Clear the Marketing Clutter: Data-Driven Segmentation for Accurate Target Marketing
In today's competitive, dynamic business landscape, the digital marketplace has become the most prominent marketing medium. This is due to the fact that digital marketing is the most inexpensive and measurable means for expanding a customer base and increasing sales. It is also at the forefront of improving customer experience because it provides a highly customizable and targeted touch point. At a time where consumers have exceptionally high expectations and one missed step can send them right to the competition, digital marketing is more important than ever.
However, to make digital marketing as strategic as possible, you must accurately define and profile your audience to leverage its targeting capabilities to the greatest advantage. This requires effective, data-driven segmentation that makes the most of all available customer and prospect information, including the "traditionally hard-to-access" customer data housed in the long-trusted mainframe. Because it has been the "keeper" of data for so long, the mainframe is likely to offer the best snapshot into target audiences to create the greatest potential engagement.
Here are a few reasons data-driven segmentation is significant, and the factors significant to its success.
It's About Actionable Data
Gone are the days when targeting your marketing campaigns by age, sex, zip code and household income can be considered sufficient, or successful. To compete in today's digitally driven world, businesses—regardless of industry—must achieve a 360 degree view of their customers. This is made possible only by integrating data across all platforms and from all available sources to realize true data-driven segmentation.
Data-driven segmentation relies on the ability to create, and identify, actionable data—data that demonstrates what a customer/prospect is worth to a company, how often they interact with the brand, purchasing habits and preferences, what they currently own and, most importantly, what they are yet to own. Organizations armed with this information can more acutely drive the message and have an exponential effect on marketing efforts.
It Relies on an Omni-Channel Presence
According to the "Rightnow Customer Experience Impact Report," 89 percent of customers have stopped doing business with a company after one poor experience. This means that once companies have the right data, they must then use it to exceed customer expectations when they interact with the brand. This is where omni-channel marketing plays an integral role. Customers demand a seamless marketing experience regardless of the tool they use—be it a smartphone, tablet, notebook or desktop. And to take that a step further, they expect consistency from online to offline communications, including social media channels, websites, text-based communications, direct mail and even a brand's call center.
However, achieving such consistency can be challenging for organizations. In a recent CMO Club and Visual IQ report, 85 percent of CMOs said their efforts at implementing an omnichannel marketing strategy are challenged by a lack of access to data and inadequate tools/technology. By embracing data-driven segmentation to uncover actionable customer data, companies can then be armed with the information needed to create a marketing experience tailored to each customer, whether in the B-to-B or B-to-C arena. In addition, companies can more effectively measure marketing success and determine ROI. This is critical considering that the same report revealed that 82 percent of CMOs believe the inability to measure cross-channel performance is a major obstacle to implementing effective omnichannel marketing in the first place.
It Positively Impacts Conversion
Conversion rates are a key measurement of cross-channel performance, and we've known for years that segmentation greatly impacts conversion success. According to an old Jupiter Research report (2006), customer segmentation conversion rates (whether via direct mail or email) improved 355 percent, leading to increased revenues of up to 781 percent, when segmented based on customer data such as customer spend, brand interaction, and customer life cycle management. Yet a majority of marketers still do no customer segmentation at all, simply relying on the "one size fits all" mass email approach, which most savvy consumers are likely to delete before reading. In the end, that lack of targeted segmentation not only creates lost sales, it may actually be damaging to the brand.
Data Unification Contributes to Segmentation
Although data is key, many organizations still dismiss a large majority of their data residing on the mainframe. This leaves a valuable pool of what is often the most robust information untapped.
For many enterprises today, the information system that contains transaction history and details mat reside on platforms like the IBM System z mainframe. In addition, the Product Information System (PIM), which houses valuable pricing data and product descriptions, can also reside on the mainframe or on another distributed system platform, such as Oracle or SAP.
An effective data unification strategy makes it easier to unify large volumes of disparate data into a single, consistent data layer. By leveraging today's data unification solutions, companies can:
- Economically connect mainframe data to an automated marketing system, lending to new capabilities for configuration and training
- More accurately segment, target and track customer purchases and interactions using measureable business performance indicators and improved ROI measures
- Integrate data from disparate corporate systems on the distributed network and combine it into one web-based service for a live, real-time connection to automated marketing systems
Data Unification Checklist for Optimal Segmentation
- Review Your Business Goals: Conduct a complete inventory of programs and data elements.
- Gear up for a Simple Rollout: Select technologies that can be easily configured, implemented and managed, as well as those that can be installed quickly and with minimal IT staff involvement.
- Thoroughly Map Data: Pick tools that are simple to use but powerful enough to get the job done. Mapping the data accurately is essential to keeping the project on track with the end goals in mind.
- Leverage Unification to Achieve Complete Data Transfer: Enable access to the necessary data, and be ready to transfer large amounts of data from one place to another.
- Plan for Contingency Troubleshooting: Offer options for systems administrators and data administrators to manage and fix errors.
- Take in the Bigger Picture: Reuse and grow data unification across the enterprise as business needs and objectives evolve.
Personalized Marketing - The Next Frontier
As personalized marketing based on customer habits, spend and overall experience are becoming the driving force behind digital marketing activities, CMOs must look to next-generation solutions to ensure that customer communications are targeted, accurate, and provide an excellent customer experience—regardless of channel. Customer loyalty and business revenue depend on it.
Investing in data unification solutions to achieve data-driven segmentation and a superior customer experience, regardless of the device used to access information, is the next step toward building a better marketing engine and achieving the ROI for which every CMO ultimately aims.