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What Will Campaign Management Be Like In 2020? December 30, 2008

Posted by Elana Anderson in Database Marketing, Integrated Marketing, Marketing, Marketing Technology, Online Marketing, Product Marketing, Web Analytics.
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15 comments

I was recently asked what I thought Campaign Management software would be like in 2020. My quick (and somewhat flip) answer is to bemoan the seemingly slow pace at which marketing software has evolved to date. After all, as scary as it may be, 2020 is only 11 years away!

What were you doing 11 years ago? I was working on a project with Eddie Bauer to build a big marketing data warehouse and implement software to explore and mine customer data. Our business objectives? Better understand and drive cross-channel behavior, increase the effectiveness of EB’s catalog marketing efforts, and increase the synergy between the direct (catalog) and  and retail channels. Fast forward to today, I continue to see lots of projects that sound very much like that one.

But, to be fair, the marketing world has also changed dramatically in 11 years. Eleven years ago, eCommerce was new and order volumes were low. Eddie Bauer and most other leading multi-channel retailers, were still printing online orders and entering them by hand into the catalog order system. Marketing (and CRM) technology has also largely evolved in this same time period. We’ve seen the growth and demise of great companies like Exchange Applications, Prime Response, and Epiphany. We’ve seen the development of categories like eCommerce and Web Analytics (Omniture has evolved a lot from its early days as SuperStats.com and MyComputer.com).

So, back to the question at hand. What will Campaign Management be like in 2020? I preface my comments with the above to explain why I apply a measure of realism to my fantasies around how dramatically Campaign Management will change in the next 11 years. The technology will change at the rate at which marketing organizations can absorb it. And, the biggest barrier to technology absorption — at least in my experience — is the maturity of the marketing organization and its processes. IT can be another key barrier — a barrier which can be reduced to an extent by on demand solutions. The other bright side of on demand — as I wrote about more than two years ago on Forrester’s Marketing Blog — is that the development innovation cycle can be dramatically decreased.

With the above as preface, my thoughts (appropriately influenced by my current and former colleagues — some of the brightest minds in the marketing technology sector) on Campaign Management in 2020…

What is Campaign Management Anyway?

One key thing that the industry (vendors, analysts, et al) needs to consider is that what we think of as Campaign Management today is not campaign management at all from the marketer perspective. Specifically, the industry largely defines Campaign Management as technology to support outbound direct marketing campaigns. It’s time to take a broader view. To start, we must incorporate the management of marketing communications through inbound marketing channels into the definition. But beyond that, if you really think about how marketers define “campaigns” ( i.e., inclusive of a much broader set of campaign types ranging across direct, online, and traditional mass media), then the definition of Campaign Management needs to expand to enable marketing to manage, automate, and measure any type of marketing campaign. Interestingly, this makes what the industry defines today as Marketing Resource Management (MRM) or Marketing Operations Management (MOM) really Campaign Management (I have  never been that keen on terms anyway;-)… It also means that what we know of today as Campaign Management really becomes Centralized Customer Decisioning, Customer Decision Management, or Customer Message Management (none of those are great and I’d love to hear more suggestions, but you get the idea).

Immediate Evolution of Campaign Management

In the immediate term, we absolutely need to see campaign management solutions expanding to provide two key things:

  1. Integrated support for inbound and outbound marketing. Simply put, Campaign Management solutions can no longer just support outbound marketing. Response rates to outbound marketing activities are continuing to decline and inbound channels (online and offline) offer a tremendous opportunity to interact with an engaged customer. While some CM solutions today have inbound capabilities, the fact that these capabilities are not integrated with the outbound capabilities presents another significant challenge to marketers. The vast majority of companies identify “improving customer experience” as a key corporate priority. The idea of centralized decisioning — which integrates inbound and outbound messaging driven by rich interaction history — is core to helping firms carry interactions seamlessly beyond a single channel.
  2. Integrated support for online and offline. Most of us recognize that companies can no longer treat the Internet as “new media” or a standalone skunk works marketing function separate from the rest of the marketing organization. Interestingly, the kinds of things that onlinemarketing groups are trying to do today requires many of the core capabilities that most Campaign Management applications possess. But Campaign Management also needs to evolve to deal much more effectively with visitor anonymity, online behavioral data, and web channels. Beyond that, it must also better support marketing’s need to integrate across online channels themselves (yes, current technologies do a poor job of helping marketers integrate their online efforts much less online and offline!) as well as offline or traditional channels. 

