No turning back for multichannel database marketing
Multichannel database marketers, especially those with a retail, online and catalog channel, face a unique set of issues.
Multichannel means "multiple problems."
In the retail channel, not enough data about customer behavior is captured. In the online channel, too much data about customer behavior is captured. The catalog channel suffers from an identity crisis.
During the past three years, many multichannel organizations asked their database marketing experts to analyze customer purchasing behavior across channels. Business leaders hoped that the data would help form a viable multichannel strategy.
Not surprisingly, our industry learned that multichannel customers are the best customers. We learned that Web sites drive retail traffic and sales. We learned that catalog, e-mail and online advertising drive sales across all channels.
Now is time to do something with everything we learned about multichannel customer behavior. There are four things I would like to see our industry do.
First, we need to rapidly integrate the business intelligence teams that manage customer data, Web analytics and targeting strategies. Without thorough integration of these areas, we cannot hope to develop contact strategies that benefit customers or channels.
In too many businesses, the Web analytics folks are working on an island, developing their own metrics, their own reporting and their own strategies. Strong leadership is needed to integrate the data and analytics teams.
Second, we must find unique ways to summarize data in an actionable manner. Multichannel retailers do not need to have summarized fields that tell you that a customer visited the Web site four months ago, has eight lifetime visits, and has spent $125 online.
Summarized fields need to be created that explain customer "intent." If a customer visits a Web site and searched for a specific product, we need to send summarized data to the customer warehouse that implies what the customer "wants" to do. This information can be used by the retail channel to recognize customer intent, or could be used in an upcoming e-mail campaign.
More and more, customer intent is what matters in multichannel database marketing. Developing these fields of intent is more art than science, and requires a database structure that is not congruent with traditional database design.
Third, we need to combine customer intent with a segmentation methodology that is not in the tradition of RFM (recency, frequency and monetary value). Whether the segmentation strategy is a lifestyle segmentation scheme, or a customer persona, we need to bring multichannel customer behavior to life.
Marketers struggle with the concepts of an RFM segment or neural network score. Marketers want to target a male persona with a propensity for purchasing high-ticket electronics in-store after viewing a high-definition plasma television online. The targeting fields we create must be made easy for marketers to understand and act upon.
Finally, we need to figure out how to allocate sales from all of our channels to all of the marketing activities created in earlier steps. Several vendors already provide these services, and many businesses use matchback analyses to understand customer response to advertising.
Database marketers at multichannel organizations must develop proprietary attribution tools in-house. If the skills to create these tools do not exist in-house, the database marketer should partner with the vendor community now.
Customer response to marketing has never changed as rapidly as it is changing today. We all need to use state-of-the-art analysis tools to understand customer response to marketing.