Personalized Marketing = Customer-Centric Marketing

The meaning of customer centricity is as varied as the organizations that claim to be customer centric. But customer-centric marketing consistently entails two critical actions: understanding and meeting individual customers’ expectations. Doing so requires personalization—in terms of segmentation, targeting, and messaging for each customer interaction across traditional and digital channels including direct mail, email, mobile, social media, and websites.

Direct Marketing News and Dan Druker, CMO of sponsor MyBuys, cohosted an editorial roundtable comprising 10 senior marketers on how they consistently—and lucratively—deliver truly personalized multichannel experiences to their customers. The conversation included topics like how to increase sales and conversions; profitably improve customer-lifetime value; overcome barriers that block tactical success; and deliver captivating customer experiences connected at all touchpoints.

Ginger Conlon, Editor-in-Chief, Direct Marketing News: Welcome to our roundtable about profitably delivering personalized customer experiences across marketing channels. Dan, please kick us off with your take on customer-centric marketing.

Daniel Druker (MyBuys): The original approach to marketing was the one-to-one relationships store owners had with their customers. But that didn’t scale. Then advertising came along with one message to everyone. Along the way, we invented this amazing thing called segments. That was great: Instead of the same message to everybody, I’d have 10 segments of five million people each and I’d market to them. Now, I see customer-centric marketing as using technology to go back to the original days, when I could have one-to-one conversations with people, but using technology do that at scale.

DMN: Thanks, Dan. Let’s start with each of you describing your role in terms of delivering personalized experiences across channels.

Aaron Cano (FreshDirect): I’m VP of marketing and merchandising analytics. At FreshDirect we’re hyper-focused on the consumer; my role is to bring that voice forward through analytics and research. We deliver on this insight with a consistent strategy from the website, through direct mail, SMS, email, and social. Personalization is the word of the day and we look at optimizing through that.

Jean Marc Rejaud (Fashion Institute of Technology): I’m a marketing and marketing-communication professor at FIT. We educate our students to be efficient and effective in the world of marketing and marketing communications, including omnichannel and digital marketing programs for fashion-related retailers and businesses.

Toni Hendrix (New Jersey Performing Arts Center): I serve as chief customer officer [at NJPAC]. Under the direction of our VP of marketing, a cross-department team of key managers meet on a regular basis to review our marketing and communication plan for upcoming events. During these sessions we examine what we’re doing for each of the channels we use to engage our customers to ensure that messaging and offers are consistent and appropriately directed.

In addition, I work directly with our customer facing teams: box office, guest services, and volunteers to develop, coach, and train the staff in customer experience expectations and best practices.

Neal Patrick (Woman Within/OSP Group): I’m VP of marketing at a plus-size direct marketer for women’s apparel. [My] scope is primarily the print-marketing side. We have a long history of catalog and direct mail, and have gone from catalog to the digital space, shifting into email and online customer contact. Our customer isn’t into cutting-edge social behavior, but she loves Facebook. We’ve been engaging her in that space, making sure that we communicate our brand.

Brad Sockloff (Morningside Marketing LLC): I’ve been in the marketing and e-commerce space for 15 years, mostly online. Most recently I was with PetCareRx but before that I was with companies like Kaplan, Readers Digest, and Time Life. I just started my own consulting company—getting businesses online, getting marketing programs set up, and helping them build websites that convert customers.

Henry Posner (B&H Photo): I’m director of corporate communications and online reputation manager. I started with B&H about 19 years ago—after 20 years as a professional photographer—so I can talk to the customer about marketing and his business. I do 90% of this either by email or online. We’re very active on Facebook.

Ken Seiff (The Beanstalk Fund): I’m managing partner at Beanstalk Ventures. Before that I spent 17 years in e-commerce doing startups—my first one was Bluefly, and my most recent one was Poppin, which is office supplies.

Julie Fabricant (SHEfinds Media): We’re an online women’s fashion lifestyle publisher—I’m director of marketing, tasked with growing all of our communication platforms. There are a lot of women’s websites, and we differentiate ourselves [through our] honest voice. We’re a small team, we work with a lot of affiliates, and we collect a lot of data about how women are shopping. I use it to retarget what our editors are writing about.

Michael Burgess (Saks 5th Avenue): I have a lot of direct marketing experience online. I’m president of Saks Direct, the online division of Saks Inc., responsible for developing our omnichannel strategies. We take all the data from the online business and the integrated CRM system and build out those omnichannel customer interactions.