What Will Happen to Campaign Management Next

When we think beyond the more immediate future, there are some important mid-term priorities:

  • Campaign Management must improve and consolidate response attribution. Campaign Management solutions across the board do a mediocre job of capturing and attributing responses. And, this ability needs to extend beyond the attribution to direct marketing offers, but also merge that with touch points such as: an organic search click through, a TV commercial that is running in the area of the customer with a reach of x% of that area’s population, even a banner or video insert ad view on the Internet at the extreme. The other major piece is the ability to evaluate a series of responses to marketing messages to understand the role that each message or the combination of messages has in getting to the final outcome.
  • Campaign Management must evolve to support new channels. We are finally starting to see interest in mobile channels really heat up (in the US, not just EMEA and APAC). So far execution (i.e., real action) is still primarily focused on SMS/MMS but the exciting shift will be as more consumers adopt advanced mobile devices and further leverage mobile browsers, GPS, etc. Socialchannels are another good example, Campaign Management needs to figure out how to integrate with and support messaging through social networks and communities. Some of this is possible today but the capabilities need to be fleshed out in much more detail.
  • Open EMM will emerge. Feeding off of the need to support new channels, Campaign Management vendors must recognize and accept that  innovation is happening the fastest within the channels and media itself. We’ll see technology like HTML, Flash, SVG, TV, eInk/flexible displays, etc. changing so significantly that our notions of landing pages and website offers, web calls to action, and product placement must change along with it. Marketing software has to be brilliant at decisioning, optimization, and integration as well as pulling all marketing activities together to support cohesive planning, management, and measurement, but the software should never hold back the media and channel innovators from pushing the envelope. So, Campaign Management (call it Enterprise Marketing Management if you like) must provide a system of record and flexible application framework into which channel applications can effectively “plug in.” There will never be a single application that does everything for marketing soup to nuts (and marketing groups will never accept one), the key is for the core software platform to provide the organizing framework, the message decisioning infrastructure, and the measurement capability.
  • SaaS CM will rise and then move into the cloud. Over the next five years the lion’s share of marketing technology innovation will be in software-as-a-service (SaaS) solutions. As the definition of Campaign Management expands (as noted above) and extends from core direct marketing groups into online groups and into new vertical markets, appetite for easy-to-implement, easy-to-use, lower TCO solutions will escalate. As I also noted previously, a nice by-product of SaaS will be more rapid innovation in the marketing technology sector. But, few highly successful software companies manage their own hosting operations — applications are designed for mega hosting infrastructures (e.g., Microsoft, IBM, Google, Amazon) that have a-million-plus-nodes hosting infrastructure. Smart software companies will design and optimize their apps to leverage virtual servers and storage offered by emerging cloud computing infrastructures.

Beyond these ideas we can dream of technology that supports fully automated marketing processes and black box decisioning, tools that simplify marketing complexity and support collaborative, viral, and community marketing (I don’t know about you, but the ads on Facebook are already starting to get to me!)… We can further imagine that marketing and buyers have a mutual love:love relationship and that marketing has ceased its shouting and focuses purely in a service-oriented role. We’ll continue to work towards that and I’ll continue to preach to it, but if you want me to put my money on the table, I’m telling you that this kind of nirvana is more than 11 years away.

Happy New Year everyone!  I’d love to hear what you are thinking along these lines.

Next Generation Campaign Management August 18, 2008

Posted by Elana Anderson in Database Marketing, Integrated Marketing, Marketing Technology, Online Marketing.
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Campaign-management technology has long been associated with the creation and deployment of outbound marketing campaigns. It’s time to change that. Marketing can no longer afford to simply act as a bullhorn pushing the product du jour or blasting cross-sell and up-sell offers.

Marketing experts have been talking about ad overload for years now. Simply put:

  • Consumers are overwhelmed with ad content.
  • They are tuning the messages out.
  • Response rates are declining while costs are rising.

