When Online Goes Offline
Boost your direct mail results with knowledge from the Net
October 2007 By William Hakes
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Marketers tend to approach online and offline marketing as two separate challenges that require different sets of solutions. It often is assumed that in the world of online marketing, online data is the only data that matters. Similarly, when executing direct mail programs, companies believe that the only relevant information is offline knowledge. Correct approach, right? Wrong. Very wrong.
With regard to online marketing campaigns, marketing firms have traditionally struggled to extract and leverage information from their Web analytics packages. Recently, however, this knowledge has become easier to grasp and process as some firms have homed in on how best to understand information, from clickstream data to keyword searches. Despite this progress, problems still exist, as online marketing teams devote their labor to focusing on online measurement to enhance online returns. Online marketing is successfully leveraging information online, but a world of opportunity exists if online marketing teams can learn how to leverage their data offline.
Why Leverage Online Knowledge Offline? How Do We Do It?
The necessity of integrating online and offline data depends entirely on your business situation and objectives. For example, this concern should not be something that keeps Amazon.com awake at night. But the importance of integrating data cannot be overemphasized when it comes to more traditional, customer-oriented firms that perform classical CRM activities, including acquisition, upsell, retention and reacquisition. For firms in industries such as telecom, financial services, hospitality, retail and consumer packaged goods, the combination of a robust Web presence and a forward-looking customer knowledge strategy must include the integration of online and offline data. Put simply, if your firm is like most firms today, your “standard” data is getting stale, and it’s time to up the ante. New data will foster fresh ideas, spurred by new information that can be gleaned from your customers. This is the kick-start your direct mail programs needs.
To implement this strategy, think of ways to establish a linkage between online and offline arenas, such as an account number that can be used as the data match-key. While you will secure this linkage on only a portion of your customers and prospects (perhaps from 5 percent to 25 percent will be linked across channels), this is acceptable; gone are the days of giant one-size-fits-all direct mail campaigns. With today’s rampant use of segmentation and the widespread application of customizable print technology, direct mail campaigns are, in fact, growing, not shrinking. You can see hundreds (indeed, sometimes thousands) of different versions of direct mail executed with surprising efficiency. Firms can profitably develop small-scale campaigns to leverage key aspects of knowledge.
Here are two cases where this approach has worked well. In the first instance, several telecom and cable firms are alerted when a customer shops for a product or service online without purchasing it, and the firms then are able to send follow-up direct mail with special incentives. The online data is relevant in terms of content and especially with regard to timing. In the second case, a number of credit card companies collect data that shows when an applicant has backed out of the online application system halfway through the process. This activity also can be followed up with direct mail to capitalize on interested consumers who didn’t convert online.
Challenges in Integration
Despite the benefits of using data across numerous channels, the concept of capturing online data and leveraging it offline has its skeptics. This skepticism is caused by the following: the legal waters are murky; linkage itself is very difficult; and the coverage of a firm’s customer base is partial at best.
Of primary concern is the presence of legal restrictions. For example, how much online history are you allowed to capture and keep? The industry has yet to decide on what’s acceptable. Regardless, as evidenced by the lucrative acquisition of behavioral targeting firm Tacoda by AOL, navigation patterns and history are information that businesses are trying to tap into to drive ROI online. (For offline campaigns, firms should tread lightly in this arena and err on the side of only leveraging data gained from your own Web site.) You also must wrangle with the issue of linkage: Even if data is captured, there is no guarantee it can be linked with offline records. Whether you are simply storing knowledge of the referring Web site or storing navigation paths, establishing linkage to the offline world in today’s environment is slow, messy and manual. Many companies aggregate data based on IP addresses resulting from geo-targeting, but this information is difficult to leverage into a direct mail tactic.
The key to being successful in this realm is to enable a linkage at a customer level. While this requires a meeting of the minds between marketing and IT teams, as well as customers who self-identify at some point while they are on your site, the benefits of this sort of linkage can be very positive.
Most customers will be “missing” when it comes to online attributes. People delete cookies. Customers shop a site from work. Many online surfers have absolutely no destination and no intent, thereby making online patterns difficult to detect. These are all tangible problems and valid criticisms, but it is important not to forget that the purpose of direct marketing is not to be right all the time. Rather, the purpose is simply to hit the right person with the right message at the right time. While this targeting doesn’t always result in a conversion, success is all about leveraging your data. And offline access to online data is truly a new lever that will generate incremental lift.
