Digital natives dig for data from another level

As marketers continue to explore a wider variety of digital technologies, our panel of senior industry figures concludes that data remains the driving force of any brand strategy.

The panel (l-r)

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Ruth Mortimer (Chair), associate editor, Marketing Week
Chris Terelak, marketing director, Charles Tyrwhitt
Phil Gates, marketing director, Rank Interactive
Simon Holder, multichannel development director, Wickes
Matt Thomson, group marketing director, Trader Media Group
Sion O’Connor, marketing director, Vanquis Bank
Norman Bekker, manager of CRM and data insight, Whitbread
Victoria Finn, head of marketing and communications, Pendragon
Adrian Wells, head of marketing, The Football Association
Robin Goad, director of research, Experian Hitwise
Jon Buss, managing director, Experian Hitwise and Experian Digital Advertising Services

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Marketing Week (MW): Does multichannel mean you have to market your brand using every available channel?

Adrian Wells (AW): We have to choose our channels carefully at the FA. Our budget for an England match is just £40,000 to sell out a stadium of 90,000 seats. In an ideal world, we’ll get to a position where we have enough free channels, databases, Facebook fans and Twitter followers that we’ll never have to pay for an ad. That’s our vision and we’re some way from it.

Phil Gates (PG): One of the lessons I’ve learned is the importance of building a commercial model from the start. Then you can directly measure spending a certain amount on a channel and what that generates. If I want to spend £10,000 on pay per click for one particular online gambling brand, I know the cost per action for a customer is a certain sum for that channel. Therefore, it’s going to drive a certain volume of registrations and we’ll know the lifetime value, churn, retention figures, final value and percentage win that we make on that channel.

Victoria Finn (VF): A car is a discretionary purchase and the research process can be quite exhaustive. As a car retail network, it’s making sure that we’re involved at certain points of the research process so that they immediately look to us further down the journey. Our market entirely dictates what channels we pick.

Matt Thompson (MT): There’s an awful lot of test and learn we’ve got some campaigns right over the years and we’ve got some very wrong. We really do focus our energies on understanding the motorist, understanding their needs and those of the dealers.

MW: Do you focus on one main channel or take a media neutral approach?

Chris Terelak (CT): As a distance selling retailer, Charles Tyrwhitt relies on direct mail and catalogues and designs our DM offer to encourage phone responses. There are channels that we’d like to explore, but as a medium-size business the budgets just aren’t there to go into TV. As and when we do, it will be tracked-response TV.

Simon Holder (SH): Wickes already has physical stores, telephone ordering and a transactional website. We are now moving into mobile because customers will want to communicate through different channels at different times. We have different types of customer on Facebook at varying types of day. Users don’t buy from us directly via Facebook. The bit that we’re trying to figure out is if we can actually identify Facebook customers and then track them back into our customer relationship management system. We haven’t got there yet as we’re only just starting to play around with it. Next year, we’ll be looking at it much more seriously.

Norman Bekker (NB): We want to be on Facebook and Twitter because everyone else is doing it. However, you get to a point where you have so many channels available and I’m sure that next year there will be another channel. We need to get ready to be able to respond to that consumer power.

MW: What is the most effective way of tracking the customer across all your channels?

Sion O’Connor (SO): It’s a very interesting tension within marketing. Companies used to take one of two approaches and neither was right or wrong. One approach is to say that you’re going to track everything because it all has to be measurable. The other approach takes a more pragmatic view.

I previously worked for a company that measured everything, while our competitors ran massive above-the-line campaigns. We knew that our rival couldn’t track everything but we couldn’t help but feel that we were missing a piece because we were not prepared to go into some media channels as we couldn’t track them.

NB: In the hotel model, the property owners sign up to a marketing brand rather like a franchisee but they pay a fee. In exchange for that, they’re expecting you to drive a lot of traffic to them. We call it a marketing contribution and that is how the majority of hotels are measured. We will sit with the owners and show them “this is what we’ve done for you, this is what we’ve done for the website and this is what we’ve done for call centres” because then they don’t have to invest in so much tracking themselves.