Marketing organizations must evolve by shifting their communications strategy away from one-size fits all push marketing to a more customer-centric strategy that leverages the increasing proliferation of addressable channels and strives for responsiveness to individual customer behaviors. This shift requires marketing organizations to get beyond the old-style outbound campaign construct and seek to engage customers and prospects in a cross-channel dialog that builds upon their past and current behavior (I refer to this new style of marketing as interactive marketing). To do this effectively, marketers need technologies that enable them to:

  • Listen to all information provided by customers and prospects — both explicit and implied.
  • Understand past and present information to determine the best possible marketing action.
  • Communicate in a compelling, timely, and relevant manner.

What’s more, technologies must enable marketers to interact across inbound as well as outbound channels in an integrated way. Enter next-generation campaign management.

Characteristics of Next-Generation Campaign Management

Helping marketing organizations achieve this transition requires marketing technology providers to step up and outside the box. Campaign management is no longer about segmentation and list pull. Next-generation campaign management technologies must emerge that:

  • Are customer-aware. The key to listening is the ability to capture what a buyer is saying — both explicitly and implicitly — and to process that information to determine what to say next. This requires a campaign-management solution that has the capability to leverage and process both a customer’s past history, as well as present situation, in order to make predictions about likely future behavior.
  • Provide centralized decision making. Capturing both what the customer says, as well as how he responds to what you say, is fundamental to the shift to interactive marketing. That means next-generation campaign management solutions must provide a centralized decision-making capability that determines the best marketing message to extend in outbound and inbound marketing channels — online and offline.
  • Enable cross-channel execution. Your buyers interact with you across multiple channels and expect both a consistent and seamless experience as they move between channels. Anyone involved with a customer experience initiative knows this is a hard problem to solve. Next-generation campaign management solutions can help. By enabling cross-channel (inbound/outbound, online/offline) execution and providing the fundamental capability to compile a comprehensive marketing communication and response history, next-generation campaign management can help drive message and treatment consistency as well as a seamless experience as customers interact with the enterprise.
  • Integrate marketing operations. In any mid-sized or large company today, effective interactive marketing along the lines of what I’m describing has a lot of moving parts and requires collaboration across many disparate groups within the marketing function. To ease these challenges, next-generation campaign management must help marketers improve collaboration and facilitate cross-channel planning, design, execution, and measurement.

Fusing Relationship Marketing And Online Marketing July 22, 2008

Posted by Elana Anderson in Database Marketing, Integrated Marketing, Marketing Strategy, Online Marketing.
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For nearly the past 15 years, my career has been focused on helping marketers leverage data to better understand and more effectively market to customers on an individual level. In my early days in the industry, I worked primarily with marketing groups leveraging offline channels like catalogs and other forms of direct mail. In recent years, I’ve spent most of my time working with relationship marketing and database marketing groups and with online marketing groups. What amazes me (and is my key topic of my post today) is that while these marketers view themselves as so different they are really starting to converge.

Marketing Channels Are Evolving

There’s lots of change happening in the marketing domain. It’s a time of uncertainty but also one of opportunity.  Marketing channels are evolving at a rapid rate:

  • Mass media is less and less effective as audiences fragment and adopt technologies and tools (like DVRs) that enable them to tune out ads.
  • The Internet is no longer “new media” since most consumers are online.
  • Traditional outbound direct marketing channels require more analytic sophistication as response rates decline and more states consider and adopt privacy legislation.

Addressability Is the Common Link

Addressable channels are channels both outbound and inbound – through which marketing can communicate directly with an individual – identifiable or anonymous. This includes traditional direct marketing channels including direct mail and phone, internet channels like Web sites, email, mobile, and social media and, as technology and distribution capabilities continue to evolve, even traditional mass marketing channels like TV, billboards, and radio.

As addressable channels become more prevalent, marketers are recognizing that they need new skills to effectively engage, communicate, and interact with customers. Specifically, marketers must:

  • Listen to all information provided by customers and prospects – both explicit and implied.
  • Understand past and present information to determine the best possible marketing action.
  • Communicate in a compelling, timely, and relevant manner.

What’s more, marketers must do this across inbound as well as outbound channels and in an integrated way.

Interactive Marketing Will Emerge As A Dominant Marketing Discipline

I believe that the best term to describe the fusion of these capabilities is “interactive marketing” which I will define as:

Engaging each customer and prospect in a cross-channel dialog that builds upon their past and current behavior.