Accelerants to Integration
Five things that will drive the infusion of online data into direct mail campaigns:
1. Customers are paying more bills online. This means that if companies leverage cookie and IP-based technology with customer log-ins, linking online behavior with more traditional customer knowledge will become easier.
2. Customized micro-segments and more social networking-based marketing programs will become hot. As marketers grow more savvy, firms are more equipped than ever to leverage customer data from new online sources. Leveraging this data opens up new rounds of predictive models, which will help enhance ROI.
3. Web analytics packages are the next generation of CRM software. Rather than find ways to pull data from the Web to traditional offline CRM software, firms will push the most important bits of offline knowledge onto Web platforms (from Omniture and others) with built-in, easier to use analytical engines. Moreover, firms seem to be finally allocating additional labor to development of implementation.
4. Firms will learn what data is important online versus that which is simply interesting. Thousands of bits of information are available when a customer visits a site, most of which are not important in optimizing offers or ads. Firms are starting to spend more time trying to determine what’s important—which 10 nuggets of the thousands are relevant—to be more efficient in online data capture. As such, the scope of feeding online data into offline sources becomes more narrow and feasible.
5. Firms are developing more proactive customer knowledge strategies. Ten years ago, firms bought demographic data from vendors. Today, knowledge about your customers can come from blogs, mining unstructured text, voice recognition, etc. Customer insight exists in myriad places, and firms are starting to recognize this.
Integrating online and offline data is the key to a next-generation customer knowledge strategy leveraged across all channels. Online data is an enormous driver of analytical intelligence, which is the key to optimizing Web real estate—from offers and ads to relevant content. Online data, if leveraged appropriately, will provide a welcome catalyst to the straightforward data that currently feeds most firms’ direct marketing approaches. If these approaches are well-fed with a diet rich in untapped data, improved ROI on direct mail is sure to follow.
William Hakes, Ph.D., is president of analytics at Aspen Marketing Services, an integrated marketing services firm with headquarters in Chicago. He has more than 12 years of experience in advanced analytics, and is a regular speaker/instructor at Direct Marketing Association conferences, as well as at Georgia State University and Notre Dame University. Along with Aspen’s Director of Web Analytics Greg Asman, Hakes authors a blog on analytics (www.aspenanalytics.blogspot.com). He can be reached at whakes@aspenms.com.
With regard to online marketing campaigns, marketing firms have traditionally struggled to extract and leverage information from their Web analytics packages. Recently, however, this knowledge has become easier to grasp and process as some firms have homed in on how best to understand information, from clickstream data to keyword searches. Despite this progress, problems still exist, as online marketing teams devote their labor to focusing on online measurement to enhance online returns. Online marketing is successfully leveraging information online, but a world of opportunity exists if online marketing teams can learn how to leverage their data offline.
Why Leverage Online Knowledge Offline? How Do We Do It?
The necessity of integrating online and offline data depends entirely on your business situation and objectives. For example, this concern should not be something that keeps Amazon.com awake at night. But the importance of integrating data cannot be overemphasized when it comes to more traditional, customer-oriented firms that perform classical CRM activities, including acquisition, upsell, retention and reacquisition. For firms in industries such as telecom, financial services, hospitality, retail and consumer packaged goods, the combination of a robust Web presence and a forward-looking customer knowledge strategy must include the integration of online and offline data. Put simply, if your firm is like most firms today, your “standard” data is getting stale, and it’s time to up the ante. New data will foster fresh ideas, spurred by new information that can be gleaned from your customers. This is the kick-start your direct mail programs needs.
To implement this strategy, think of ways to establish a linkage between online and offline arenas, such as an account number that can be used as the data match-key. While you will secure this linkage on only a portion of your customers and prospects (perhaps from 5 percent to 25 percent will be linked across channels), this is acceptable; gone are the days of giant one-size-fits-all direct mail campaigns. With today’s rampant use of segmentation and the widespread application of customizable print technology, direct mail campaigns are, in fact, growing, not shrinking. You can see hundreds (indeed, sometimes thousands) of different versions of direct mail executed with surprising efficiency. Firms can profitably develop small-scale campaigns to leverage key aspects of knowledge.
