5 Stages of Marketing Maturity: Spend Less and Get More With Customer Analytics

Getting a customer’s attention used to be about being louder and edgier than the other guy. Marketers still pump a ton of money into engaging customers, only now, they’re using advanced analytics to spend less and get better results. PivotLink’s Joe Dalton discusses how retailers are evolving their strategies in this month’s RIS Magazine Tech Solutions Guide, “Smarter Insights, Smarter Strategies”. What stage of maturity has your marketing organization reached?

Q: What is Marketing Intelligence?
Joe: Marketing Intelligence is the analytic layer that sits between your data sources and your operational marketing systems where you strategize and plan. On average, we see marketers use four to seven operational systems to interact with customers in areas like email, display, social media, mobile, campaign planning and budgeting/spend planning. The more analytic complexity you introduce, the more mature your marketing organization becomes and the more business value you deliver.

Q: Where do you start?
Joe: The first stage of marketing maturity is getting your data in one place (e-Commerce, offline POS, customer profiles, marketing activity, cost/financial data and third-party data). Once your data is centralized, you can look at your business from many directions and understand who your customers are and what they do. Marketers have figured out that we are what we buy, not who we say we are. As your marketing maturity enters stage two, you begin to develop segments to understand the profile of new customers and their preferred engagement channels.

Marketers see a huge drop-off from first time buyers to second time buyers to repeat buyers, so it’s key to understand how and what to communicate that will make them a loyal customer, and how to re-engage inactive customers. To drive their second, third and fourth purchase, or to bring them back, you have to know something special about your customers.

Q: What are some best practices?
Joe: We believe it’s important to figure out the customer segments you should be tracking all the time. We recommend six to twelve – enough to compare segments and drive insights, but not so many that you can’t take action. As you move up the maturity curve, you can then focus on marketing attribution in stage three. Your data is integrated, your segments are defined and you can add analytics to explore how email is driving offline sales, and whether Facebook ads are working. At the end of the day, marketers need to know how their marketing stacks up across all channels and where to turn the dial up and down. Attribution is where you start to intelligently adjust your marketing spend and maximize the bang for your buck.

It pays to have the cost and financial data in the mix in stage four when you need to answer a typical CEO question, like “If I give you an extra one percent in marketing budget, where would you spend it and what’s it going to produce in revenues?” All channels are not created equal. When you compare the break-even point of customer acquisition and map it to the lifetime value of your customers, you begin to understand the value of that incremental spend on one acquisition channel versus another. I like how retail expert Shelley Nandkeolyar puts it: “How do I spend less and get more?” That’s what this is all about.

Q: What’s the pinnacle of customer analytics?
Joe: Predictive analytics delivers huge business value. Our approach is to offer significant value and return with solutions that are affordable and usable by marketers every day. Stage five helps marketers understand what’s happened in the past and what’s likely to happen in the future. It offers marketers leading indicators on what their customer base, by segment, is about to do next. Seeing customer data light up with these answers changes the game in retail.

Joe Dalton is Chief Product and Marketing Officer for marketing analytics leader PivotLink (www.pivotlink.com). Learn more by watching Joe’s presentation on the 5 Stages of Marketing Maturity. His session and slides from the 2013 Marketing Intelligence Online Summit are available on-demand along with demos of the analytic applications retailers of all sizes are using to improve marketing results.

Download the RIS Tech Solutions Guide, “Smarter Insights, Smarter Strategies.”

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