RM: Are marketers using data effectively?
MH: There are two levels that marketers need to consider when thinking about data. What they tend to do is get to the first level getting reports on Google keywords or their website traffic and so on. Any marketer will have that kind of information. But they need to go to the next level, which is understanding exactly what the individual is doing when they interact with them.
Take an example of a large financial brand we work with. You can buy financial products direct from its website. You have to go through seven pages to do it. But the company noticed that a lot of people were falling off at page six. So they asked them: why go through six pages only to stop at that point? People told them that the sixth page required them to print and sign the document. It turned out that the customers didn’t have access to a printer.
So now this company tracks individuals. If someone drops off at page six, they will give them a call later and ask if they would like the company to send them the form to sign instead.
Now, if you got that call, would it feel like a marketing call or a customer service call? It feels like a service call and that’s the point. Marketing, sales and service are integrating. An action can be marketing to you, but to the customer it must feel like it’s service.
RM: So data needs to drive more personal relationships with customers?
MH: Customers must benefit from their data being used. They should not feel it is a one-way thing. Marketing is about how you interact with customers and build long-lasting, quality relationships. But marketing can only ever be one part of the relationship. How you are served or sold to all these things will affect how you feel about a company.
At IBM, we talk about stopping thinking in silos and combining marketing, sales, service and supply. So if you offer a product, you need to deliver in all those areas. Your customers might want to order online and have it delivered between 5-7pm when they are home.
We’ve been working on combining all those elements into a single initiative called Smarter Commerce, which is about marketing not being siloed but part of the bigger business question: how do I interact with my customers?
RM: So Smarter Commerce is about working more effectively?
MH: IBM is moving into the marketing space. We are really working on building marketing leadership worldwide. Smart Commerce is about thinking more broadly than just your silo. Marketers need to realise that their customers’ opinions are far more important than how beautiful their campaigns are.
We recently talked to 1,700 chief marketing officers worldwide for a report released last month, asking them about their challenges. If you go back 20 years, IT was a small part of what businesses did. IBM helped define the role of the chief information officer. Now businesses think the chief information officer role is so important it deserves a board seat. Now IBM is trying to define the chief marketing officer.
RM: So what’s your biggest business challenge at the moment?
MH: The biggest challenge for me is the sheer size of IBM. The organisation is so much bigger and has more potential than anywhere I’ve worked before. So my challenge is: how do I work effectively with everyone, manage all my teams and make sure all my markets are being served well? My team has increased in size by five times [since I joined IBM].
How do I make sure we are serving the Chinese market effectively? Or the North American market? My marketing department is 50 people and that is just a fraction of the 400,000 people that IBM has worldwide.
“Social media is important in understanding a change in how consumers buy”
RM: What trends are you looking out for?
MH: If you are a marketer, the world has changed totally. In the past, you would have sent out pretty marketing messages and people might have bought your products. Now people browse other people’s opinions via social media.
There is a saying that 75% of people do not believe that advertisements tell the truth. I always joke that I don’t understand the 25% that think they do tell the truth. There is a serious point to that, which is that people base their purchases on other people’s experiences so much now that it’s a big challenge for marketers to work in that world. You have to make it easy for customers to find reviews of your products. And learn how to work with social channels, which is difficult at the minute.
RM: So do you think social media and its data is important? Or over-hyped?
MH: It’s true that if you look at where marketers spend money, around half still goes on traditional areas, such as TV. Social media is just a few per cent overall. So from a budget perspective, it’s not that important. Even looking at digital budgets, it would still only be 25%, so not that important.
But social media is important in understanding a change in how consumers buy. As a marketer, you need to get that, so I don’t think the impact of social media is exaggerated. You just need to find data to make it more than just trendy.
So if you have profiles of people based on what they do in your databases, extend that with social information. What do they tweet about? That’s step one. Then find a way to alternate marketing campaigns with social areas like Facebook so you can see what happens when you do things in real time.
Marketers are struggling to work out how to deal with this. After all, we can use a few things to measure social activity but it’s a new frontier. But the internet lets you measure everything and marketers are people who get that.
RM: So what’s the ultimate pitch to your CEO to get more spend for managing data effectively?
MH: Put it this way: if you are spending on TV and print, you may find it hard to figure out the value of your marketing. On the internet, however, everything can be measured so you can really understand if an advert drives people to a website and how many sales you convert. So it’s easy to work out if you are paying the right amount for that ad.
Of course, marketers haven’t been using data as effectively as they could up until now, but the clever ones will start to change.
RM: How did you come to IBM?
MH: I joined IBM as part of its acquisition of Unica and Coremetrics. I had been with Unica for a couple of years and before that I was at SPSS, which was also acquired by IBM. Before that, I ran my own company called Data Distilleries, which offered real-time marketing software and was acquired by SPSS. So I’ve been in the marketing and technology industries for 15 years.
RM: What led you to set up your own company?
MH: I set it up because I was doing research back in 1995 on data-mining technology. I was doing my PhD on that area and decided to stop to set up a company. I was talking to insurance companies, saying: “Do you know that some of your highest-risk profiles are these people?” which was what the data was telling me. And I discovered those companies didn’t know.
So I set up my company because I saw there was a lot of value in working on masses of customer data. You can find out who will churn, who will move to a competitor, and which people you can cross-sell to.
RM: What lessons have you carried over from that time to your role now?
MH: Back at Data Distilleries, we worked on real-time marketing, which is matching up what we know about people from all their online interactions their current and previous browsing behaviour and determining the content for the next internet page based on that.
Now real-time marketing is such an important part of what marketers are doing. I believe that what we were doing all those years ago was really at the forefront of what now is simply seen as using websites as marketing vehicles. Now real-time marketing is seen as common sense. Of course, companies personalise content on websites based on who you are. It’s part of analytics that is to do with vast amounts of information and taking business decisions based on that data. That is a key part of smart commerce.
Marcel Holsheimer sets out the three most crucial skills any data marketer should possess
1 The first thing someone needs to do a job like mine is to have good “left brain” thinking. You need to be creative. You need to be able to have ideas such as: “How can I use social channels to influence people’s behaviour?”
2 The second thing you need is to have “right brain” thinking. You need analytical skills so that you can effectively understand what elements are driving your business.
3 The third part is that you need to be able to get things done. I have a lot of options of areas I can pursue but I choose simply three things to go after that are really important to me right now. So there is a lot of data analysis, then we hone it right down to three things and forget about the other areas for a while.
In markets such as the UK, there are lots of training options for marketers. But I think the areas where people need to concentrate on is the digital space or anything to do with social media.
I am not sure anything really exists yet in that social area but you can get good training overall in online and that is really important.
Every marketer needs to spend their time learning about keywords so they can really understand how to personalise everything for their customers.