Make Online, Offline Work Together
An absurd proposition, of course. Muhammad Ali might toy with mere mortals one arm at a time, but against world-class competition he always used both hands.
Marketing is in the same position as Muhammad Ali. Over the years it has developed some very powerful and sophisticated tools for traditional, offline marketing programs, such as direct mail, call centers, sales force and point-of-sale. Recently, database marketing strengthened the offline approach with sophisticated segmentation and centralized marketing strategies. Forward-thinking organizations have employed some or all to positively affect the bottom line.
With the advent of the Internet, online marketing programs have also come into their own and they too have been used to great advantage. Web-based services, e-mail targeting, real-time programming and sophisticated analyses are among the potent Internet strategies that have been used to increase the value of customer relationships.
As powerful as they are, using offline and online marketing devices independently of each other is like Muhammad Ali using one arm at a time. It's OK for a little razzle-dazzle, but it's not good enough against real competition. Any organization that's serious about competing in today's dynamic marketplace needs the complete package. Anything less could get it flattened.
Questions remain, however. While the wisdom of integrating both sides of the marketing mix may seem self-evident, the benefits may not be clear. Equally unknown are the tools and technologies for implementing and managing the integration. This field is known as customer relationship management.
Traditional marketing has tried for years to communicate directly with the target audience, most notably through direct mail campaigns based on general databases. Over time these efforts expanded to include more sophisticated tools for managing the databases and the responses. But all these campaigns were too expensive with far too much lag time between the planning, analyzing, executing and measuring stages.
We call this type of marketing, based on databases, d-marketing. It can be characterized by the following properties: Marketers possess a large experience base but are apprehensive of the Web; marketing campaigns exhibit sophisticated segmentation and centralized marketing strategies; and the marketing department controls most of the direct marketing budget.
D-marketing is state of the art for most organizations, and like any marketing strategy, it has strengths and weaknesses. Among its strengths are sophisticated segmentation and analytics, trackable and rich data, known technologies and skill sets, the leveraging of current IT investments such as data warehousing, and useful learning curve and feedback loops. On the negative side, d-marketing is expensive, has a long development cycle and lead time, and is conducted on a one-at-a-time basis.
With the Internet explosion has come
e-marketing, defined as real-time, Web and e-mail-based marketing campaigns. In contrast to d-marketing, e-marketing has drastically lowered the cost of a campaign, consuming a mere 1 percent to 5 percent of the overall direct marketing budget. It trades expensive printing and binding jobs, mail house labor and postage for e-mail pitches and Web simplicity.
As with d-marketing, e-marketing has its plusses and minuses. On the positive side, it is inexpensive, a closed and trackable loop controlled by the customer and automated. On the negative side, it has unsophisticated rules and segments, uses generic profiles, is frequently perceived as spam and is frequently implemented on a stand-alone basis.
A considered look at the pros and cons of d-marketing and e-marketing would lead one to conclude that integrating the two would expand their individual strengths while eliminating their individual weaknesses.
Integrating the two would allow marketers to analyze, plan, execute and track one-to-one marketing campaigns across
multiple traditional and Internet channels. This would create a virtual marketing loop that builds customer loyalty and more profitable customer relationships. We call this capability @marketing (advantage marketing).
It's no coincidence that @marketing arrives at a time of expanding customer influence. The altered brand/direct marketing mix has produced better-informed customers and prospects, lower barriers to switching and increased price sensitivity.
@Marketing optimizes channels, presents a consistent brand message, creates a community and customer "stickiness," offers sophisticated segmentation, balances expensive with inexpensive channels, is an interactive, closed loop that learns with each iteration and employs and builds an information base. For @marketing to succeed requires cooperation and integration among departments and the creation and use of a centralized database. Also, like anything new, it requires learning new processes and skills and a willingness to change.
Clearly, @Marketing has a positive impact on the bottom line, leading some marketers to become early adopters. Moving swiftly have been such firms as Priceline.com, Dell Computer, E*Trade and eToys.com. They "got it," realizing that a solution that allows for the analyzing, planning, executing and tracking of marketing campaigns across multiple traditional and Internet marketing channels is an effective way to decrease marketing costs while building customer loyalty. Through real-time analyses of customers' and prospects' behavior, organizations are now better able to meet customer desires and preferences.
Firms failing to "get it," such as Compaq, Borders and Toys 'R' Us, have found themselves trailing the field. Only time will tell whether their delay will cause permanent marketing damage.
What should these marketing automation tools look like? They are Web-based, multi-channel software solutions that integrate Internet and traditional marketing channels. They enable e-businesses to analyze, plan, execute and track multichannel marketing initiatives, executed on an enterprise-scale via the Web, e-mail, direct mail, call centers, direct sales systems, POS and mass advertising.
Furthermore, they should automate customer communications across these numerous channels in multistage, personalized campaigns. Predefined events, such as noticeable increases or decreases in sales, should trigger new custom marketing communications activities and address each customer's unique needs, preferences and business conditions.
We think the results will be impressive, with increased profitability and customer loyalty, including greater response rates, reduced churning, increased revenue and tremendous increases in marketing efficiency. This is the promise of true marketing automation.