Six Steps to Data-Driven Demand Creation
By Sheri Taylor Gilchrist
Today's focus on accountable marketing is forcing chief marketing officers and their marketing teams to re-learn an old lesson: Creating sustained demand takes more than great creative and a list of addresses - you have to know your customers and what motivates them to buy from you.
Developing that kind of knowledge, and using it effectively, means putting accurate, up-to-date customer data at the core of every demand-creation program, and every demand-creation strategy.
Yet in spite of the growing trend toward collecting customer information, many marketers still do not fully leverage their "hidden jewel" -- their customer data. Their companies warehouse tremendous stockpiles of information, but very often they either fail to know what they have, or they fail to know what the data can tell them.
In that sort of information vacuum, how can demand-creation programs, especially those driven by customer data, succeed? In short, they can't, but there are ways to avoid this problem in any data-centric organization. The following tips shed light on how you can better yse customer data to build more effective strategies for demand-creation efforts.
Step 1: Uncover the Hidden Jewel
Think of your customer data as an asset. This includes all the data you have that tells you who your customers are and how they behave. This may include sales transactions, customer service contacts, channel preference data, service records, demographics, external prospect lists, and more.
Uncovering the hidden jewel means examining all places where you touch or communicate with your customers to assess what information you have, and what you might need to collect. Then, gather, clean and manage that information in a central repository where people across your enterprise can see it, use it, and contribute to its value.
The examination process also should uncover everything your currently know about your customers, and point to future data needs - valuable information that will help you begin to build a data-focused strategy for demand creation.
Step 2: Build A Data-Driven Strategy
Once you've taken the first steps toward deeper customer knowledge, it's time to build a demand-creation strategy based on that information.
This is where so many marketers get into trouble, because they solely use the limited amount of data that emerges from their initial review to build long-term strategies. To avoid a misstep, remember the adage that says no plan ever survives initial contact with reality.
In other words, start small, but don't lose sight of the importance of ongoing analysis and data gained from new sources. After all, data-driven marketing is a continuous process of testing new ideas, and adjusting the variables that can affect response and improve return on investment. At this stage, it's too early to even attempt a comprehensive strategy, since marketers rarely if ever have a complete picture of customers based on the data discovery.
An initial data review should, however, help set a few benchmarks for a successful data-driven strategy - the objectives for demand-creation and sales. It should also improve an understanding of customers, so your marketing team can begin to build profiles and segment them into meaningful groups.
Next comes market research and modeling. Using the initial analysis and segmentation as a guide, target your research to discover what drives customer sales, and perhaps the sales of the competition. Then, build the models that empower long-term strategic thinking by combining market research with ongoing data analysis.
Modeling is possibly the most critical phase in the strategy-building process - accurate models show a picture of customers that predicts their behavior. Models help mark the point where data can truly move to the core of strategic thinking. They also help to figure out what additional information an enterprise may need, and how to collect it.
With models in place, look for ways to enhance or to add missing customer data to improve analysis. For example, gathering promotion history, customer economic indicators or even promotional surveys may help your understand your customers more deeply. It will also test the accuracy of models, and help to refine them.
The final piece of the strategy-building step is . . . actually, there is no final step. If the process is not in a continual state of evolution, then it will quickly become extinct. So you must constantly build and refine your models, gauge their performance against reality, enhance data with new information and research, and incorporate all of it into strategy.
Step 3: Feed Demand Creation
Using the insight you've learned from your customer data, you now can execute strategy for demand creation. How an enterprise accomplishes this fete depends entirely on the needs of the business and the expectations of its customers, but here are four basic demand-creation tactics to consider (these examples assume b-to-c sales, but many could be adapted to b-to-b marketing as well):
1. Location-based Event Marketing: grand openings, anniversary sales, clearance sales, seasonal/holiday celebrations.
2. Personal Event Marketing: customer birthday, new mover, life stages, post-buy anniversary, major purchase anniversary.
3. Proactive Touch Points: customer appreciation day, private sale, customer survey, customer reactivation, referral incentive.