SH: We measure brand equity quite closely. We do know what’s happening to our brand perception through TV, what it’s doing for our business and we’ve got an idea of what traffic is being driven to the different channels.

SO: As marketers who work for very commercial organisations, it’s incredibly tough to make the leap of faith. You have to say: “I’ve got this piece of data and this other information and we’re hypothesising that the two together deliver this.” Sometimes I’m expected to reduce everything I do into pounds and pence, but if we do that we’re in danger of leaving value on the table.

Value depends on context and channel. Within DM, it’s relatively easy to demonstrate the value of any creative changes you make. Then you start looking at something like display advertising, which is an incredibly expensive channel for us, but we do know it drives a halo effect. That halo comes back to us in terms of responses through cost-effective channels such as paid search. On paper, display looks unpalatable but the halo impact means that if you take the ROI of the entire thing, then it’s phenomenal value.

MT: We’ve got smarter in aligning the timing of pay-per-click activity and search optimisation activity to run with our TV bursts. It works like a ratchet; you force traffic up and you don’t let it fall away immediately. That is the best demonstrator of the halo effect.

MW: How do you justify the channel mix to other executives within your business?

VF: I am expected to be absolutely into the data and tracking everything. Ten years ago, we had a call centre, then a contact centre including email and SMS and now we call that a context centre. That’s where we can deal with all the different channels where people want to talk to us. That’s been the evolution of our retention strategy.

NB: We’ve had quite a few research and development projects because we had to prove that CRM was going to work for the business. Our “stay three times and get a night free” promotion was a research project to demonstrate how customers behave and how we communicate to them. We’re releasing a batch of rooms onto the market from now until the end of February and we’re telling existing customers first through email, Facebook and Twitter. It’s positioned as “we’re telling you first because you’re a valued customer” before we land it on television.

MW: What do you feel about newer social channels?

SO: We’ve been considering some initiatives that enable us to collect more customer data and we’ve been wondering what is the best channel to put it on. We need to be able to migrate to something more appropriate if there is ever massive consumer fatigue on Facebook.

CT: We looked at the number of fans on Facebook and followers on Twitter and we’ve done some toe-in-the-water activity to try and promote interest in our demographic, but it doesn’t seem to give any real leverage.

SH: Ten years ago, if we had a dissatisfied customer, they’d tell 10 people. If we have one now, they can tell 50 million. We’re now having to be much more customer-centric in stores. It’s not about how many people will buy, it’s how many people won’t buy from you if they see negative comments on Facebook. We need to protect customer value rather than making sales. However, I don’t yet know how you measure that.

PG: You do get some negative customer comments on social media but taking an active approach “this is my email address, get in touch” starts turning a negative into a positive. You are demonstrating to people who are reading those comments that this company is listening to them as an individual.

AW: You can’t be silent on Twitter. If you open a channel, you’ve got to be there and be able to respond. So we interact rather than react as much as we can and try to seed some positive debate. It’s incredibly challenging but our strategy is to engage with as many people where they want to be in the way they want to be engaged with whether that’s mobile, Twitter or Foursquare.

The last step is how to monetise that. How do you invite them to the shop or invite them to buy tickets in a subtle way? You don’t try and hit them round the head with marketing to get them to buy because that’s when you generate even more negatives.

“The bit that we’re trying to figure out is if we can identify Facebook customers and then track them back into our CRM”

Simon Holder, Wickes

MW: Where do you see innovation in multichannel marketing?

Jon Buss (JB): The key thing here is to understand influencers. You need to know how to identify and then monetise them. There’s an attribution model on Facebook that allows you to see if someone buys within your network, maybe two or three connections down the line. That can be attributed back to that particular display ad and the person that clicked on it originally gets the benefit, such as cashback or loyalty points. That is quite an interesting innovation in understanding who the influencers are and how you can maximise their power. When you can identify who they are, you can push out more messages to them as they have a voice and their connections clearly listen to that voice.

Facebook is still a bit too generic with the ’like’ button. A lot of people would like to own a BMW but it doesn’t mean that they will actually buy one. Surely Facebook is going to start introducing buttons that say ’watched’ or ’bought’, not just ’like’. Then it would start to segment and at that point you’ve got a target audience out there advocating not only do I like BMW but I own a BMW and therefore I’m an influencer.

