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.

Blockbuster, Jessops, HMV... but who's next? WHSmith, we're coming for you

Guest post by Alice Baker, Account Manager at Westgate Communications 

It was a tragic day and a clear sign of the times when a British institution like Blockbuster finally shut it’s doors. I’ll never forget the day my mum took me into the store to purchase Beauty and the Beast (a classic I might add) on VIDEO for my Birthday; something she had to pre-order because it wasn’t available elsewhere. Clearly, I’m showing my age, but the memory still makes a distinctive point - we needed Blockbuster in our lives. Disney is very important to a five year-old.

Fast forward twenty years and I enter that famous store again, this time for another classic: Reservoir Dogs. “Sorry, we don’t have it” the shop assistant replied. Angered by her indignation, her shrug, and by the fact there were 47 useless copies of Bridget Jones’ Diary strewn around the store, I realised Blockbuster had finally become disillusioned by what its customers wanted. It was also clear that I no longer needed the store; for Disney or Tarantino, it didn’t matter. Streaming became the way forward and quite honestly, I’ve never looked back.

A dissatisfied customer I may be, but the point that it makes is that in the last five years the consumer power of our UK high-streets has now shifted from retailer to customer. Blockbuster no longer had what I needed - availability of films, knowledgeable staff etc. - so I went elsewhere.  Understanding what your customer needs and what your USP is, is essential for maintaining customer loyalty. Adapting your retail channel to suit these needs is also vital because consumers appreciate retailers being considerate to their needs.

So who’s next to go? I’m hedging my bets - or should I say hopes - on WH Smith. Here is a store which epitomises all of the issues above. It’s expensive, it has no USP - does it sell books, sweet or arts and crafts materials? And the staff seem adamant on selling me a giant bar of Dairy Milk every time I purchase a lottery ticket. The staff are generally unfriendly and mostly unhelpful and their website seems to offer the same service too as its far from intuitive; so why oh why has it survived at the forefront of British retailing for so long?

As digital books sales with the likes of Amazon and Kobo continue to rise how much longer can WH look to hold on?

2013 will be the year of Total Customer Engagement

The year ahead will be marked by a number of really interesting developments in how we engage with our customers. One that has caught up with us – and which marks a sea change – is the advent of the Generation Y customer base. Gen-Y uses mobile as its main medium of interaction; if you’re not using mobile to engage with younger customers then you’re probably missing the biggest trick available, though it has been a very slow start since the trend first became apparent five, or so, years ago. Just in passing, to give you an idea of how trends break, let me illustrate this briefly…

Imagine your customer base is, potentially at least, a million strong. And say on day one a single person uses mobile as their main device for browsing the web, and every day that number doubles. By the end of the first week, 64 people use mobile. By the end of the second week that’s 8,192. That’s the point at which as a business you might start thinking there’s a trend. In actual fact it only takes another seven days and that’s your entire customer base. If you didn’t engage in a mobile strategy after two weeks, you missed it. Trends accelerate in an exponential curve – and in the internet age a trend can look slow for a few years, when in fact the numbers are doubling every month. Mobile is one of these, and if you target people born after 1982, that means you’ve got to jump, now!

There’s another trend that’s been a few years in the making, but in 2013 it will have gathered a critical mass, and it’s going to affect you – like it or not. The trend is for Total Customer Engagement. In plain English this means joined-up marketing, the opposite in fact of the “silo” thinking that has driven marketing during the first couple of decades of digital.

Most companies today have a web strategy, which may include e-commerce. They will also have a nascent social media strategy, a Google Adwords programme, and maybe an eCRM programme serving segmented comms to different sets of customers, split by value, behaviour, demographics and motivations. All of which have given businesses learning and insights into how they engage with customers using ‘new’(ish) channels. What’s lacking is integration. The sea change in 2013 requires a fresh way of thinking about customer engagement, which puts the customer at the centre. The trends feeding this are the shift in the balance of power from brand to customer, driven by the shift towards peer decision facilitated by social media, and the power of collective reviews.