Although the term isn’t new, few (other than Prof. John Deighton of Harvard who is widely credited with coining the term) define it as broadly as I have here.

What’s interesting is that, in many organizations, the required capabilities already reside in different parts of the company – relationship marketing, database marketing, online marketing, ecommerce, etc. Unfortunately, rather than integrating these skills many of the companies I talk with are adding duplicate capabilities within stovepipe marketing groups. The result? A widening gap between “online” and “direct” marketing functions.

Rather than continuing to grow the silos, companies should explore cross-training, opening lines of communication, and integrating marketing teams that communicate with customers via addressable channels.

Technology’s Role In Differentiating Customer Experiences April 29, 2008

Posted by Elana Anderson in Customer Experience, Database Marketing, Integrated Marketing, Marketing, Marketing Technology, Online Marketing.
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Marketing organizations are contributing to customer experience initiatives by working to deliver more relevant content in both outbound and inbound channels. While technology is certainly no silver bullet, marketing organizations are turning to technology to help them:

  • Automate. As marketing organizations seek to deliver more relevant and individualized customer experiences they begin to change their marketing communications mix away from a pure outbound push model to incorporate messaging tactics driven by customer behaviors and actions. In addition to being very responsive to the customer, these tactics are ideal because they can be automated. Today’s campaign management solutions are maturing beyond support for the traditional push campaigns to facilitate campaign automation through functions like real-time data integration and event detection, multi-stage campaign process flows, and business-rule-driven automation.
  • Collaborate. Relevance is not just about the message. Relevance requires an equal focus on time and place. And, when considered from the customer’s perspective, relevance is inherently multichannel and integrated. As marketing organizations work to increase their relevance, become more customer-focused, and create differentiated customer experiences, they will need to collaborate more – a lot more – with other marketing teams and with other functional areas of the company (like customer service). Marketing resource management technology can help facilitate collaboration by providing a consolidated marketing calendar, establishing common work areas for virtual teams, and facilitating processes, as interdisciplinary teams work to design, build, and launch integrated programs.
  • Integrate. Integration is a fundamental requirement of relevant marketing. Whether it is integrating disparate data from various systems across the enterprise or integrating teams to streamline marketing processes, technology is required. Moreover, marketing application suites that are themselves integrated and support the entire marketing process – from planning through design, execution, and measurement – can dramatically simplify the complexity that marketers face as they work to become more relevant and customer-focused.

Marketing Organizations Must Increase Their Technology IQ

Just as technology is a critical enabler of relevant marketing, it can also be a major barrier. Why? Many marketing organizations don’t take enough ownership of technology. Marketers – and the technology groups that support them – must recognize that technology is a key component of marketing operations – that relevant marketing requires day-to-day access to data and iterative levels of analysis, needs not well-met by traditional project-focused IT organizations. Marketing organizations that want to differentiate customer experiences through customer-focused and relevant marketing communications and content delivery must bring technology expertise under the umbrella of the marketing organization – either internally or through a trusted services partner that behaves as an extension of the marketing team.

My Latest Research: Marketing Beyond The Status Quo April 23, 2008

Posted by Elana Anderson in Customer Analytics, Customer Experience, Database Marketing, Integrated Marketing, Marketing, Marketing Technology, Online Marketing.
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I am very excited to announce the launch of my latest research, “Marketing Beyond The Status Quo.” The research, sponsored by my friends at Responsys, seeks to help marketing organizations assess and address the barriers that prevent them from being more customer-focused, relevant, and integrated. The report unveils the Marketing Status Quo (MSQ) Model – backed by a diagnostic self-test and step-by-step program guide – to help marketers determine their relevance maturity and develop a realistic action plan to become more customer-focused.

The MSQ Model assesses the fundamental competencies required for marketing relevance:

  • Strategic: How customer-focused are your marketing efforts?
  • Analytical:How strategic and actionable is your customer insight?
  • Technical: How well-suited is your infrastructure to support customer-focused marketing?
  • Process: How collaborative, efficient and error-free are your marketing operations?

