with Facebook to find unique segments of soccer fans on the social platform. Visa’s campaign used social and transactional data to form clusters of people who were served ads.Take the case of a leading elite online retailer (for a change this is not Amazon). They have centralized data and leverage cutting edge data for marketing to create the most personalized e-communication to their customers, so that every customer gets a different message when they receive Likewise, when customers do onsite shopping , the retailer might prioritize certain sales for them to see first, taking into account their stated and observed preferences. They make more nuanced communication – and minutes before the peak shopping hours, several thousands of different versions of messages go out to their customers. In short, this online retailer is practicing a different model of marketing compared to traditional ways of pushing campaigns to their customers.
The ubiquitous smartphone has changed the basis of relationship between the customer and the service provider. Customers can navigate better and learn not only about the price of the product but also about performance, they can see detailed reviews by the users, do comparative analysis of competing products or jump into researching into a different category of product/service altogether – all within a matter of few seconds and doing all these at their choice of place and timing.A seemingly harmless search that a customer does on their phone can reveal so much more about their preferences, if leveraged along with associated data about the customer, his/her preferences etc. Customers could be looking at online websites for information or could be polling in social media for feedback and could be talking to other customers, unknown to each other in real life but connected through digital media.This forces enterprises to push out order of magnitude number of differentiated variants as offers. Coupled with behavioral data and profile data, highly customized campaigns can be launched. This is admittedly very different from the traditional means of marketing where lot of upfront efforts go towards deciding the profile of the customers, the focal group for targeting. From a brute force push of campaigns, the model is changing to guided delivery model. This model makes things faster and can cater to complexity of high order effortlessly. And this is akin to agile software development, fast rollout, constant testing and fixing while repeating this cycle.
The next set of challenges revolves around internal issues. Typically in the past, many enterprises have had multiple divisions or centers of power responsible for different set of channel outreach and doing business. In reality, customers tend to leverage information across channels and consummate sale at a channel – typically research over the web / mobile and walk into the store or vice versa. The customers may tend to talk about post purchase experience in another channel altogether. It must be remembered that the customer journey is more important and not necessarily point of consummation or post purchase discussions. Each of the channels would have to play a relevant role in a customer’s engagement journey.Many enterprises complain about taking the first steps by taking umbrage under budgetary needs and legal compliance requirements. Too often, it can be found that this boils to attitude and leadership – these are workable and there are enough impactful working examples of enterprises who have crossed these humps and beginning to get good returns across industries that can be paraded to convince internal powers, if its indeed the case. Pilots are a killer deal inside enterprises trying to push such initiatives and are facing internal pockets of resistance. Either a product line, a limited service, a small geography can be the candidate for a pilot roll out. Such an initiative will provide the enterprise to understand the typical challenges, changes that need to be done to processes and policies, issues around data and discovery and help the enterprise prepare well for the follow on initiatives.
Digital initiative success hinges on organizational readiness, decision mechanism, data and process gearing as much as tools, algorithms and system. As in the classical way of defining success, it’s the direction that matters and not the altitude to start with. A sensible prioritization of possibilities and starting with what is internally accessible immediately is a surefire way of launching such initiatives. Like in the agile model of development, we will tend to see lot more incremental capabilities getting added over time. The philosophy of continual test, learn and redeploy often should be the specified implementation approach. A carefully enacted design leveraging available data can go a long way in setting the stage for the initiative to move forward. It’s shared objective with a firm leadership that sets the tone for the initiative.The troika – data and discovery prioritization, right leadership and teams, philosophy of continual build, test and redeploy are the key tenets that can drive an enterprise to success. The right technology infrastructure is of course needed for enterprise wide success. Likewise, the ability to map a customer journey across channels is a capability that enterprises need to develop. Associated with these are the issues around process and decision making set up inside enterprises given the massive convergence of traditional processes Many enterprises think through their to-be state technology stack encompassing support/ needed technology upgrades for capabilities in data collection & discovery, content management, business models, test and target and go-to-market approach etc. This is a critical process that should be definitely considered and long term decisions accordingly taken.
The leadership mindset inside enterprises need to change as well, for digital initiatives to have legs and gain strong support within. The key thing to note is that digital initiatives are not just one more channel, Like Burberry experienced a massive acceleration in its business, owing to digital initiatives. For almost every business, digital is massive opportunity for growth and future success. For some business, the fact is that digital may end up to be the only way to survive and grow. The leadership team needs to ensure that newer set of processes required to enable success of digital initiatives are adequately supported across the enterprise. True opportunity to transform and provide superior service to customers may get lost, if sufficient levels of executive support is not extended.Another important trait to be imbibed by the leadership team is the ability to work with data and make decisions data driven across the enterprise. Data strategy should should be treated with as much importance as customer experience strategy. This may look a little odd at first, but when the organization leverages digital, scale of operations coupled with variety will impose different kind of expectations and so would need to embrace data centricity as a key tenet of digitalization. Case at hand Kraft Foods. Kraft recently claimed that their easter campaign brought them 23% increased sales in some categories and by April got four times the return on investment. Kraft disclosed that they serve more than six billion ad impressions targeting 500+ customer segments. The average Kraft brand uses data from 10 to 15 custom segments when buying media. It must be noted that without these data, none of the campaigns would be possible at all.|
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