So how does a business tap into this before it’s too late to do anything about it? A shift of focus is required, meaning the marketer needs to understand where the consumer is going to be, on- and off-line, when they are at a moment when they are likely to change their view of a brand, ideally positively. If you can identify that, Customer Type A is likely to be on a mobile, using Twitter, when considering whether to shortlist your brand, then you can target them with the right message at the right time and in the correct format. By mapping where the customer is at each critical point in their relationship with you, and mapping a rational sequence of nudges to take them from pre-custom to loyal customer, and then creating a matrix of comms against medium for this map, then you have a plan for engaging them. This Total Customer Engagement plan gives you as a business several things: a plan that can be tested, benchmarked and improved; a brief for your team and their suppliers so they have specific tasks to achieve against your business’s Key Performance Indicators (KPIs); and a framework that can be adapted when new trends become apparent.

This kind of approach is essentially multi-channel and channel-neutral. It’s also measurable and of course by its very nature future proof. By investing in developing this kind of (actually very simple) framework and marketing architecture, it will protect you against the overwhelming trends that are often nearly impossible to spot early, but which end up rather too quickly having strategic impact. Do it now, before it’s too late!

Neglecting Creativity

There is a tension between old and new. And it’s not a new story. Our new media age – the one started in 1994, not the venerable namesake we’ve been reading for (just) sixteen years – has always been predicated on a tension between the advertising and virtual paradigms. These elicited two different approaches to creative thinking: one founded on engaging customers in a simple comms journey (see the TV ad, then see the press ad, then respond to the DM pack), and one founded on the novelty of the medium. This was fertile ground for upstarts finding brand new ways to compel people to come to and then engage with online brand campaigns.

Over the past dozen years this grew and, some might say, matured, so that the kind of brand idea that works beautifully in interactive media could have a traditional expression – integrated campaigns reached back to TV and creativity started to have an holistic expression, when done well. When done badly the phrase “Like us on Facebook” was simply stuck on a poster...

Social media has arguably taken the place of the TV ad. The best of them – love them or hate them – have won rafts of awards at creative festivals, and some apply real imagination to addressing the problem of consumers’ passing attention to creativity. And of course social media campaigns are cheap – or at least relatively so in the face of TV advertising’s mountainous resource and financial costs – a fact that plays well in a prolonged recession. With social substituting for the TV spot we’re almost back where we started.

There is another movement encouraged by this recession, happening in parallel. Recession pushes marketers, or at least budget holders, towards accountable activities. The rise and rise of CRM (made sexy by renaming it to eCRM) is due to customer journeys based on the prevalence of both big and small data and delivery using fully auditable digital channels. There are citable cases where £1 spent generates £26 of revenue, and where £200k of spend has built loyalty programmes with a million participants. So brands have moderated their attention towards the trackable, towards ROI-based, evidence-based marketing.

And this is where the tension comes back into the equation. We run the risk of reducing marketing to a spreadsheet, to highly defined segmented customer journeys which lead consumers inexorably from first to second to third purchase and which increment customer value in ways which impact the bottom line fantastically well. No bad thing, in principle. However without creativity, the engagement of consumers is reduced to efficiency and effectiveness and loses the thing that makes brands sing. Process and data are the lubricants to making marketing work. But creativity is the glue that makes consumers adore brands. Feeding creativity back into the mix is the big challenge for all of us. If we can get it right – and believe me we’re trying – then I believe we can build the next media age, one that once again is revolutionary.

Another digital era ends

It seems to be time for change around here in our little digital world. First we have the transmigration of Revolution, one of our industry stalwarts. Then, today, another – Juliet Blackburn, head of digital for the past nine years at agency selection and management gurus AAR, has taken the plunge and is off client-side. It's a pretty bold step as it happens, as I think everyone thought that Juliet would either cave in and join an agency one day or remain at the head of the table of digital agency selection forever.

Personally I think it's a good move – and Skype will make the best of her ability to cut through the bullshit to get to the real thing. Many of us will be sorry to see her go. Some won't... I've heard various agency heads over many years vent their frustration at Juliet's sometimes disconcerting ability to navigate past flimflam. To be honest, and no matter how we'd all love to have been put forward for more (and here I'm speaking as AAR's digital agency for the past five years: we've had no special favours) it has meant AAR's client-to-agency matching process has been unimpeachable. Kerry Glazer, AAR's CEO, will have a challenge on her hands finding a replacement who is half as good.