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The direct marketing channel war revisited

These days the debate over direct mail versus email seems to be over.  The conventional wisdom is that direct mail is too expensive and takes too long.  If a retailer has had bad sales over the weekend, they want to take action now and not wait a month or two to get a direct mail piece delivered to their customers’ mailboxes.

However, this approach could ignore some valuable customers.  What about your customers who are not emailable either because you don’t have their email address or they have opted out of email communications?  Also, sending an email doesn’t mean it will actually be seen by the consumer.  Google’s use of the promotion inbox makes it easier for consumers to ignore marketing communications.  In addition, plenty of people have secondary email addresses that they use just for these types of communications and which they check only rarely.

In addition, there is the question of whether email is always the best channel for the message.  A recent study found that physical ads were better than digital ads in some respects.  See here: http://www.dmnews.com/postal/direct-mail-has-a-greater-effect-on-purchase-than-digital-ads/article/423292/

In the end, it may be a multichannel strategy that works best for you.  Through a test and learn approach you can determine what generates the best return on your marketing investment.

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Welcome!

How important is it welcome customers to your brand?  If you are a brand manager with a welcome program for new customers, you may be asking yourself this very question.

Welcome programs run the gamut from a simple email that confirms someone has signed up for an e-newsletter or thanks a customer for making a purchase to  a coordinated series of communications across a range of channels (for example, telephone, direct mail and email).  The best welcome programs are integrated across channels and feature tailored messages based on the customer and the product or service purchased. These communications begin shortly after a customer has made a purchase, registered on a website, etc.  They can span as little time as a week to several months depending on the product.

Welcome programs are important for many reasons.  They enable you to:

  • Thank customers.  Let the customer know that you appreciate their business and it reinforces the good feeling they have about purchasing from you
  • Promote new products.  These communications can be used to make customers aware of additional products and services they may want based on what they have already purchased
  • Educate customers.  It is a way for you to communicate with your customers about product features that some may find confusing.  Proactively sharing with them how to access or use a feature could reduce future calls for technical support, saving your brand money and reducing customer frustration down the road
  • Understand your customers better.  It is an opportunity for you to gather information about the purchase process at a time when customers are most likely to talk to you

I have found that customers are most responsive to communications just after they have purchased a product and just before they are about to purchase again.  Take advantage of this opportunity to begin a dialogue with your customers.

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Take a minute to consider these questions

Big data has been a hot topic for several years and for good reason. There is value in analyzing unstructured, high volume and massive data sets. However, when I interview candidates that say they want to be data scientists, they focus on the technology and techniques.  They forget that the critical thinking and framework used for big data is also important and it is applicable to many types of analytic projects.

It comes down to some very fundamental questions:

  1. What problem am I trying to solve? Defining the problem up front will keep you grounded as interesting findings may lure you away from your goal.
  2. What data sources can I use? You want to consider multiple sources to triangulate your results and provided a richer picture of what is happening.
  3. Have I considered all the possible sources of bias? Bias of all sorts can skew results and must be considered and incorporated into your analysis plan.
  4. Do I need to use all the data available or will a sample be sufficient? There are times when it is not feasible or necessary to analyze all the data available. However, if you sample, you need to make sure that you are getting sufficient coverage and that your sampling is random.
  5. How can I validate my data? Validation must be part of your analytics plan, whether you validate one data set against another or at least compare your results to findings from other comparable projects.
  6. What analytic technique(s) are appropriate? Consider the pros and cons of various techniques and what would be most appropriate given the data and problem at hand.

While it is very tempting to dive straight into the data and analysis.  Spending time up front to answer these questions will help you be more efficient.

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What is big data?

I am often asked, what is big data? It happens at holiday parties and even once after a funeral. Certainly there have been large data sets before. So what is different now? Big data commonly refers to data that is so large that you cannot use the typical environments to store and manage it or the typical software to analyze it. In addition to volume, big data is often defined by velocity and variety. Velocity refers to the speed at which the data is available and big data typically includes frequent inputs.  Variety refers to the diversity of sources and formats and big data typically contains unstructured data which is not easily categorized or organized.

