Navigating Big Data

Tesco famously has ‘segments of one’. Which is lovely of course - but they had to buy a data company just to make sense of the data so they could get there. Most of us don't have that luxury. But it doesn't mean we can or should ignore data, even if it looks like it might become unwieldy.

Some brands haven't yet realised that the power in a brand/customer relationship has shifted from the marketer to the marketee. Clearly however social media and the ability to share every thought, spoken or unspoken, with friends and peers and even the whole wide world means that the brand perception is out in the wild. It's been let loose. No longer is the way your brand is represented in your control. It's in the expressions of passion, ire, indifference and ephemerality of the digital ecosystem: Facebook, Pinterest, Snapchat, Twitter, Vine, even email. It's transmitted by mobile, stored on the web, and available to the world.

Your job as a marketer is to understand that this revolution has already happened. And to take advantage of it. If you can do it successfully you can catch up with the wild thing your brand has become, and even gain competitive advantage while your peers wrestle with boards who just don't get that they're no longer in control.

Scary thought?

So what do you need to do in order to flip the situation around? Well, part of the problem is the notion that we can regain control. I don't think we can. What we can do however is map how consumers behave, and indeed how their attitudes will shape how they behave in the future. By going down this route rather than trying to gather the brand in, you can extend the brand into the customer's territory, give them more control by enabling free interpretation of the brand's essence. And that takes not only courage, but data too.

Customer insight is the product of data. The three dimensions of segmentation (what we call 3D Segmentation) are:

• Demographic - who the customer is;
• Behavioural - what they do and have done;
• Motivation - why they do it. 

Demography is slow moving, so we use it as a kind of snapshot to describe people. It means we can target them accurately. Behaviour is retrospective, but we can observe behaviours and trends and make extrapolations based on probability and this gives us propensity models. This means we can target them efficiently. The final dimension is about motivations, attitudes and 'need states'. Sports brand ASICS leverages this in its MyASICS loyalty programme: by understanding why a runner runs, we can talk to them in terms that resonate… the desire to be fitter, or to win, or to raise money for a cause. By talking to its customers about those things that address their motivation, ASICS creates extreme loyalty, increasing sales. Worldwide. And MyASICS is served by a website, and emails, and mobile. All of which feed back data so we can hone the programme.

These days the various digital channels are so well established that the mechanisms that allow you to track a customer in their journey in one can easily be joined with the mechanism in all the others. It means we can effectively create a joined-up process to track a customer across all digital channels as they weave about their daily lives. This ability extends even to the real world - we work with clients who have incorporated data from electronic point of sale (EPoS) systems into their customer view, so we can attribute till sales to pay per click (PPC) campaigns and journeys via every imaginable digital touch-point.

And it's not that difficult, and you don't need to buy a DunnHumby or a data team to do it. The concept of rapid prototyping has been very successfully applied to creating online customer labs and pilot programmes. For instance, brands like Bupa have used it incredibly effectively to build online communities at very low cost before making decisions about major investment (my agency, Underwired, created Bupa's Carewell using this rapid prototyping approach – saving the client around £150,000).

Forget the Single Customer View and its squillions in Capital Expenditure; rope together several separate systems based only on those components you actually require to do the job of proving return on investment (ROI) and use it to monitor customer behaviour in response to the insights you generate from simple data analysis. In my experience six or seven segments gets the job done - segments of one are for when you're already at the outer extremes of wringing profit from data and not when you're mid-shift towards putting your customers at the centre of the brand universe.

Underwired caps incredible month with RAR finalist place

Underwired, the leading eCRM and Customer Engagement agency, has been shortlisted in the Recommended Agency Register (RAR) Awards.

The awards recognise the agencies that have been highly-rated by their clients and to date, over 14,000 customers have rated the agencies they work with. The awards are a reflection on an agency’s ratings across a number of areas including Creativity, Effectiveness, Value for Money, On Time/On Budget and Client Service.

This news comes on the heels of an incredible year for Underwired, which now counts Marks & Spencer, Mitchells & Butlers, Travelodge, British Land, ASICS worldwide, East Coast Railways and the Financial Times among its clients. Less than a year ago the management team led by Jason Holland and Felix Velarde took the agency independent, and in the past month Underwired has won over £1m of contracts.

Jason Holland, Underwired’s co-founder and creative director, said “This reflects Underwired’s culture of partnership and collaboration, and in particular the rapport the client services team has built with our clients. We do business-critical, highly strategic work, and that demands genuine trust. That’s built on a foundation of value for money and doing stuff right and on time – but it’s also partly a reflection of the passion we have for the work we do with our clients.”

The advent of Customer Engagement Marketing

We went through a recession, and while we weren’t looking, the world of marketing changed. We discovered as an industry that making certain that marketing governance is based on sound principles is critical in a recession. Digital marketing, with its granular tracking and ability to follow a customer from first contact, means you can observe his or her behaviour while they consider their first purchase and beyond. When digital marketing is joined up correctly, you should be able to establish precisely how much value you generate for every pound that you spend. And this accountability, during the recession, meant a degree of comfort that marketing actually was working. In other words, we gave credence to – and then priority to – marketing which has built into it a chain of custody.