MSQ Model

Each competency is equally weighted and combined to yield an overall Relevance Maturity Score, which defines a MSQ Level ranging from 1 (broadcast) to 5 (integrated). Marketers can leverage the model in conjunction with the MSQ Self-Test to assess their status quo, as well as identify the steps they must take in order to successfully move to the next level. 

For a free copy of the full report, visit www.responsys.com/beyond. I hope that you will find the research interesting and the tools useful. If you have any feedback, please don’t hesitate to comment here or contact me directly.

See you in LA next week? April 1, 2008

Posted by Elana Anderson in Customer Analytics, Customer Experience, Database Marketing, Integrated Marketing, Marketing, Marketing Measurement, Marketing Strategy, Marketing Technology, Online Marketing.
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Busy, busy, busy! That’s the month of April for me. Sorry I haven’t been posting the last couple of weeks, but I have a ton of balls in the air at the moment. One of the major things I’ve been working on is a minor treatise aimed to help marketers systematically improve the relevance of their customer communications. My work on this whitepaper, “Marketing Beyond The Status Quo,” is sponsored by the good people at Responsys and we’re planning to unveil it together next week at Forrester’s Marketing Forum in Los Angeles.  Our session is Tuesday, April 8th at 2:25pm. I’ll be presenting along with Scott Olrich (Responsys’ CMO) and Randy Cuff (Director of CRM Development at Intrawest). Here’s the abstract for the session:

Few interactive marketers are ecstatic about their ability to deliver meaningful and timely marketing messages. In fact, most agree that more relevant and timely marketing communications will be better received by customers and increase response rates. However, when time is scarce, budgets are tight, and single channel campaign management solutions are already integrated and delivering ROI, marketers are hard pressed to change the status quo. In this thought-provoking session, Elana Anderson, former Vice President and Research Director leading Forrester’s marketing practice, and Scott Olrich, CMO of Responsys will unveil the findings from a first-ever study identifying the drivers of the “status quo” paradigm, and reveal the strategies and marketing technologies smart marketers are using to deliver superior marketing performance and ROI across channels.  

If you are attending the forum, please stop by our session. I’ll be there for the full two days, so drop me an email if you want to connect at some point during the event. Hope to see you there!

Recalibrating The Meaning of “Relevant” March 11, 2008

Posted by Elana Anderson in Customer Experience, Database Marketing, Integrated Marketing, Marketing, Marketing Measurement, Online Marketing.
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Have you ever refinanced your mortgage only to be bombarded by offers to lower your mortgage rate for six weeks after you closed on your new loan? This happens because financial services companies are purchasing “triggers” from credit bureaus that indicate you have had a recent loan approval. The problem with these triggers is that they are not timely. By the time the marketing communication gets to the customer, it’s too late.

Relevance = right message + right time + right place

Perhaps it is a cliché, but it’s a good one. Too many marketers focus entirely on the message component of relevance. For these marketers, “place” is typically an outbound channel and “time” is based on the internal campaign calendar – not the customer’s needs. To be relevant, marketers must step outside the confines of the functional silo that they are responsible for and think outside in – from the perspective of the customer. In addition to targeting the message itself based upon a customer’s stated or implied needs, relevance requires:  

  • Timely reaction or response to customer actions. Although some marketers are experimenting with trigger-based communications and on-site customized messaging, the prominence of these tactics pales in comparison to the weekly or semi-weekly campaign pushes. The beauty of these tactics, however, is that they can be automated.
  • Cross-channel integration. Your customers don’t care that you are only responsible for email and not the website or direct mail and not the call center. When a potential customer clicks on a search result or an online ad and lands on your generic home page or receives an offer in the mail and calls customer service to inquire further, he expects a seamless handoff. Yet, creative elements often dominate conversations about integrated marketing rather than a focus on what the customer is trying to achieve as he traverses the channels. The result of this oversight? For the customer, it often means dead ends and unnecessary frustration. For the company, it means lost opportunities and, possibly, damage to the brand.
  • A programmatic approach. Did you know that maximizing individual campaign response might be to the detriment of overall program ROI? That’s right. Sending more messages may generate a higher response, but how many others are simply tuning out? The current industry standard in the retail sector is 1-2 email messages a week. Amazon differentiates itself in the inbox by not always being there. An email offer from Amazon might be, “A brand new Leonard Cohen CD is available. Since you have enjoyed Leonard Cohen in the past, we thought you might want to know…” This programmatic approach requires different metrics than the campaign-centric approach – for example, program engagement over time or revenue per customer (not campaign).