NB: We used QR codes for our “stay three times and get a night free” marketing programme. You can link up by just scanning the code and we’re measuring that to see what the effect is.

PG: We’ve taken strip ads with QR codes in Metro every day for our Blue Square gambling brand. Unfortunately only about 40% of the UK population understands what a QR code is and, according to Marketing Week, only about 11% of people actually use them.

JB: In technologies such as near-field communication, the mechanism is there but do we have the right insight and the right data? This comes back to what data we have, where are we keeping it, do we understand its power, and how do we mine it? That’s one to develop further because 40% of customers use their phones in store so if you can give them more information, maybe you can keep them in your shop rather than have them looking at everyone else’s channels to buy the same products.

MW: What kind of data is most important to collect?

CT: I believe very strongly in data-driven marketing but I totally accept that you’ve got to have leaps of faith and have bloody-minded people who will take risks. If you don’t you become predictable and eventually a dead brand.

NB: We are very good at measuring how many rooms we sell but we struggle to link that back to the customer. What we’re looking at is relationship modelling and handing that information back to the sales force.

VF: We find out quite a lot about people through our CRM diaries. We know when a customer’s MoT is due, their annual mileage, whether their car is for business or pleasure and how many vehicles they have. Our data is an asset but it’s all about cleansing it frequently.

AW: You become a mathematician essentially. Cutting data, segmenting and looking for the trends. The art of marketing is moving on.

MT: It’s getting broader. You’ve got to understand lifestage and lifestyle as well as the core parts of motoring to know when you should be talking to people and when they’re ideally in the market.

SO: What distinguishes excellent data-driven marketing from good is the interpretation of that data. We must analyse that behavioural data in the context of social trends. If that customer has bought a car every three years slavishly and suddenly year three is up and they haven’t come in, what’s driving that?

PG: Customer insight for us is a stated strategy. It’s at the core of everything we do. We ask our customers on a regular basis for their view. That’s almost like marketing without trying because they like being involved.

MW: Which brands are getting multichannel marketing right?

MT: Apple. I’m going to the commercial results it has achieved and where the brand sits. It’s a very impressive delivery and when Apple establishes the relationship, it is ongoing and appropriate. It’s not invasive and it’s helpful.

JB: Everything that you do with Apple is linked around your ID. It captures that when you download an app, music or buy a device. Everything is through an email address that you put in there at the start. So it has got this pin and that’s why I think it does it well.

MW: The IPA has recently defined four stages of multichannel integration none, ad-led, brand-led and participation-led. Do you subscribe to these?

SC: I’m not sure that I’d agree with those definitions. These are narrow definitions focusing on the upfront sales element. To make it really work, you need integration. The key for us is to make it easy for the customer in their daily life.

AW: I hate defined models. There are lots of theories and ideas but you lose the personal touch. It all starts from what people’s opinions are and how much they agree with your brand. It just isn’t accurate.

VF: Everyone wants to have integration-led marketing. It depends where we are in our relationship with the customer. Are we advertising to them or are they an advocate? Then we move towards the ongoing dialogue.

JB: It’s about engaging across all the different mechanisms and that’s where we see most of the success with our clients. Experimentation, understanding the channels where they want to engage with you and then articulating the right message in those channels.

SH: It’s too narrow. I’m not sure how many people think holistically around campaigns, balancing all the channels properly.

Robin Goad: I recognise these models more than the others. It would be interesting to know how participation-led integration is defined. Customer, data or segment-led would be more effective.

PG: I wouldn’t define ourselves in these categories. It comes back to letting the customer choose how they want to interact with us.

CT: I don’t think it’s possible for customers to interact with you at different levels across those models. I also think it’s possible for brands in the whole multichannel debate to understand the weighting of the different channels.

MT: What leads good integration is understanding the particular customer you’re trying to attract and the outcome that you want. You have to find the appropriate numbers at the appropriate time. Our customer is the motorist. That’s what should lead this. The rest follows.

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