The traditional view of brand marketing was centred around the way the business wanted to engage customers. To some extent, in the early days of internet-based marketing, this notion of brands built around customers’ needs was lost, at least temporarily. It became ‘build it and they will come’ – a conceit founded on the novelty of the medium: indeed, when I set up my first digital agency there were around 250 servers on the World Wide Web. Attendance and engagement could be reliably assumed.

The idea of a brand built around what the customer wants has of course changed as a result of the mediation of the internet. The customer is still at the centre of the business’s universe, but this position has evolved. Marketing, once predicated on understanding demographics, motivation and behaviour, can now be said to pivot about which channel the consumer is (or may be) consuming at that precise given point in the customer lifecycle when they are considering a step in their dialogue with the brand.

In simple terms, where once we considered marketing to be about mapping the progression from one medium to the next (TV followed press and PR, followed by Direct Marketing) this new age means we map the customer as she travels from mobile to Facebook, email to website and via SMS to shop.

In turn, this must be mapped against the decision-making cycle: first contact to second, peer review then press review, comparison sites, reminder banner, examination of features, emailed offer then shopping basket. We end up with a two-track series of events, joined at critical touchpoints which define the medium in which we pass on a specific, perfectly-timed message.

This form of marketing planning is necessarily going to be slightly different from segment to segment (a young mum’s media consumption is going to be radically different to that of a Baby Boomer), and from product to product. But the framework is sound, and applies as much to a high-value B2B proposition as to an FMCG brand – in fact we’ve used it for products as diverse as McCain oven chips, ASICS sportswear, Travelodge and the FT. What it delivers is a rational, measurable chain of custody from first contact to value. From this continuous sequence comes your brief for the messaging at each touchpoint, a detailed resource requirements list, indeed a foundation for micro and macro KPIs.

This new post-recession type of marketing is called Customer Engagement Marketing. It takes the power of the brand, dethroned by a combination of recession and digital renaissance, and refocuses it on the customer. In essence, it recognises that the customer is now the centre of everything, and that our job as businesses is not just to design our products around them but to design our marketing around them too.

Evidence-based marketing: myth or reality?

Apparently a Facebook ‘Like’ is worth £7. Isn’t that brilliant? If you have a hundred thousand followers that makes your social media strategy absolutely rocking news. The question is, says Felix Velarde of digital CRM agency Underwired, how many of you really believe it?

We ran a campaign for an FMCG client a while ago, in which we emailed a segment in the customer database using very specific messaging – it was relevant, timely and well-designed. The click-through rate (CTR) of 88% was staggering in anyone’s book. I’d like to say every campaign we run gets that kind of result, but occasionally we crash and burn too. Anyway, wow, what a great result. But what does it mean?

The digital marketing industry seems to be founded on metrics and key performance indicators (KPIs) of variable – if not downright dubious – quality. If you judge any of the industry awards you will know that half the entries benchmark against industry standards which in a lot of cases appear to have been made up on the spot: “Campaign X achieved a CTR of 12.3%, beating the industry standard 8% and therefore deserving of a Gold.”

This is where I have the first of my issues: even if there *is* an industry standard click-through rate, does it really apply to your campaign? Our campaign got an 88% CTR because it was highly targeted to a known audience expecting the email with a fantastic proposition. If it had achieved 12.3% or even 24.6% it would have been a failure. The truth is that no matter what the CTR is, one thing it is not is evidence of anything that isn’t either subjective (“I say, that’s awfully good isn’t it?”) or comparative (“Blimey, did much better than last time!”).

The second of my issues is that all these benchmarks aren’t evidence of sales. And hard revenue really is the only figure that ever matters (and before you ask about brand consideration or sentiment, these are both abstractions of sales – higher brand consideration may imply higher resulting sales, though you’d have to test it to find out if it’s really useful). So what is the *evidence* behind the assertion of success? How do you track from the planning phase through the campaign, to the reality of the effect on sales?

Well, it’s pretty easy in e-commerce. Straight-through processing (which is what the financial industry calls tracking the customer from first contact to order) in digital is quite simple these days. Ad tracking (display, affiliate, PPC and natural SEO) is relatively easily linked to website analytics, thence to email service providers (ESP), back to websites and even passing through couponing and promotion systems. It’s been done plenty of times by the big brands, and even small brands can buy integrated services. So if you’re an online retailer it’s pretty straightforward.

If you’re an FMCG brand you can still do it, although you may need to be a little more sophisticated about it. For example, this might mean matching your customer segments to commercially available purchase data and running regular surveys to track buying patterns in your base and cross-checking them against buying behaviour. If you’re a retailer you can find mechanisms to collect customer data and purchase behaviour at Point of Sale and match this data back to the single customer view.

The trick here is to get real data about whether your campaign actually worked, as opposed to seeing floating KPIs that may or may not indicate the same thing – but which provide no scientific basis for decision-making. How many times have you seen “successful” campaigns stopped? There’s a simple reason: there was no evidence to show they generated a profit. If there had been and they had produced £26 for every £1 spent, nobody in their right mind would stop them. Evidence is critical. Myth or reality? Evidence-based marketing is the only thing you should be *allowed* to do!