3 Questions To Ask Before Any Martech Investment

In his book, “Thinking, Fast and Slow,” Nobel Prize winner, Danny Kahneman, describes the way we humans think as something of a battle between two discrete “systems.” System One is our instinctive, intuitive, gut-level, rapid-fire decision-making system. It was critical to our survival. System One asks: Is this stranger friendly? Or is he about to hit me over the head and steal my food?

But System One is not always reliable – and all too often, it leads us down a dubious path.

System Two is a slower, more deliberate system. It takes into account—and weighs—all the information at hand before moving forward. System Two says: He looks like he could be an enemy. But if I share my food with him, maybe I can make him an ally.

The challenge: System Two requires a lot of energy. And so, because our bodies and brains are programmed for efficiency (conserving energy however we can) System One is our go-to way of thinking. We literally can’t help it. And it works—for the most part. But not always.

Data used to be a System Two solution to most marketing problems. For one thing, we didn’t have nearly as much data as we do today. And we had few of the analytic tools available to manage.

But more importantly, marketing was about product features and benefits. It was about a brand’s positioning, or Unique Selling Proposition. Most of you know the well-known axiom: “If you build a better mousetrap, the world will beat a path to your door.”

The data—information about the folks you hoped would buy your mousetrap—was something of an afterthought. But times changed.

We came to realize that building a better mousetrap was no guarantee of success—that someone was sure to come along and build a competitive one faster, cheaper, with more features, free shipping and a money back guarantee. Hello, Amazon!

We learned that truly knowing who you are targeting, that speaking to them in a language they understand, about the things they care about, via the channels they prefer, at the moment they are ready to take action – well that’s the key to success.

Fast forward to 2017, and data (capturing it, manipulating it, studying it) has become the System One, de facto, solution to almost every marketing problem. We are literally awash in data.

Marketers have more data analytics tools available to them than they can possibly manage.

Marketing automation (totally dependent on a free flow of data, of course) promises to take the heavy lifting (System One!) out of marketing decision-making. And yet…

  • Few marketers report a significant improvement in the metrics against which they measure their marketing performance.
  • Few are seeing a real reduction in their new customer acquisition costs.
  • And even fewer are seeing an increase in the customer lifetime value.

Why is that?  How can that be?

Increased competition plays a part, of course. But it’s also because successful new customer acquisition—no matter how much data you have at your disposal—will always be a System Two endeavor. There are no quick fixes. There are no easy answers.

There must be a collaboration between smart marketers, merchants, and media managers, all working together with the data to identify critical patterns, glean actionable insights and to deploy it intelligently to overcome specific challenges.

That collaboration is the only way your organization can make data smart again.

Here’s an example of what I’m talking about: Multichannel retargeting is a hot new category garnering a great deal of attention across the marketing world. The System One approach to retargeting is that abandoned shopping carts are the Holy Grail. Yet a deep System Two analysis provides some interesting counterpoints. Namely that:

  1. An individual who views a product two or more times, in the same session, will outperform an abandoned shopping cart, where the product was viewed only once, by a factor of at least two times;
  2. An individual who views a product two or more times, in successive sessions, will outperform an abandoned shopping cart, where the product was viewed only once, by a factor of four or more; and
  3. A multivariate model that incorporates a number of web browsing behavioral data attributes (i.e. time on site, level of engagement, return visits, etc.) will outperform any single attribute (including shopping cart abandonment) by up to 12 times!

The CMO of a major client of ours recently told our team, “Don’t bring me another data play. And I don’t want to hear about a new technology. I just want to know how you’re going to help me generate more sales.”

Well that’s the point, isn’t it? To sell something to someone. System Two to the rescue.

5 Reasons Why Direct Mail Will Never Die

As a career direct marketer, I’ve spent the last 20 years in an almost nonstop episode of my own private reality show, “Test and Learn.” Back in the day I tested hotline after hotline – it was the holy grail for reaching people who were direct mail responders. I also used radio, TV, and outbound telemarketing as ways to target prospects. With the rise of digital came many new methods for customer acquisition, and I tried them all. And obviously I did mix and match too – testing different sequences and channel mixes to try and pinpoint the golden goose that would lay the most productive prospect eggs.

Sitting here today after all the CPAs and ROIs have been calculated, I still believe that Direct Mail can rule the day. What’s uniquely powerful about direct mail is not only that it continues to drive large scale acquisition when used on its own. It’s that it also adds incrementality to every other channel that accompanies it as part of an omni-channel campaign mix.