CPM Pricing Is To Blame For Bad eMail Marketing March 4, 2008

Posted by Elana Anderson in Customer Analytics, Database Marketing, Marketing Technology, Online Marketing.
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One of the issues I am currently working on is to understand what it takes email marketers to move beyond “fire and forget” (or “batch n’blast”, whatevah) marketing. I find that while marketers intellectually agree that more targeted, timely, and relevant email communications will be better received by customers and increase response, basic economics is a major barrier to progress in that direction. Why? Because email marketing is so darn cheap that every campaign delivers ROI – even if the campaign is totally untargeted (You ever wonder why spammers still spam? They make money doing it).

Relevance Isn’t Free

I’ve spoken with a few dozen email marketing leads from large companies and strong brands in recent months. Their hearts and minds are in the right place. Broadly speaking, they:

  • Are concerned about opt-outs, unsubscribes, and long-term engagement with their email programs.
  • View email as a tool to develop customer relationships.
  • Are working hard to employ tactics – like multi-layer targeting, segmentation, and event triggers – to improve the relevance of their communications.

Unfortunately, as these marketers strive to improve their email communications, they inevitably run into a series of challenges including:

  • Availability of timely, high quality data
  • Access to skills that know how to turn data into actionable information
  • Operational knowhow to automate data-driven processes

Wait… I’ve heard these problems before! In the 1990’s, when I worked with catalogers, financial services firms, and telcos to build some of the first big database marketing environments. Interactive marketers today sound just like big direct mail marketers did then.

Unfortunately, for the interactive marketing folks, the similarities stop there… Even though the highest percentage of upside from a marketing database typically derives from new streams of revenue, direct mail is so expensive that the mailers can justify a marketing database and a top-notch analytics team to help manage costs. Unfortunately, since email marketing is so cheap, interactive marketers can’t make the same argument.

Email Marketing Grew Up Out Of Advertising, Not Direct Marketing  

Email CPM (cost per message) pricing was borne out of mass advertising which has historically focused on how many eyeballs see a message. Take a huge list, send the same message to everyone, and pay volume pricing – the more you send, the cheaper it is. OK – perhaps this made sense in 1997 when email marketing was a novelty but, let’s be honest, this pricing model is totally out of whack with how marketers want, and need, to leverage email today.

To their credit, leading email marketing service providers (EMSPs like Responsys, e-Dialog, Epsilon, and Cheetahmail) have been actively working on the applications that they provide to deliver:

  • Access to a richer dataset.
  • Tools that support data slicing/dicing and more granular targeting.
  • Improved campaign design and management functionality like event detection, rule- based dynamic content and dialog campaigns, and improved campaign automation.

But, as these vendors work diligently to provide their clients with the tools that they need to deliver targeted, timely, and relevant communications, they consistently struggle with downward pressure on CPM rates (which, today, are fractions of a penny per message). Last week I spoke with the CEO of a leading EMSP who told me that no matter what pricing elements they propose, prospects consistently turn the pricing into a CPM calculation to compare competitive vendors.

The Cost Of Relevance

While I am all for generating healthy competition amongst vendors, companies need to understand that boosting the relevance and sophistication of their email programs comes at a cost. What are the major cost components?

  • Analytic data mart: A “data sandbox” that provides an area to explore data, profile subscribers, analyze behavior, and identify key pieces of data that can be leveraged to increase the success of your email programs.
  • Analytics team: You have a sandbox, you need people that know how to play in it, develop business hypotheses, predict results, etc.
  • Marketing database: Different from the analytic sandbox, this operational marketing database is a simplified data structure and only incorporates the data required to define, execute, manage, and measure current email programs.
  • Campaign management and automation tools: These tools sit atop the marketing database. Marketing users (or service provider staff) leverage the tools to define, automate, and execute campaigns.

Recognize that all of the things I note above can vary dramatically in cost and scope and can be achieved in different ways:

  • In partnership with an email service provider.
  • In partnership with other providers (e.g., database marketing services providers like Merkle or Epsilon).
  • If you have the in house skills, internally in your own shop with support from your IT group.
  • A combination of the above.

