We’re over the holiday frenzy. Now contributor Jordan Elkind explains how retail marketers can start the new year on the right foot.
The end of the year often feels like a blur.
There’s the frantic November and December push to get campaigns prepped and out the door. Then, when it’s time to celebrate, people are out of the office with friends and family. Now it’s January and you may wonder, “What’s the plan now?”
A solid plan for starting the year is especially important as we’re just coming off a robust holiday season. The U.S. e-commerce industry as a whole grew 5.5% according to the Custora Pulse, and the best retailers grew twice as much. (Full disclosure: Custora is my employer.)
Read on for three keys to becoming one of these retail stars by starting strong in 2015.
1. Get Your Data In Order
The strongest teams understand the importance of being a data-driven organization. From a marketing standpoint, this means understanding which marketing channels are driving positive return on investment — and allocating budget accordingly.
Becca Freeman, Senior Manager, Digital Marketing at fashion jewelry retailer BaubleBar (client), explains: “As a startup, we work with a startup budget, and we don’t spend a dollar that we can’t back up from an investment perspective.”
BaubleBar uses data throughout its decision making process, but in order to operate this way, the team needs to have the right, accurate information easily accessible and the ability to quickly find insights.
Foundations For 2015:
If your customer database is in disarray, start small with basic data cleanup tasks (like standardizing segment names, fixing dirty reports, etc.) to make your information easier to work with.
If you feel like your data is already in good shape, keep doing all you can to break down silos between information so that you may build a single view of the customer. That could mean combining email data with purchase data, getting online and offline purchase data in one place, or seeing customer interaction across all marketing channels.
Different data streams working in concert gives teams a more accurate picture of their customers, and lets them use that information to power marketing actions.
2. Move Away From “Batch & Blast”
Marketers aspire to send customers “the right message at the right time,” but it’s impossible to do that by sending the same email to everyone on your list at the same time. The era of “batch and blast” email is coming to a close, and personalization is up next.
Foundations For 2015:
To achieve basic marketing personalization, you can start with simple segmentation based on purchase history, behavioral data, or demographic info.
Those segments can then be passed into email tools to send customers messages that they’re interested in — emails about socks to sock-lovers, messages about belts and earrings to accessory fiends.
Keep in mind though, that not all segmentation dimensions were created equal — our research discovered that variables like past purchases, acquisition channel, device type and geography tend to be the most influential in predicting a customer’s future behavior.
Marketing leaders are also going a step further with predictive persona segmentation, which uses customer data to group customers together based on a number of variables, all at once, and then predict what products those groups are interested in.
Shoe retailer Sole Society (client) tried this method (in tandem with conversion rate prediction) to send new customers offers and product recommendations based on what they were likely to want in the future and saw nearly twice as many of their email list members convert into paying customers.
3. Optimize Acquisition And Retention For The Right Metrics
The start of the year is a great time to take a step back: Who are our best customers, and how do we find more of them? What do we do when these best customers show signs of leaving our store?
For the start of the year, it can be helpful to take a look at what your company is doing to find better customers, and what your team does when it looks like a good customer is no longer shopping with your store.
Foundations For 2015:
When it comes to acquisition, basic analysis can reveal which customers spend the most at your store, and which acquisition channels bring in these high value shoppers.
Bonobos (client) takes a more long-term approach, looking at this type of acquisition channel breakdown from a predictive Customer Lifetime Value (CLV) perspective. They look at the predicted long term value of their relationship with customers from each channel, rather than just considering their first purchase. As a result, they’re able to spend their budget focused on long-term value over short-term growth.
Similar improvements can be had in the area of retention. You may already be running “win-back” efforts by emailing people who haven’t made a purchase in a predefined amount of time, but if not, that’s a great place to start. Our client Nasty Gal is a little more advanced, using predictive churn detection algorithms to personalize the interval at which a customer is considered “at risk,” which lets them send emails at different times for different people.
We’ve just exited the busiest online shopping season ever and it’s important to carry that momentum into 2015. Set your team up for year-long success by investing in structural improvements to your marketing setup and you’ll reap gains into the future