The volume of big data requires new thinking about where to put the data.Traditionally, companies kept their data in house, in a data warehouse on an internal server.Now some companies are turning to the cloud, both private and public clouds, to house data because of its size.In addition, the cloud offers flexibility should the needed storage capacity grow.Similarly, the volume and variety of the data may make it impractical to load the data into a database for to do so would require assigning data elements to tables and fields.Some big data may not be easily structured.For example, it could be text messages from online customer service chats.In this case, companies might turn to a parallel programming framework such as MapReduce to capture the data.This enables them to load all the data and then parse the text of the on-line service chats to identify the frequency of words used.For example, how many customers reported a problem with a particular part or described themselves as frustrated.However, you can’t use SAS or SPSS to analyze the data in a MapReduce environment.Further, data mining techniques may be more useful than classical statistics because of the nature of the problem to be solved.Thus, almost everything about big data requires rethinking data and analytic tools.

However, in the end, big data is like all data.   It must generate value. Big data is meaningless unless it enables companies to increase revenue and/or reduce costs by enabling them to identify insights that were previously unavailable. The power of big data is that analysts can explore larger data sets that were impossible to analyze before and delve into unstructured data that was typically ignored because of its non-conforming format.

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What I am thankful for

Thanksgiving Day is a time that I reflect on all the things I am thankful for and the increased emphasis on analytics is one of them.  With a struggling economy businesses want to know the value they are receiving from their marketing dollars.  Analysis can help them determine their ROI and optimize marketing efforts.  Increasingly, companies are looking at their wealth of data as a valuable asset that can drive revenue growth.  With data mining techniques, companies can identify hidden trends and insights that can lead to new customer segments or new product offerings.  Lastly, increases in technology have made it easier and easier to delve into data and display the results visually.  Thus, making it easier to uncover value in your data.

At a recent road race someone asked me what I did for work.  When I told her, with a smile, that I optimize marketing efforts through analysis, she remarked that it was nice to meet someone who enjoyed their job.  I enjoy what I do, in part, because I believe in the value of analysis.  It is very rewarding that others are recognizing that value as well.

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Don’t forget the intangible skills

While everyone seems to be looking for data scientists these days, I have been interviewing Analyst and Sr Analyst candidates.  The focus lately has been on technical skills and rightly so.  Data scientists, for example, need to be able to transform raw data into analysis and actionable insights.  That may require experience with Java as well as data mining techniques, an unusual combination.

However, my interviews have reinforced the value of the intangible skills:  creativity, commitment, and curiosity.  The best candidates provide examples of how they have solved a problem creatively.  One candidate described a model he created to deal with missing data.  It is rare to have perfectly clean, comprehensive data.  Being able to overcome data issues is an important analytic skill.

I also look for candidates who are committed to providing the best possible analysis.  Clients pay me to solve difficult problems they can’t solve themselves.  They entrust me with their data and I take that trust very seriously.  Thus, I want everyone I work with to do the same.  While it can be difficult to assess commitment during the interview process, there are telling cues.  One candidate asked in advance about her interviewers, came prepared to her interviews with excellent questions that indicated she had researched the company and quickly sent thank you notes after every interview.  Her attention to detail and follow through made an excellent impression and spoke louder than words.

I always start an analysis with a hypothesis and a project plan.  However, sometimes during the course of an analysis, you find something interesting that changes your plan or analysis.  At other times, you may have a hypothesis that turns out to be false when pilot tested.  One candidate gave a presentation and at the end admitted that the marketing program she had developed did not generate incremental revenue as expected.  I liked that she presented on a program that did not perform as expected.  The only way to innovate is to remain curious and willing to test hypotheses.

While technical skills are important, don’t underestimate the intangibles.  I can teach someone SAS.  It is much harder to teach someone to be curious about data.

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New Rules of Content Marketing (#SMB26)

There was another smart and interesting Social Media Breakfast (#SMB26) yesterday morning organized by Bob Collins (@RobertCollins).  CC Chapman (@CC_Chapman), Joe Chernov (@JChernov), Brian Babineau (@BrianBab21) and Rachel O’Connell (@RachelJOConnell) presented their thoughts on Content Marketing.

CC provided useful rules about content that are timeless – “speak human”, “re imagine don’t recycle”, “show don’t tell”, and “do something unexpected”.  Joe provided an overview of infographics and how they can be used to effectively drive traffic, build goodwill, and establish authority. Brian reminded us that we need to “embrace the people’s agenda” and that it starts with being generous and providing value.  Rachel spoke about her rules for content now that there are a plethora of channels where consumers can gain information and they are increasingly turning to friends and reviews to learn more about products and services.  Lastly, there was an ample Q&A period led by Bob.