DMN: How do you define customer-centric marketing?

Seiff: Getting to a place where marketing is a service, where you’re reaching the customer at a time [they choose] with what they want. It’s entirely possible that a customer abandoned a cart because he didn’t want to shop right then. And if you figure that out and then email him at 7:45, when it’s fresh in his mailbox, and he’s about to go on his iPad, you’ll have a much better chance of servicing him. In my mind, it has to be a service.

Fabricant: We put the customer first, [finding] what the reader is engaging with and then using that to capture her attention. Our approach is from two angles: what we need to do to drive the product, and also what makes sense for a reader, what she’s going to enjoy—the customer experience.

Patrick: There are two [ways] that you have to look at customer centricity: one, what’s the consumer interested in; and two, where is she in the cycle—a purchase cycle or a life cycle? Has she purchased, has she returned some things, has she signed up for a credit card? Different things that aren’t just product related.

Sockloff: When you think of customer-centric marketing, it’s not even just that original purchase. It’s the entire customer experience from purchase to delivery, even up through a possible return; and then, how you go about trying to get her back as a loyal customer.

Cano: For us, customer-centric marketing is about how we tap into and leverage the voice-of-the-customer data when customers engage with us. When we’re engaging with them individually, customers see that we’re more relevant. We want to give them what they want when they want it. A customer’s experience may be different depending on the conversation platform, whether that’s on a site, in an email, or via social media; also the timing may be different, depending on the channel you’re talking about.

DMN: What individual channels are you using: email, mobile devices, in-store personalization? What results are you seeing?

Cano: We’re trying to bridge the gap between the old-school targeting and segmentation and this new world of personalization. We’ve been doing a lot through direct mail. But how do you handle knowing who the customer is when they come through the door? When people come to our site, we know from that first basket who they are. Everything about them is right there on the table. Certain customers should be treated differently than others. Through direct mail, for example, we can easily tailor communications to the individual customer. But on the site those same rules apply.

Burgess: If a customer likes a product and we market that to her online, the sales in-store—within the 48 hours after we send the email—are multiples of what we sell online. And mobile and personalization couldn’t be bigger. We made the mobile shopping experience easier, and the conversion rates went up six-fold. So it’s all integrated, and we are very, very focused on cross-channel shopping behavior.

Fabricant: Our “nail of the day” campaign was amazing when we engaged on social. It became a part of our proposal to readers. I don’t think anyone picked out that that was an advertisement. I used the data we were getting from email and the engagement from our nail content to make a better end-product.

Patrick: We’re managing more and more on the social side. Our customer doesn’t tweet. She’s got grandkids, she loves to see pictures on Facebook, and she loves to be engaged that way. We’re being relevant to her in that space.

DMN: What are some of the impediments you’ve run into in personalizing your marketing?

Cano: One challenge is that we get multiple family members to our site. Who’s the primary customer? Whom are you catering to? Family members shop differently.

Hendrix: In our industry 80% churn in year-over-year attendance is not unique and wreaks havoc with our ability to develop deep, rich data regarding our customer base, which covers dozens of unique customer segments. Another example is not having enough knowledge about what messages are actually resonating and why. For instance, the size of your email list and related open rates mean nothing if you can’t relate back to results: why did those specific customers open, and did they make a purchase; why did other customers not open.

Seiff: Another barrier is [universal recognition]—you have to be logged in on all devices and be an incredibly loyal customer to be recognized by a retailer in all channels.

Rejaud: Only a few retailers are fully and effectively personalizing their marketing. Either their business model allows them to do so—like Amazon.com—or they’re new and digital-smart enough—like Warby Parker—that they can build the required omnichannel infrastructure and can create real omnichannel relationship building interfaces. But, if you start with a large legacy infrastructure like most established retailers, the question is “show me the money,” because the investments are just mind-blowing. Another key issue and question is “show me the talent to make it happen.”

DMN: Dan, can you talk specifics about using personalization to build better customer relationships?

Druker: That’s something we’ve all got to understand. Take Amazon. com. It does a couple of things that all marketers should look at: One is ratings and reviews; the other is customer centricity. Amazon remembers everything about you and engages via omnichannel. But, that business efficiency requires doing things that may conflict with what makes for, say, a great fashion experience. I think that’s a problem Amazon faces.

DMN: What are some of ways that you facilitate personalization or plan to?