4. Reactive Touch Points: thank you (first or major purchase), customer service follow-up, thank you for visiting (location or Web site), thank you for referral.
Step 4: Capitalize on the Value
Marketing alone does not sustain demand - to keep them coming back, customers must enjoy a consistent, positive experience every time they engage with an organization. That means marketers have to deliver consistent value through the storefront, service desk, Web site, call center, catalog, etc.
Delivering that level of consistency means marketing or IT [information technology] departments cannot hide the keys to the customer data vault. For example, consider the value that deeper customer knowledge can deliver in pricing, operations and real estate applications, and you can start to realize the benefits of a scalable, flexible data system deployed across an enterprise.
There are customer relationship management solutions designed to fit just about any budget. Prior to any investment, remember to get input from the people who will use the solution before you start to build or expand on it. Participation supports buy-in at every level, which makes a transition much easier to manage.
Step 5: Maintain Data 'Strength'
Strong data are clean, accurate and as detailed as a business needs it to be. Thus, for a data-driven strategy for demand creation to succeed, there must be a data quality component in place, and measures to ensure ongoing data management.
To avoid falling short of program goals, remember these eight keys to strengthen data:
1. Acquisition: Look at all customer touch points and exploit every opportunity to collect relevant data. Don't ignore external lists.
2. Quality: Clean, validate and enhance customer data rigorously to ensure they are accurate, and that subsequent messages are sent timely and relevant after an update.
3. Management: Monitor the integrity of data channels to ensure you have the data you need, in a form you can use, and in a sensible timeframe. Are systems integrated?
4. Access: Enable data access across the enterprise to broaden institutional knowledge of customers, and to tap that knowledge. Make systems integrated!
5. Analytics: Review and analyze customer data constantly to gain insight into customers and their relationship with your business, which will empower more efficient marketing.
6. Programs: Develop marketing programs that both use and gather data to build better client relationships and deliver measurable ROI.
7. Maintenance: Constantly refresh and protect data to deliver consistent value to customers and your organization.
8. Enterprise: When building or expanding data management systems, whether large or small, get participation from across the enterprise, and buy-in at every level.
Step 6: Get it Right
Demand creation and demand management usually are among the first areas that suffer when marketing operates in an information vacuum. Here are two examples of companies that discovered this painful truth the hard way, and then did something about it.
The first is a large software company that recently discovered a black hole in its demand-generation pipeline: It was responding to less than 4 percent of its more than 50,00 business-to-business leads every month, and the average response time from sales was nearly six weeks.
The second is a national retailer. It realized its customer database was little more than an inventory control system that provided practically no usable insight into customer behavior.
Marketers in both companies faced a common problem: Data was a byproduct of the corporate demand-generation strategy, not the engine driving it forward. As a result, neither company was making good use of its customer data at either tactical or strategic levels, and both were suffering from weakening demand.
What happened next? Both companies adopted a customer-centric approach to demand creation and management, and placed customer data at the core of their demand-creation strategies. Today, the software company is accurately routing virtually every b-to-b lead within hours of receipt for swift response and improved customer satisfaction. The retailer is leveraging a new, far more robust customer database that enables on-the-fly marketing and guides both strategic and tactical thinking across the enterprise.
Today's demand generation programs must have an accountable, data-driven strategy that leverages a full 360-degree view of a customer across an organization. By having those points of data collection in place, in a manner that allows an enterprise to integrate and build this customer view, to perform analysis on it, and to engage in dialogue planning and execution that deliver messages to customers in meaningful ways, a marketer will have all the building blocks in place for a successful program.
Sheri Taylor Gilchrist is senior vice president, client services, Harte-Hanks. Gilchrist has more than 20 years experience in direct and integrated marketing, and has worked across many verticals including retail, financial services, automotive, telecom and IT. Harte-Hanks is a worldwide provider of direct and targeted marketing solutions for consumer and business-to-business marketing organizations. She can be reached at (978) 436-2959, or by e-mail at Sheri_Gilchrist@harte-hanks.com.