Which way to proceed depends on a number of factors that I will be happy to address in future posts. But, the key point is… If you don’t do these things somewhere, you will not be able to improve the relevance and sophistication of your email programs.

Is eMail Doomed As A High Quality Relationship Marketing Channel?

Ultimately, I am trying to help email marketers build a business that will help them increase the revenues and longevity of the email channel. That case requires investment in improved data capture, data integration and management, and data analysis capabilities – all of which cost money. Email marketing specialists with deep knowledge of the channel are in a great position to offer these capabilities, but these vendors are stymied by CPM pricing. What will it take to truly move email marketing beyond its position as just another “mass advertising” channel?

Demonstrating The Brand Value Of Email January 29, 2008

Posted by Elana Anderson in Customer Analytics, Database Marketing, Marketing Measurement, Marketing Strategy, Online Marketing.
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I had the opportunity to catch up with Robert Raines, VP of Product Management & Creative Services at E-LOAN last week. I first met Robert several years ago when he was getting the company’s email programs off the ground. Robert shared with me some of the things that he’s accomplished since we last spoke and, as always, he had some great insights.

E-LOAN wanted to evaluate the impact of its email program 

Robert is a firm believer in testing and, more specifically, using control groups to measure the impact of email marketing activities. To determine the long-term benefit of its email program, the E-LOAN team created a randomly selected universal control group. While the control group still received transactional email communications (e.g., “We have received your application”), it received no email marketing treatment whatsoever for a period of 18 months.

To ensure that individuals selected into the control group were excluded from all email marketing efforts, the team created an exclusion table in its marketing database and automatically excluded the control group from any database extracts that were sent to its email service provider (Responsys).

What E-LOAN learned

What was E-LOAN looking for? The company wanted to evaluate the application rate of the mailed population vs. that of the unmailed population (the control group) over an 18-month period. As you might expect, at the beginning of the test there was very little difference in the application rate of the two groups. But, over time, the emailed population had a significantly higher application rate. So much higher that, according to Robert, the difference alone is enough to justify the total annual cost of the company’s email program.

Robert is also quick to point out that it’s not just about being in the inbox that matters. The E-LOAN team works hard to ensure that its email program is relevant and it uses a mixed strategy that includes broadcast messages (e.g., “The Fed has lowered interest rates”) and highly targeted, event-triggered communications.

Recommendations

Email marketers often complain that they don’t have enough staff and struggle to manage what’s already on their plate given the staff that they have. I believe that this complaint becomes a self-fulfilling prophecy… Email is cheap, just blast it out, and we’ll keep the bare bones operation going… To break through this cycle, email marketing managers should:

  • Devote 6-8 hours of the team’s time to implementing a test and measurement strategy. As a manager myself, I know that it’s possible to squeeze some amount of extra time out of the week. If you are really committed to making email marketing more strategic in your company, find 15-20% of someone’s time and focus it on test and measurement as Robert has done at E-LOAN. Sure, the E-LOAN test that I’ve shared here took 18 months, so start with something smaller. For instance, test the difference between a broadcast newsletter and a newsletter with dynamically targeted content.
  • Trend results over time. A quick test to show that targeted content generates higher open and click rates is indeed interesting. But, it’s more interesting to trend this information over time to evaluate the sustained value of a targeted vs. untargeted program.
  • Document a business case. If your goal is to improve the internal stature of your email efforts, get more budget, and grow your team, then it’s imperative to document your case. Avoid doing this at an individual campaign level and comparing metrics — like opens and clicks — against industry averages. Focus on the bigger picture and build a case that exposes the real business value of your efforts. What is the ROI of targeted vs. broadcast communications? Or, as in the E-LOAN example, do your customers buy more if they receive email marketing communications from you? This is the kind of case that your bosses need to free up more resources.

