3 Key Marketing Steps Retailers Can’t Ignore in 2017
Keeping up with innovation has retailers investing phenomenal amounts of time on “what’s next” since the launch of digital in the 90s. However, newer technology and innovation can only be considered a success if they can support a diverse collection of KPIs, including lifetime value (LTV), average order value, brand engagement, share of wallet and mindshare.
And as many top retail brands have learned, looking ahead can make it hard to see where you are stepping today.
Here are three key steps retailers need to take in 2017 — “rights vs. wrongs” that can substantially increase revenue now, far beyond the promise of what lies on the horizon.
1. Silos vs. Experiences
Issue: In retail, most brands treated digital as a separate channel. Website customers were treated as just that. This view influenced the culture within the retail organization, resulting in marketing programs being channel-specific, treating “web” shoppers as though they're somehow different than the rest of the customer base, and creating a compromised “retail brand experience” as shoppers engage across multiple channels, be it digital and/or in-store.
Cost/Opportunity: The cost of this is only beginning to be realized. Research consistently shows that marketing to customers who are known to be engaged across multiple sales channels, in ways that support their preferred shopping methodology, can impact LTV by as much as 30 percent.
Solution: Start with specific customer opportunities that exist within your ecosystem. An opportunity is a specific user group matching a specific interaction. For example, a high-value customer abandons a shopping cart. Map the entry points, data elements collected and ways to identify your customer. Start to build a map of what data is needed, available and missing. From there you can start to see exactly what your data model needs to look like to drive a positive customer experience. Build it into your data model and then start the next one. Keep going until your full eco-system is mapped.
2. Acquiring Clicks vs. Customers
Issue: Digital marketing has let us focus on a myriad of new metrics and KPIs. We began focusing on viewthrough, clickthrough and, yes, even conversion. In our roles, we began being incented on transactions, but with little regard for the quality of the click or the transaction being driven. Being blunt, we stopped focusing on acquiring customers who would have sustained value for our brand.
Cost: First-party research across multiple U.S. apparel and lifestyle brands has shown that LTV numbers are on the decline. The number of “one and done” customers has surged, especially during holiday/seasonal purchases (typically viewed as times when new customer acquisition should be at its peak).
Solutions: There are several, from basic to advanced:
- Better nurture of new “at risk” shoppers/customers: Know your marketing sources that drove the visit or first product purchase. If it came from a source where loyalty would be “questionable," put the shopper into a nurture program.
- Better ad targeting: When you have an enterprise data model, you have the opportunity to build “stratactical audiences” to use as look-a-likes for your display/social marketing efforts. This means that not only can you identify the shoppers who are engaged with specific product lines, but refine that audience to be those who have made multiple purchases in the line or have purchased beyond that line.
- Better lifecycle marketing strategy: If the click is the start of the relationship, managing the shopper relationship that follows is where the relationship is monetized. From working the consideration set towards the first purchase, recognizing lateral product opportunities based on that purchase (these aren’t always complementary products), identifying volatility in a shopper’s purchase pattern of consumable product lines, to knowing when and how to ask the rock star customer for a referral, it all starts with the quality of the acquisition and having a plan for that shopper — no matter who they become.
First-time purchasers who come through comparison shopping are 75 percent less likely to make a secondary purchase with your brand than those acquired through other channels (and some of those numbers are scary, too).
3. Batch and Blast Marketing vs. “Conversation Marketing”
Issue: Retailers fell into the trap of “email is cheap so I’m going to send a lot of it.” Think that’s over and done? Wrong. Retailers are sending different offers and products, flooding into shoppers’ inboxes at an average of three emails per week (during the holidays the average was eight emails per week). These emails more often than not failed to account for historic purchase activity, seasonal browse activity, known product propensity, or the shopper's active engagement with other offers or marketing messages.
Cost: Aside from the obvious subscriber fatigue and diminished value of your brand, there are substantial opportunity costs in not listening and acknowledging what your customer has told you through their actions.
Solution: Move to a “conversation marketing” strategy. The concept is simple: If your shopper has initiated a conversation with you through their behavior, then acknowledge that instead of sending the next batch-and-blast email. This gets us into simple triggered email (e.g., browse abandon, purchase abandon, on-site ad interaction), but can extend to some advanced programs, like seasonal shoppers, continuity/replenishment or purchase nurture.
Make sure you're able to remove customers who skip your planned "customer journey” in favor of their own. For example, did your customer move from the website into the store and finalize the purchase? Do you have a mobile app? Is it connected with your point-of-sale or e-commerce solution? Can I suppress someone who actually purchased from my online retargeting?
Now, in 2017
As promising as new innovations may seem to today’s retailers, there’s plenty that can be done to boost the bottom line. With these three steps, retail marketers can make a stronger, more profitable customer connection that increases revenue here and now.
Jeff Hassemer is chief strategy officer at Alterian, a campaign management and real-time marketing software company.