Data-driven Marketing Strategies: Retaining the Customer
In a world where we the average person spends more than 24 hours per week online, there is an ever growing demand for businesses to implement robust digital strategies. As bricks-and-mortar shop sales decline and department stores face increasing challenges, businesses must have a concrete digital strategy in place. This will require a comprehensive understanding of the customer journey, and how to retain customers after the initial purchase.
Online and Offline Strategies
Offline conversion tracking solutions can often be seen as complicated, but this crucial data shouldn’t be ignored and instead, utilised. In many cases the customer journey may start online, only to be finished offline. For example, a user may be shown an Instagram story ad, to which they then search for the brand shown and finally buy the product in the store. Here there are at least 3 touch points, starting with social, then search, and finally offline. The key takeaway here is to ensure your digital channels are in communication with each other, and there are solutions in place to measure what happens in the offline world.
Customer Touchpoints: The Attribution Problem
Advertising strategies can be broadly assigned to three different mediums:
Above the line (ATL): refers to advertising that aims to be deployed around a wider target audience, e.g. television, radio, or billboards.
Below the line (BTL): refers to advertising that seeks to reach a consumer, as opposed to a mass audience, such as targeted text ads and email marketing.
Through the line (TTL): refers to an advertising strategy that involves both above the line and below the line strategies.
The nature of these different mediums can make the process of attribution difficult. Attribution is when a touch point in the custom journey is assigned with either partial or whole credit for the desired outcome. It is important that as much data is collected throughout all advertising stages.
In BTL advertising, in particular, digital advertising, there is currently a move away from the last click model. The last click model does what it says on the tin – and assigns the last digital click with the full conversion, ignoring the influence of all prior digital ads. This approach should be applied to all advertising, with efforts to calculate potential uplift in digital performance as a result of ATL advertising.
Audience First Lifetime Strategies
Another strategy that businesses should employ is an audience first strategy; having a strategy focused on the consumer as an individual. First party data (CRM data) is a business most important asset, as it provides deep insights into customer habits and trends. One way to utilise this data is to determine the customer lifetime value; segmenting by a low value, medium value, and high value is a simple but effective way to start leveraging this data. The determinants of value will differ from business to business but often will refer to the reticence of purchase, the frequency of purchase, and monetary value. This is known as the RFM technique.
In some verticals, such as healthcare and beauty, a consumer’s brand loyalty can be very high. If the customer finds a product they like, they can stay with this product for a significant time. In these instances, the upfront cost of a marketing strategy should be reflective of the lifetime cost of the consumer. In some instances, such as fast fashion, brand loyalty will be low and businesses will need to think of other ways to retain their customer base. The Cloud Alchemist (a vapour liquor brand in the US) identifies and delivers a personal touch to its customers. The company focuses on a personalised approach ranging from individual emails and feedback forms to handwritten notes in deliveries to loyalty reward points. Companies should consider the consumer as an individual, and this stems down to understanding the customer, their journey and the different touch points along the way.
To conclude, businesses should learn to adapt and implement digital strategies that can help them understand the behaviours and thought process of their customers; they should then invest in methods to retain customers by assessing touchpoints and personalising responses to these customers.