Channeling the Customer
Capturing and integrating data from across channels is a daunting challenge, but provides a matchless opportunity to understand customers and gain a competitive advantage. “As the online world matures, the heavy distinctions that we've had between channels will dissipate, and it'll just be marketing,” says Eric Stein, EVP of online solutions at multichannel marketing solutions provider Epsilon. “We'll have marketing to consumers that spans online channels and offline channels. And that's the best way to market to consumers.”
In the end, all marketers want the same things: the ability to target, reach, and measure marketing programs, Stein says. Data helps marketers obtain these objectives by identifying target audiences and clueing marketers in on what their customers really want (and how they want it). Here's how three companies have used multichannel data to benefit themselves and their customers.
Johnny Cupcakes links data, discovers new opportunities
Customers may not always be who brands think they are and analyzing data assets from different channels can provide an eye-opening view. Johnny Earle, CEO of graphic apparel retailer Johnny Cupcakes, thought he knew his customers to a T: collectors and “diehard” followers. At the time, his company didn't glean much information about its customers from its social presences, but after installing a solution that analyzes social behavioral data from TrueLens, Earle discovered that the majority of his customers were first-time buyers.
Earle says this misperception had led him to underestimate Johnny Cupcakes' reach and sales potential.
“We've kept our shirts out of [third-party retailers] because we wanted to largely appeal to people who collect our shirts,” Earle says. “We almost put a cap on how much we could grow because we thought, ‘This is it. These are our customers, and I don't know what else to do.'”
To better identify and target Johnny Cupcakes customers, the brand began to examine its cross-channel data using TrueLens. By combining historical customer data, such as previous email click-throughs and transactional information, and adding a layer of insight from social data, Johnny Cupcakes not only identified its die-hard collectors, it also identified the connected, casual customers who don't purchase frequently but spread the word on social outlets when they do. It also uncovered special interest customers partial to specific themes or characters, such as sports or Hello Kitty, reflected on Johnny Cupcakes apparel.
The retailer now tracks what customers and prospects talk about on social networks to spot trends and changes in customer interests. Johnny Cupcakes identifies these prospects as people who have subscribed to Johnny Cupcakes product email lists but haven't made a purchase. TrueLens also uses “look-alike” modeling by comparing socially active consumers from its database to Johnny Cupcakes' best customers, and then forecasting which customer segments would be most responsive to certain email messages.
As a result, Johnny Cupcakes can more efficiently target specific customer segments and anticipate future customer activity. For example, the brand launched a “Midnight Snack” email campaign for the launch of its new T-shirt line. Targeting its key segments with tailored email messages resulted in a 141% increase in sales and a 42% lift in click-through rates. Lucas Dunn, business director at Johnny Cupcakes, says this insight has led the retailer to be more selective when choosing which products to highlight for each segment and what subjects to include on its apparel. In addition, Dunn says that Johnny Cupcakes is also looking to segment its email campaigns based on gender data; it would use the same email copy, but feature an image of a guy wearing a T-shirt for male customers and a girl wearing a tank top for female customers.
“The impact that this data has is it tells a bit of the history, and it tells a bit of how our brand has gotten to where it is [today],” Dunn says. “It gives us a road map and a tool kit in the immediate future. It also opens up this world that affects our strategy and our planning on a product level—better understanding of age [and] interest is a huge thing for us.”
Half Price Books combines data to drive engagement
If you're a midsize bookseller, you know immediately who your competitor is: Amazon. To find oneself across the battlefield from the online e-commerce giant is not an enviable position. But while Amazon might seem like a master in all things digital, a company like Half Price Books has something Amazon could never replicate: a loyal, almost cultish following. Kathy Doyle Thomas, EVP of Half Price Books, knows how important this personable relationship is—and it's why she set out to implement a cross-channel marketing strategy.
Doyle Thomas compares Half Price Books to New York's famed Strand Book Store—though Half Price is more expansive: The family-owned chain has 117 stores in 16 states. Half its merchandise is used books; the other half is overstocks from publishers. In December 2011 the book retailer began using a tool from ExactTarget, a provider of digital marketing solutions recently acquired by Salesforce.com Inc., to host both of its customer lists. It sounds simple—merging two data sources—but finding a partner who could actually do this turned into a process. “There weren't many [vendors] that could handle the postal mail and the email list,” Doyle Thomas recalls. “We're considered a midsize company, with more than 700,000 in our email list and 350,000 in our postal list.” That might not sound huge, but it was large enough to be difficult to manage.
Half Price Books needed to merge these disparate datasets because it wanted to better control its marketing. For one, the book retailer got a big return from direct mail. “It was important for us to get all that [email and postal] data in one place and see how much overlay we have,” Doyle Thomas says.
Merging data from both postal and email also allows Half Price to build better, more precise marketing campaigns. For instance, it can now geo-target its email messages. “We don't want to bother people with an email about something that's happening in Texas when they're in Alabama,” Doyle Thomas says. “You get a better return, and you don't tick off your customers. And we can do it all in one swoop.”
Perhaps Half Price's biggest success is incorporating its social channels to drive email engagement and, ultimately, store traffic. A recent Facebook campaign offered a 20% discount coupon (after A/B testing, Doyle Thomas realized this would be more successful than the alternative: $5 off a $25 purchase). Connecting Facebook with email and tracking the coupon to in-store purchases allowed Half Price to know exactly how successful the campaign was: It netted 36,000 new email subscribers and 14,000 new customers coming through the brick-and-mortar outlets. Additionally, monitoring social conversation gives Half Price an idea on how to communicate in other channels. “You can target the email campaigns based on the chatter that's happening with our
Facebook fans,” Doyle Thomas says. “That gives you new information about the psyche of why people are shopping from you—not just how old they are, but their likes and dislikes.”
Because Half Price differentiates in part with its rich customer connections, cross-channel integration is less a luxury and more of a necessity. The book-selling industry is at once languishing and highly competitive, especially given Amazon's mountainous presence. “You really need to be as much on your game as you can,” she adds.