Here are two cases where this approach has worked well. In the first instance, several telecom and cable firms are alerted when a customer shops for a product or service online without purchasing it, and the firms then are able to send follow-up direct mail with special incentives. The online data is relevant in terms of content and especially with regard to timing. In the second case, a number of credit card companies collect data that shows when an applicant has backed out of the online application system halfway through the process. This activity also can be followed up with direct mail to capitalize on interested consumers who didn’t convert online.
Challenges in Integration
Despite the benefits of using data across numerous channels, the concept of capturing online data and leveraging it offline has its skeptics. This skepticism is caused by the following: the legal waters are murky; linkage itself is very difficult; and the coverage of a firm’s customer base is partial at best.
Of primary concern is the presence of legal restrictions. For example, how much online history are you allowed to capture and keep? The industry has yet to decide on what’s acceptable. Regardless, as evidenced by the lucrative acquisition of behavioral targeting firm Tacoda by AOL, navigation patterns and history are information that businesses are trying to tap into to drive ROI online. (For offline campaigns, firms should tread lightly in this arena and err on the side of only leveraging data gained from your own Web site.) You also must wrangle with the issue of linkage: Even if data is captured, there is no guarantee it can be linked with offline records. Whether you are simply storing knowledge of the referring Web site or storing navigation paths, establishing linkage to the offline world in today’s environment is slow, messy and manual. Many companies aggregate data based on IP addresses resulting from geo-targeting, but this information is difficult to leverage into a direct mail tactic.
The key to being successful in this realm is to enable a linkage at a customer level. While this requires a meeting of the minds between marketing and IT teams, as well as customers who self-identify at some point while they are on your site, the benefits of this sort of linkage can be very positive.
Most customers will be “missing” when it comes to online attributes. People delete cookies. Customers shop a site from work. Many online surfers have absolutely no destination and no intent, thereby making online patterns difficult to detect. These are all tangible problems and valid criticisms, but it is important not to forget that the purpose of direct marketing is not to be right all the time. Rather, the purpose is simply to hit the right person with the right message at the right time. While this targeting doesn’t always result in a conversion, success is all about leveraging your data. And offline access to online data is truly a new lever that will generate incremental lift.
Accelerants to Integration
Five things that will drive the infusion of online data into direct mail campaigns:
1. Customers are paying more bills online. This means that if companies leverage cookie and IP-based technology with customer log-ins, linking online behavior with more traditional customer knowledge will become easier.
2. Customized micro-segments and more social networking-based marketing programs will become hot. As marketers grow more savvy, firms are more equipped than ever to leverage customer data from new online sources. Leveraging this data opens up new rounds of predictive models, which will help enhance ROI.
3. Web analytics packages are the next generation of CRM software. Rather than find ways to pull data from the Web to traditional offline CRM software, firms will push the most important bits of offline knowledge onto Web platforms (from Omniture and others) with built-in, easier to use analytical engines. Moreover, firms seem to be finally allocating additional labor to development of implementation.
4. Firms will learn what data is important online versus that which is simply interesting. Thousands of bits of information are available when a customer visits a site, most of which are not important in optimizing offers or ads. Firms are starting to spend more time trying to determine what’s important—which 10 nuggets of the thousands are relevant—to be more efficient in online data capture. As such, the scope of feeding online data into offline sources becomes more narrow and feasible.
5. Firms are developing more proactive customer knowledge strategies. Ten years ago, firms bought demographic data from vendors. Today, knowledge about your customers can come from blogs, mining unstructured text, voice recognition, etc. Customer insight exists in myriad places, and firms are starting to recognize this.
Integrating online and offline data is the key to a next-generation customer knowledge strategy leveraged across all channels. Online data is an enormous driver of analytical intelligence, which is the key to optimizing Web real estate—from offers and ads to relevant content. Online data, if leveraged appropriately, will provide a welcome catalyst to the straightforward data that currently feeds most firms’ direct marketing approaches. If these approaches are well-fed with a diet rich in untapped data, improved ROI on direct mail is sure to follow.
William Hakes, Ph.D., is president of analytics at Aspen Marketing Services, an integrated marketing services firm with headquarters in Chicago. He has more than 12 years of experience in advanced analytics, and is a regular speaker/instructor at Direct Marketing Association conferences, as well as at Georgia State University and Notre Dame University. Along with Aspen’s Director of Web Analytics Greg Asman, Hakes authors a blog on analytics (www.aspenanalytics.blogspot.com). He can be reached at whakes@aspenms.com.
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