When it comes to marketing strategy, every business is different. You have to be: It’s a key part of your USP. However, some businesses are better than others in applying the marketing process because of their focus, how evolved their capabilities are, and the level of resources they make available.
From experience the most effective marketing businesses are the ones that focus on the customer, use insightful data to inform every decision and invest resources to exploit opportunities that best meet their customers’ needs. They have evolved their marketing capabilities to enable them to engage their customers with the most relevant products and services through the most appropriate channel at the most opportune time that yields the best result for both the customer and the business.
Getting to this level is not an easy journey. Established businesses may have amassed years of knowledge, skills and capabilities, but ensuring their data, legacy systems and thinking stay ahead of the game takes significant investment. Younger businesses might be able to leap-frog straight to the latest thinking, but the experience to truly exploit it doesn’t come cheap.
First steps: Direct Marketing and Automation
Businesses often start out with simple direct marketing techniques to select lists of prospective or existing customers that meet a short-term demand to drive (e.g.) increased sales. These lists can be produced using simple database tools and specialist technical resources, but as the number, complexity and speed of discrete campaign requirements grow, it quickly becomes a difficult problem to govern and remain agile so, marketing effectiveness can plateau.
The first major evolution is to invest in fit-for-purpose marketing automation tools that increase efficiency by helping the marketer to govern the overall activity schedule, embed test and learn techniques to help improve future targeting effectiveness, and manage the creation and execution of multiple, simultaneous activities to keep up with demand from whichever parts of the business are shouting loudest to meet immediate targets.
It is at this point that many businesses find their marketing effectiveness reaches another plateau and they get stuck just keeping up with business-as-usual. Marketing automation tools are good at ‘pushing’ campaigns that are driven by the business’ agenda and marketing calendar, but they’re not so good at being customer-friendly – e.g. was there a missed opportunity to do something better to engage the customer at a more opportune time and maximise customer value?
Being more customer-centric: Decisioning
To evolve further means overlaying a ‘pull’ approach where activity is driven by customer need and behaviour. Business rules and predictive analytics are applied through a decision engine to determine which, of all possible actions, is best in any given situation, often in 'customer time' during a transaction or interaction.
This personalisation process usually considers, for each individual customer: whether they are eligible for the action; whether it is the right timing; whether it’s the right level of relevance and appropriateness; whether it would generate the right outcome; and what the relative priority is in achieving the business goal.
Consequently, businesses tend to arrive at the third plateau of marketing effectiveness when the complexity of managing this decisioning process becomes too great: The number of different situations or actions has grown significantly, or overarching goals and constraints such as budgets, capacity or targets are inappropriate to apply at a customer level.
The next generation: Optimisation
The last evolutionary step is to optimise each decision to maximise the overall objective, such as return on investment and profitability, while satisfying all constraints, such as budget spend and enhancing customer engagement. This involves sophisticated algorithms to trade-off the different decision factors in each action to determine which best meet the overall objective while satisfying the constraints.
This might sound complicated…and it often is, but the pay-off is the business performance uplift it can provide, which can be significant. It also provides true, top-down control over marketing activity so, for example, flexing the decision factors provides an opportunity to explore different ‘what-if?’ scenarios and see which gives the best mix of business and customer benefits.
Keep moving forward
Whilst making optimal decisions could be the ultimate evolution, marketing effectiveness can still reach a plateau because your data, predictions and actions can quickly go ‘out of date’ in today’s marketplace: Every customer is different and has constantly evolving needs and interests that someone will be able to satisfy.
Consequently, the most important tools in your toolbox are insight and agility: Continually testing new ideas, actions and situations with customers to learn what works and what needs refining (or discarding) and then quickly adapting the capabilities of the business to generate value for your customers.
Real customer value is created by constantly listening to customer needs and adapting the business to deliver them.
Leading organisations constantly explore new ways to develop insights across customers and markets, pushing boundaries by creating value propositions around their ability to truly understand the customer and identify real life problems to be solved efficiently. They do this by continually testing different ideas on different customers and measuring the effect on a variety of dimensions such as customer relevance, opt-out, satisfaction, revenue, utilisation and churn.
Measurement enables these businesses to learn about which ideas work best for each customer and which do not. These learnings are used to refine their ideas for the next testing cycle and continues the thirst for knowledge about what resonates best with each customer to maximise their value and engagement.
This continual test-learn-refine methodology is central to their business credo and permeates everything they do, including their thinking, product design and manufacturing, customer relationship management (CRM), sales, analytics, service and marketing.
Leading organisations constantly explore new ways to develop insights across customers and markets, pushing boundaries by creating value propositions around their ability to truly understand the customer and identify real life problems to be solved efficiently. They do this by capturing and maintaining a holistic view of the customer, bringing together all possible information from internal and external sources and then analysing and interpreting this ‘big data’ to identify realisable opportunities to maximise value. Every customer interaction becomes a research project - what if we did A or B or C for this customer? This continual test-learn-refine methodology is central to their business credo and permeates everything they do, including their thinking, product design, manufacturing, CRM and marketing.