Fabricant: We have a small staff. I don’t have an on-staff tech guy. I partner with technology companies like Sailthru for our email service—I can lookup anyone on our list, and I can see how many times a customer reads from her iPhone, for example. We’re going through a redesign, launching next year, and that data’s going to help me make decisions about which people read most of their email on their iPhones, not even just mobile, but iPhones specifically. My question then is: What do I do with our redesign to make iPhones the channel that’s going to be the most optimized?

Patrick: Because we measure such a large volume, we use Net Promoter Score. That’s kind of our touchstone for understanding how engaged the customer is, because it’s also about referrals. Would you talk about us or would you refer us to a friend? The fact that she’s willing to refer is important to us, because that gives us a slightly different lens to look through to understand how engaged she is. You can start to measure that across channels, transactions, and interactions. We’re so data-driven, this gives us data points we can focus on.

Hendrix: We developed a multipronged approach to identifying discreet customer groupings that included demographical data, transaction data, and value-based scoring, which we use to tailor messages and offers. We’ve had success with retargeting and we also conducted four years of customer experience surveying that included Net Promoter Score.

DMN: How have your personalized campaigns improved your lifetime-value metrics?

Rejaud: In some ways, higher education doesn’t think so much in terms of return for each specific program. The value proposition comes more from the educational opportunity that is provided by an institution, which implies the accuracy and pertinence of the programs’ content, the quality of the pedagogic philosophy, the quality of the instructors, and the support services that are provided. I think the most marketing-oriented higher education providers try to put the students—their customers—at the center of the way a program is organized or the way they provide, build, or improve their programs.

At FIT, we clearly position ourselves as a creative, design, and business school. But if we speak about FIT the brand, we don’t speak about the programs per se. We speak about the scope of topics that we cover, of course, but more about the students’ experiences as new students, current students, and then alumni.

Fabricant: Recently, I’ve been looking at our email lifecycles and the lifestyles of the people on our email list, because I spent so much time and effort to grow it. But, I’m looking at what these customers are doing for me. If I see churn, maybe it’s good churn. Maybe I don’t want these people on my list. Are they staying on the list for 90 days, for 30 days? And then we look at editorial and I consider what emails do customers engage with and why they are dropping off. Is it because we did a lot of celebrity stuff, and they’re not as interested?

Burgess: Understanding value is true for the department store world, as well. What’s the value proposition of Saks to the customer? It’s essentially allowing her to shop with confidence and find the fashion trends and dress with style. And so how do we do that in-store? How do we do that online? How do we make sure it’s personalized and relevant to her specific needs?

We have considerable data online about what she’s bought and what she’s interested in, and we target her with brands, products, and trends that we think really meet her needs. That’s where a lot of our [understanding comes from] today, through our CRM databases.

But we then have to tie that to relevant information about the fashion trends that we’re seeing around the world and bring that value to the customer. So it’s a nice dovetailing of the value proposition of, “You can look fabulous, with all these great trends and great brands, by shopping all in one place,” and leveraging data to building that relationship. And when you’re in the store, the personalization happens in the form of our associates, who leverage our CRM data and their expertise to personalize a look for you with the best fashions and build a relationship that way.

The ultimate goal for us, because the customer is moving so quickly to online, is to keep them going back to the store as well as online and build share of wallet and relationship. We have to tell her that the New York store has a great new delivery of, say, Dolce & Gabbana or Louis Vuitton shoes, and get her to shop across channels. Once we get her to be an omnichannel shopper, the value goes way up.

Seiff: Sometimes there’s a misalignment between what we’re measuring and what we need to create. We’re trying to bring you in for more purchases, get you to place larger orders to get more share of wallet, because that’s the measure we can get. Michael was talking about value to the customer being an emotional one—emotional currency—or confidence that what a person’s buying is going to make her look good. The disconnect is that consumers shop for some kind of emotional currency, but we can’t measure that. The only thing we can measure is the proxy for that currency, which is how often they shop with us and how loyal they are to us.

Posner: One of the most important things to me is, after the customer has had all those juicy, delicious experiences she goes to a cocktail party on Saturday night and says, “I just had the best shopping experience at B&H.” The customer saying that at a barbecue, at a local professional photographers meeting, wherever, that’s as important to me as all the marketing. Yes, I want a customer to buy from me through all those channels—online, in-store, emails. But I also want the customer to say to people, “Are you looking for a camera? I had the best experience with B&H.”

 

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