In addition to great content, Social Media Breakfasts are also a great chance to meet other marketers, compare notes and share ideas.  I came away with some good ideas and examples to consider and you might too.  It is well worth checking out (www.socialmediabreakfast.com).

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Happy New Year

The new year has begun. Now is the time to measure the success of your holiday campaigns. How did your campaigns perform? This is an opportunity to look at their effectiveness in terms of building awareness, generating revenue, increasing retention and aiding customer acquisition? How do your metrics compare to industry benchmarks as well as internal benchmarks? How much revenue did they generate and were they profitable? In addition, what worked and what didn’t? Now is the time to evaluate any tests that were done – date/time, subject line, creative, etc. Finally, compare the results of this past holiday campaign to the one before and analyze the differences. The insights from the holidays can inform your strategy for 2012.

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I am dreaming of a white Christmas

Even though it still feels like summer outside, now is the time to start planning for the holidays.

The first step is to evaluate all of the tests that have been done throughout the year in order to put your best foot forward.  In addition, it involves reviewing the results from the prior holiday season.  That means determining the most effective:

  • communication method (e.g., email, direct mail, multi-channel) by customer segment
  • timing (both day of the week and time of day)
  • creative (hero images, placement of links, etc.)
  • subject lines (when and where to mention free shipping offers, brand or product offers, etc.)
  • offers (discount percentages, dollars off, buy one get one free)

Next step is to evaluate any implementation issues from the prior holiday season.  Before coming up with your holiday strategy it is important to determine any limitations or challenges with respect to execution.  Your strategy cannot be developed in a vacuum.  Thus, I recommend that you review what has worked and what did not work with the entire team.

Once all of this information has been gathered, you can develop a holiday strategy.  It should incorporate the lessons from past tests and holiday campaigns as well as encompass:

1.  Start Date. The average holiday campaign begins in October.  Some retailers hold pre-holiday clearance sales and send informational emails to start their holiday campaigns.

2.  Black Friday. For Marketers, the holiday campaigns have been starting earlier and earlier on the calendar.  The same is true for Black Friday.  It is now beginning on Thanksgiving Day for some retailers.  When will yours start?

3.  Cyber Monday. While many digital sales are made on the Monday after Thanksgiving, digital sales are occurring earlier as consumer shop from home.  Will you wait for Cyber Monday or start earlier?

4.  Sequence. If you are using email, you can easily send at least an email a day.  It is important to determine the contact frequency and cadence.  Will all or a segment of your customers receive an email a day, every other day, every third day, etc.?  Will emails be sent only on weekdays or only weekends or a mix?  Will there be a resting period or a maximum number of emails that can be received?

5.  Free Shipping.  Many consumers expect to get free shipping online, especially during the holidays, and will not pay for shipping.

6.  Social Sharing.  Consider how to tie in Facebook, Twitter and other social sites with your campaign.

7.  After Christmas. Lastly, there is also the opportunity for follow on sales after Christmas.  It is the time to promote use of gift cards and purchases of parts or refills.

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Disruptive technologies

I was driving by a shuttered Blockbuster store recently and naturally I thought about disruptive technologies.

When VCR tapes first became popular, Mom and Pop stores started catering to a newly created market for movie rentals.  I remember the excitement of being able to rent movies and, for a time, the video store became the place where you regularly saw friends and neighbors.  Then Blockbuster came along and pushed those small stores out of business.  The selection was better and you could keep the movie for a few days.  Now Blockbuster has been shoved aside by Netflix, despite launching its own website and providing a similar service whereby you receive and return DVDs by mail.  With its bankruptcy and later sale to Dish Network, Blockbuster and the video rental store has been officially rendered obsolete.

Now Netflix offers on demand streaming video of movies and old television shows.  They have also announced deals for original content.  Blockbuster was too slow to evolve and see the value of a flat fee subscription service and the convenience of mail.  Netflix has taken the concept of video rental and is now becoming an important distribution channel and could possibly complete with cable channels for content.

Every business needs to beware of disruptive technologies that will render its business model obsolete or redefine the market.  You never know where the threats might come from or how much time you will have to react to them.