What makes direct mail so powerful? I will share some of my theories in a moment, but first I think it’s also worth mentioning that millennials apparently tend to agree with my assessment. In fact, according to recent statistics from the Direct Marketing Association, millennials are more likely to engage with marketing messages they receive via direct mail than from any other channel. As you think about adding younger customers and increasing lifetime value, direct mail almost certainly must be part of your campaign mix. Here’s why:

It’s the last truly non-invasive channel

The promise of digital has been increased speed and efficiency with the hundreds of tasks we all perform in a given week. But digital is a push channel; one where users are asked to take actions, in their inbox, through links and buttons and banner ads, some of which “follow” the user as they navigate the web. Direct mail allows the consumer to choose if they want to participate or not – it’s a pull channel, by nature. And it allows the consumer to read and interact when and where they like to.

It’s a brick and mortar channel

As Amazon continues to grow and we conduct more and more of our shopping online, there remains merit to channels that allow for physical interaction between a consumer and a product. And in this case, a consumer and a message. Direct mail comes to your house and allows a truly 1:1 experience where you can hold, feel and see a piece in your hands. That immediately lends a personal feeling to direct mail that email, for instance, can’t compete with. And apparently, consumers like it. A study by Epsilon showed that 77 percent of consumers sort through their physical mail as soon as they get it. Even better, data from the U.S. Postal Service showed that 98 percent of people check their mail daily.

It’s more cost effective than you may realize  

Over the last 5 – 7 years cost has become more of a concern for direct mailers as postage and production continue to increase. This has caused many marketers to ask themselves why not just double down on digital – it’s cheaper, and you can reach many more people. And while that’s true on the face of it, when marketers focus solely on digital, their conversion rates and response rates are all substantially lower. In addition, direct mail typically drives higher order value and more incremental sales that you couldn’t have gotten digitally. Let’s do a little math using average response rates, to compare the effectiveness of email and direct mail.

Marketer A does an email campaign to a list of 100,00 names and gets a click through of 15% (15,000) and a 10% open rate (1500). Let’s optimistically say the 4% act on the offer – so now Marketer A has 60 sales. Now let’s say Marketer B ran the same campaign via direct mail – 100,000 pieces mailed, but 20% convert – and Marketer B has 400 sales. That’s literally 6 times the amount acquired.

It puts power back in the hands of the marketer – AND the buyer

Unlike digital, direct mail lends itself to providing multiple calls-to-action, and gives marketers the ability to hone in on the way or ways that prospects prefer to transact. Some consumers like to talk to a call center; others like to go online; and believe it or not, some still prefer to put a check in a return envelope. At the end of the day direct mail offers a win-win in that it lets marketers test into the best transaction method(s) for their prospects, plus it lets the buyer decide how they want to complete the sale.

It plays great with all your other channels

Despite my fervent belief in the power of direct mail, I am definitely not suggesting that any marketer give up on a multi-channel strategy. But it’s my assertion that direct mail should always be the one of your primary channels and work in conjunction with all of your acquisition efforts The Little Book of Bigger Returns found that when direct mail is used as part of an integrated campaign, it boosted ROI by 20%, and helped improve the lift of online campaigns by 62%. Direct mail can help prime the pump for online retail and serve as a physical reminder of a message that your prospect received in another channel.

The Bottom Line: It’s not going away anytime soon

I mentioned millennials earlier – and according to a study done by the USPS, 90% of them pick up their mail at their first opportunity, and they engage with it an average of 9.8 minutes. These numbers are higher than they are for Gen-Xers or Boomers. That means a whole new generation that sees the value of direct mail – and a lot of opportunity to innovate in the channel that continues to win.

Recency: Are You Retargeting At The Wrong Time?

Delivering the right message, to the right person, at the right moment is the gold standard that separates an effective remarketing campaign from an ineffective one. But what is the right time? The answer to that question is the key to uncovering all of the secrets of the universe. Okay, maybe not quite. But to answer it, we need to redefine recency and take a deeper look at the approach we take to timing in the context of today’s marketing challenges. Deciphering the natural behaviors of your customers and prospects will help you gain a better understanding of how you can leverage recency to time your remarketing campaigns in a way that will maximize your ROI. Here are two examples we found in our work with two major retailers.

Recency Improves Purchase Rate

A major office supply retailer was looking to net more B2B revenue by leveraging a direct mail campaign that retargeted existing customers who had visited the website within the last week. This retailer decided to send those visitors a relevant direct mail offer, instead of relying on traditional spray and pray retargeting ads. What they found was surprising. The direct mail campaign improved incremental sales AND the average ticket price for each sale made as a direct result of the mailing was actually higher. The result: Prospects who otherwise would not have bought anything, ended up making a purchase, and those who were going to buy anyway, ended up buying MORE. Not bad.