What To Expect From Your Web Analytics Tool (Web Analytics Series, Part 2) January 15, 2008

Posted by Elana Anderson in Customer Analytics, Database Marketing, Integrated Marketing, Marketing, Marketing Measurement, Marketing Technology, Online Marketing, Web Analytics.
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In my post just before the holidays, I shared a framework to help marketers think about how web analytics contributes to data-driven marketing effectiveness over time. Marketers agree that they want to deliver more relevant and timely communications, establish a two-way dialog, and generally be more customer-focused and integrated, but many are struggling to make positive progress. Use the framework to understand understand the maturity of your data-driven marketing practices. Then define your objectives and timeframe for making incremental progress. In this post, I want to discuss how marketers can use their placement on the framework to define the key requirements for their web analytics tools. I work with an awful lot of firms out there that are not getting the benefits that they should be out of the technologies that they purchase. Why? Well, I think one key reason is that they are overly aggressive in their expectations of what they will achieve and over what time. The result is a lot of wasted technology — and wasted time.

Web Analytics Maturity Framework

If we were more realistic about what we are trying to achieve (i.e., the business outcome) with our web analytics tools then I believe our learning curve around how to effectively understand and leverage the data would actually accelerate. Why? Because we wouldn’t be constantly struggling with the technology. The free tools on the market are getting better and, while they are not sufficient for marketers that are beyond Stage 1 maturity, they will meet the needs of many. Here is a starting point to help you get beyond vendor eye candy and align functional requirements with business objectives:

Stage 1: Site analysis

Key questions you need to address:

  • How many visitors are coming to my site?
  • How are visitors using my site?
  • How are visitors finding my site?

Core functional requirements:

  • Visitor analysis
  • Referrer analysis (pages and keywords)
  • Strong library of parameterized “out of the box” reports

Comments on the market: These capabilities are table stakes to enter the web analytics market and most of the solutions out there do a reasonably good job here. Expect a more limited library of reports and more limited customization features from the free tools.

Stage 2: Site optimization

 Key questions you need to address:

  • How can I increase site visibility?
  • How do content and taxonomy influence desired action?
  • What would improve site navigation?

Core functional requirements:

  • Path analysis
  • Page and scenario drilldown analysis
  • Drop-off analysis
  • A/B and multivariate testing

Comments on the market: This is currently an area of focus for leading vendors in the market. The once-standalone optimization players – like Offermatica (acquired by Omniture), Kefta (acquired by Acxiom), and Optimost (acquired by Interwoven) – have been acquired and other vendors are looking to add these capabilities through acquisition or organic development. Given current client emphasis on customer experience management, expect this to continue to be an area of hot competition in the near future.

Stage 3: Segment targeting

 Key questions you need to address:

  • How can I logically group site visitors?
  • How can I target visitor content by segment?
  • How can I leverage site learning in other communication?

Core functional requirements:

  • Segmentation model templates
  • Ability to persist segments
  • Ability to create dynamic segments and apply them historically

Comments on the market: Leading web analytics vendors like Coremetrics, Omniture, Unica, and Visual Sciences (acquired by Omniture) offer segmentation capabilities but this is an area where vendors differentiate.

Stage 4: Individual customization

 Key questions you need to address:

  • What is the best content for an individual based on prior site interaction?
  • Should I reach out to an individual customer NOW?

Core functional requirements:

  • Individual visitor profiles retained over time
  • Ability to match profile to current visitor context – in real-time
  • Ability to unify profiles when visitor identifies

Comments on the market: A few leading vendors are really just starting to focus here. Omniture’s recent acquisition of TouchClarity is a good example. Unica is also working on integrating it’s web analytics and campaign management modules in a meaningful way. But, overall, the vendors are just getting started at figuring this out.

Stage 4: Integrated marketing

 Key questions you need to address:

  • How are customers using online and offline channels in the buying process?
  • How can I optimize online and offline interactions?

Core functional requirements:

  • Calculate and retain key profile metrics
  • Track metrics longitudinally
  • Open data model and facilitation of extracts to other systems

Comments on the market: Today, you’re mostly at the mercy of your internal IT shop when it comes to the level of data integration sophistication required to help marketers in large companies integrate their activities across channels. Some firms call upon their interactive agency, systems integrator, or database marketing service provider to help. But, each approach has its challenges. It may make you feel better to know that no one has nailed this one and that gives us all something to aspire towards. At the end of the day, I believe that if the web analytics vendors want to be part of the solution then they need to hire (or partner) with database marketing gurus in order to make real progress.