Mind the Intelligence Gap: What About Engagement?

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By: Wise Marketer Staff |

Posted on May 26, 2015

With buzzwords like 'omnichannel engagement' and 'customer loyalty' inundating marketing circles, many marketers have been duped into rushing their customer engagements devoid of any fundamental understanding of their customers, often resulting in ineffective, one-size-fits all campaigns that lack consumer motivation and that ultimately hurt the brand's image and erode shopper loyalty, according to Mark Harrington of Clutch.

However, the concept and technology behind Consumer Management is helping leading brands to effectively mind this intelligence gap. And, while this gap is not surprising given the issues presented by fragmented customer data technology platforms, the good news for marketers is that they likely have a wealth of consumer data to learn from, the key is centralising this intelligence. Consumer are leaving digital footprints across an array of technologies they regularly engage with, from point-of-sale systems and ecommerce platforms to mobile applications and social networks.

Today the average brand manages four internal customer systems, five social networks and one mobile app, all of which deliver a massive output of ongoing customer data. However, within most technology infrastructures, these systems exist as silos with an inability to interact to share and collate data. In fact, often when a customer interacts across multiple channels of a brand, say ecommerce and in-store, they are "seen" as two individual customers and treated as such.

The Intelligence Gap
The intelligence gap is widening between the have and have-not brands. Those brands that have genuine customer intelligence are gaining a growing competitive advantage over those brands that lack it. They understand how customers shop, when, where and what they buy and when they may be dropping off. This gives the informed brand the engage on a personal, relevant level at each of these customer stages to motivate action and earn trust and loyalty.

"Take Eddie Bauer, for example. I am a fan of their "wrinkle-free" dress shirts and jeans. So much so, that I joined their "Friends" loyalty programme a few years back. I purchase their items both online and in-store, so they presumably have data on my channel choice, product preference, frequency and timing of purchase," explained Harrington. "Yet, their only attempt to motivate me over the years has been a periodic, generic US$5 coupon (via email or direct mail) with no recommended products or personalised messaging. This is a continuous missed opportunity considering I have an affinity for the brand, they have a wealth of data on me and I gave them permission to engage me. When I buy shirts they could be promoting matching pants or sweaters or belts. Or they could be introducing new patterns and colours of my preferred shirt style when they come out."

Their challenge is more than likely rooted in data fragmentation and a resulting lack of customer intelligence. They have the information on me, but chances are they lack the capability to access it and synthesize it for strategic use.

Eddie Bauer is not alone in this by any stretch though. On the whole, brands are simply ignoring the basics of identifying their most valuable customers (MVCs) to engage them on an effective, personal level. What's interesting is that many premier brands say they want to avoid being labelled as a "discount brand," yet many of these same companies solely rely on one-size-fits-all discounts, promotions or sales, which often unnecessarily erode margins and condition consumers to expect and hold out for a discount, transforming their perception to that of the feared "discount brand."

Beyond this, it typically costs a brand seven times more to acquire a new customer then to retain an existing one, yet the average marketing budget has upwards of 80% earmarked for customer acquisition. It's a disconnect many brands suffer from but are unsure how shift.

Effective Engagement
The inability to synthesize cross-channel customer data forces many brands to treat a single customer as multiple individuals, usually one shopper for each channel they interact with. So if you buy an item in-store and online, many brands will see you as two different consumers, one for each channel due to the fragmented data across isolated technology platforms.

This results in many brands unable to have a holistic view of a single customer's activity and behaviour.

Four basic steps
So how do you effectively mobile your data so it becomes strategic revenue driver and competitive advantage? It comes down to four basic steps:

  1. Centralise and synthesize fragmented customer data from every source (e.g. POS, ecommerce, mobile and social) into a "hub" to gain a holistic customer view.
  2. Analyse the resulting intelligence and analytics to develop robust customer personas, segments and identify your different MVCs.
  3. Engage your MVCs based on personalised dimensions like their shopping tendencies, channel preference, product purchases, frequency, etc.
  4. Optimize this process by reviewing the changing information at a regular frequency to understand how your customers' behaviours are shifting.

"Many brands see this is a Herculean undertaking, requiring massive resources and budget that involves ripping out and retrofitting technology systems. They consider customer intelligence as a game changer and automatically think to the task of changing out point-of-sale platforms and terminals and swapping out CRM systems, which stops the marketer in their tracks," said Harrington.

But today, Consumer Management platform and Cross-Channel Marketing technology exists which integrates each data source into a centralised location while collating and synthesizing the data to produce customer analytics, insights, personas and segments. This allows the brand to get a strategic view of their customers, while identifying their most valuable customers to personally engage them with a focus on purchase motivation, earning loyalty and even driving evangelism.

"The key is to focus on understanding the customer before your initiate generic and uninformed and engagements that lack relevancy and can ultimately damage your brand perception due to a 'one size fits all' approach in lieu of an effective, personalised engagement strategy," concluded Harrington.

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