Recency & Abandoned Carts

Abandoned carts have always been the low-hanging fruit when it comes to remarketing. One popular online meal delivery service decided to study the viability of cart abandons as a productive audience for remarketing – and recency was an important part of it. By sending a direct mail offer to each prospect who abandoned a shopping cart within the last 24 hours, the retailer hoped to give them that one final push. However, they found that retargeting cart abandons within such a short time frame didn’t have much of an impact. Why? Because almost 85% of cart abandons that were going to convert anyway from that site came back and eventually made a purchase within 48 hours on their own, without any offers to give them that extra push. When that same online meal delivery service decided only to retarget the cart abandons that still had not converted after 48 hours, they realized a much greater percentage of returns that came as a direct result of the campaign – not to mention a tremendous cost advantage that can go a long way towards increasing their marketing ROI and, ultimately, bottom line profitability. The result: This finding helped highlight the right time to retarget these specific prospects – proving that timing matters, and testing is the only way to figure out when you can help a prospect cross the finish line.

The Findings: Recency Is Relative

In the end, both retailers were able to find their sweet spot when it came to the timing of their retargeting campaigns. But there’s another common thread here: It’s that recency is relative. In fact, it’s more like a sliding scale – there’s a continuum that will be specific to your visitors based on behavior, affinities and other factors. In today’s ever-changing, hit-a-moving-target world of marketing and retargeting, it’s not just what you’re saying and who you’re saying it too – it’s also when you’re saying it that really impact your bottom line. And without testing, finding that recency sweet spot could be elusive.

Marketing Prediction #1: 2018 Will Be The Year of New Customer Acquisition

She’s one of my partners. She runs our retail strategic consulting practice. And it’s one of our fastest-growing divisions. So, when she talks, I usually listen. Not long ago, over breakfast one morning, she told me she thought there was a pretty significant shift taking place in retail. I was all ears…

“Well,” she said, “For the last few years, retail has been focused almost primarily on getting the most they can from existing customers. Mining CRM data has been the Holy Grail. But it’s maxed out – and now, we’re starting to see a very definitive move back toward new customer acquisition.”

I hadn’t heard that before, so I did some investigation of my own.  And sure enough, she was on to something. Everybody I spoke with—including a couple of retailers, a financial service exec, two senior level non-profit directors and a B2B CMO said essentially the same thing: They thought they had gotten about as much productivity as was possible out of their CRM files. And that their focus in 2018 would be on new customer acquisition.

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Research backs that up: According to Target Marketing, marketers were planning to increase customer acquisition budgets by 42% in 2016.

And that trend continues. Gartner found that 37% of marketing budgets were allocated to new customer acquisition in 2017.

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So now, the question is: Where can you find productive sources of new customers?

Well, here’s a little surprise to start your new your off right: A lot of them are right under your nose. They are the anonymous visitors to your website.

That’s right. Every day, millions and millions of people visit retail websites—demonstrating a genuine intent-to-buy interest in specific brands and products—but coming and going without leaving a trace. For one thing, 96% are anonymous—and they don’t register. And for another, less than 1% have any intention whatsoever of making a purchase on their first visit.

Leaving 99% who are essentially raising their hands and saying, “I may not be quite ready to buy. But that doesn’t mean you should ignore me altogether. Talk to me. Please. I’m interested in you!”

Over the past few years, marketers have learned that display ad retargeting enables them to reconnect with interested website visitors. And while display advertising is OK for brand building and generating some level of awareness, it is notoriously weak at driving actual transactions.

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So how do you turn your anonymous website visitors – who have demonstrated an intent to buy – into new customers?

That’s where cutting-edge remarketing comes in.

New technologies like Remarketable enable you target high value new prospects by mapping previously unidentified website visitors to known postal, email, and IP addresses with strict adherence to privacy compliance standards.

But that’s not all. Remarketable also integrates a comprehensive universe of 3rd party data with your 1st party web browsing behavioral data to (1) identify the most productive and high-performing new customer segments; and (2) personalize your content in order to break through the noise in the marketplace and maximize campaign performance.

The 3rd party data deployed to both target and inform your campaigns includes:

  • CRM Data
  • Demographics (age, income, gender, martial status)
  • Psychographics (lifestyle, interests, political affiliation)
  • Affinity (propensity to donate, support of the arts, dog or cat lover, etc.)
  • Milestone (new homeowner, newly married, etc.)

What does that look like?

  • A B2B marketer driving 600,000 visitors to its site each day; identifying the 200,000 or so (on average) who turn out to already have an existing account with their complete purchase history; the 150,000 or so each day who are B2B customers with size and location of their company; and the balance of 250,000 or so who are B2C prospects with location and income data attributes.
  • One of the country’s leading home furnishing retailers; matching up their website visitors with new home owners, and recently applied for home renovation permits.
  • A national weight loss program; segregating by gender, so male visitors receive a promo from a former football Hall-of-Famer, and female visitors hear from a well-known country singer.

The bottom line is this: Remarketable enables marketers to identify their best new prospects, speak to them “in a language they understand,” about the things they care about, via the channels they prefer, at the moment they are most likely to take action.

And if that’s not a recipe for you to ensure that 2018 is a year of successful new customer acquisition, I don’t know what is.