Follow the evolution of customer target marketing to identify techniques that can boost your customer engagement — and ROI.
The mantra of customer relationship management (CRM) and customer targeting has always been to deliver the right message to the right customer at the right time. In the early days of direct marketing, this typically meant sending a direct mail piece to a large customer spend segment, such as the top 10 percent of spenders. With the advent of email, many marketers simply transitioned their direct marketing program from mail to email. This transition enabled us to communicate to a broader audience much more frequently at much lower cost.
As CRM strategy became more sophisticated, direct mail made a resurgence. Marketers recognized that direct mail actually drove higher ROI than the less expensive digital channel when targeting the right customer segment with the correct content or message. This revelation lead to an evolution: The mantra of CRM could now be said to be, “right customer, right message, right time, right channel.”
Customer Targeting with Increasing Digital Channels
In the last few years, the profusion of available digital channels and tracking have made it both more important and more difficult than ever to deliver on this evolved CRM mantra. Email and direct mail are still viable and thriving communication channels. SMS and push messaging enable us to reach customers on the phones they carry in their hands. Search, social media platforms and digital advertising enable us to intercept customers even when they are not actively engaging with our brands.
How do we determine which channel to use for which strategy or customer segment? Which message do we send? When do we send it? To answer these questions, we should always go back to the data.
Data Is Essential for Cross-Channel Customer Targeting
Traditional profile data is always important, and purchase data is still king, but we should also take into account the more subtle data that customers now provide through their online activity:
- What products are they looking at on our website?
- What channel are they using to interact with us?
- Are they using our app or our mobile website?
- How are they interacting with us in social media?
- What terms are they searching on Google?
- What other websites are they visiting?
- Are they visiting our competitors?
Looking at these behavioral signals, we can infer what customers are thinking about, where they are in the purchase cycle, perhaps even how loyal they are to us. Advances in data management platforms (DMPs) and demand side platforms (DSPs) enable marketers to track customer behavior and utilize that information to target them across digital channels with relevant content.
We can now use this flood of data to micro-target customers, reaching them when and where they are most receptive to our messages. Rather than trying to determine which channel is the best for which strategy, perhaps a better approach is to think about how to leverage the different channels together to enhance an overall customer target marketing strategy.
Digital Ads + Social Media Advertising + Email = A More Effective Cross-Channel Retargeting Strategy
Retargeting is a classic CRM strategy that can easily leverage cross-channel communications. Retargeting emails often drive some of the highest response rates and ROI; expanding that strategy to other digital channels can improve ROI even further. An enhanced retargeting strategy leveraging multiple channels will enable a marketer to talk to a customer about relevant products wherever they happen to be, whether that is on their phone, on their email or on Facebook.
Amazon uses an effective digital retargeting combination that utilizes both the specific product that a customer viewed and related product that might better suit their needs.
The customer who received the above retargeting communications looked at the bootcut jeans on Amazon.com but did not put them in her basket or purchase them. She was served the above scrolling ad on Facebook, followed by the banner ad on a news website. Interestingly, while the Facebook ad featured the exact product the customer viewed, the banner ad featured a related but different item. This approach should drive an overall improved response rate, as it increases the possibility of the product appealing to the customer.
Amazon continues to pull their retargeting strategy through emails as well. The same customer is opted into Amazon’s daily deal emails. The featured product in the email was related (a pair of jeans from a different brand), though not the same.
This “product variety” approach to customer retargeting delivers several messages for Amazon: It reminds the customer of the product they looked at, while also telling them that Amazon has a broader product range that they may want to explore. Each of these channels (social media, digital banner ads and emails) leverage the same dynamic product feed and should ultimately drive higher ROI for the overall customer targeting strategy.
Be Careful Not to Over-Communicate with Cross-Channel Customer Targeting
With all these exciting new channels opening up for CRM, it would be easy to overwhelm customers with messaging across them all. Cross-channel communications are more effective when paired with traditional CRM metrics. When we communicate with customers in multiple different channels, it is important to implement vigorous CRM practices, including using hold-out groups to track ROI, response rates, conversion, spend and opt-outs wherever possible. If increasing communications start to negatively impact a key performance metric (KPI), it may be necessary to adjust the frequency or content of communications in one or more channels.
A Customer Targeting Technique That Moves Beyond Traditional CRM Channels
As the Amazon example above shows, the most effective CRM teams work with the media team and the social media team to drive and coordinate multi-channel targeting and messages. Because CRM marketers focus on targeted communications for specific customer segments, we have historically left traditional marketing channels, such as broadcast, to the general marketers, while we focus on direct mail, email and, to a lesser extent, mobile.
However, addressable TV technology has transformed TV into a viable CRM channel. Google defines addressable TV advertising as “… the ability to show different ads to different households while they are watching the same program. With the help of addressable advertising, advertisers can move beyond large-scale traditional TV ad buys, to focus on relevance and impact.”1
Although addressable TV is in its infancy, the technology is rapidly advancing. Enhanced data and ad serving capabilities will enable us to essentially implement CRM tactics in a broadcast channel. In the current phase of addressable TV, the marketer can define the target customer segment using first-, second- and third-party data. The cable provider then serves the ad to customers who fit the defined segment.
In other words, customers who live next door to each other and view the same television show at the same time may see different ads if their cable provider is serving up addressable ads. Currently, Cablevision, DirectTV, Dish Network and Comcast (VOD) offer addressable ad options. The availability will continue to expand, as more cable operators begin to offer the technology. The key to a successful entry into addressable TV will be to apply the same test-and-learn rigor to TV as is applied to more traditional CRM channels.
The Mantra Remains the Same for Customer Target Marketers
As channels proliferate, data becomes ever more available and complex, making it more challenging to identify the correct time and place to send a message. The best way forward is to hold to the traditional CRM discipline of test and learn, accompanied by strong KPI tracking. This will enable you to expand your CRM strategy into a broader channel range while ensuring that you drive engagement with your customer base. The mantra is still to deliver the right message to the right customer at the right time — and now, in the right channel.
Leigh Allbritton is a multi-channel marketing and CRM expert with a passion for the innovative development, excellent execution and outstanding performance of measurable, one-to-one marketing strategies and effective awareness campaigns. Her experience includes working with The Home Depot, The Neiman Marcus Group, PETCO Animal Supplies, Rockfish Interactive and RAPP.
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1“Addressable TV Advertising: Creating a Better, More Personal TV and Video Experience,” Thinkwithgoogle.com, published Jun3 2016, https://www.thinkwithgoogle.com/marketing-resources/addressable-tv-advertising-personal-video-experience/, accessed Feb. 3, 2017