Columnist Mike Sands discusses the ways in which CRM marketers can team with digital advertisers to help them adapt to a cross-channel world and increase retention.
Facebook first introduced the concept of “people-based marketing” in 2014, and in less than two years, it’s gone from buzzword to business driver.
In the last quarter of 2015, Facebook reported $5.64 billion in advertising revenue — driven in large part by the growing popularity of its Custom Audiences offering that helps marketers target ads at real people, rather than cookies or devices.
Amid the excitement around Custom Audiences, it’s easy to forget that a people-based approach isn’t actually that new. The original people-based marketers are those in charge of engaging and retaining customers and turning them into brand loyalists. These customer retention marketers pioneered strategies to reach real people through tools like direct mail, email and rewards programs.
Retention and loyalty programs are fueled by a brand’s first-party data and the CRM (customer relationship management) systems used to store rich customer-level information such as demographics, preferences, spending patterns, loyalty program status, lifetime value and more.
These are critical elements of the marketing strategy for good reason:
- It’s more profitable to keep existing customers than to acquire new ones. Repeat customers spend more than twice as much in months 24–30 of their relationships than they do in the first six months, and boosting client retention by just five percent can raise profits by up to 95 percent.
- Three in four consumers say that positive customer experiences cause them to spend more money with a brand.
- 70 percent of brand-side digital marketers and e-commerce professionals agree that it is cheaper to retain than acquire a customer.
Yet retention marketers are struggling to meet consumers’ rising expectations in today’s always-on, multi-channel world.
For example, email is one of the retention marketer’s most tried-and-true tools. Email is certainly still effective — with 58 percent of consumers saying email is their preferred way to be contacted by a brand, according to an Adobe survey.
But flooded with 1.47 billion annual emails, consumers are experiencing email overload. Only about one in five emails is opened on average, and more than a third of consumers say they want fewer repetitive emails from brands.
Complicating the scenario is the fact that marketing organizations, platforms and channels are so fragmented, but consumers are demanding consistent, seamless brand experiences as they move between devices and offline-online environments.
So what’s the retention marketer to do? The good news is that people-based marketing technology is giving them new toolkits and solutions for working across the marketing stack and for engaging and delighting customers on a 1:1 basis in more channels than ever before.
3 People-Based Strategies
Here’s a look at three people-based strategies that CRM marketers can pursue by partnering with their digital media team, upping their retention game:
1. Re-engaging lapsed customers — A people-based approach to digital advertising can help retention marketers reconnect with customers who haven’t interacted with the brand in a while.
By partnering with their media teams to upload CRM data, retention marketers can create segments of inactive customers and target them with display ads containing customized messages and offers designed to bring them back.
Email marketers don’t have to wait and hope for customers to open their emails — they can find customers on sites across the internet and engage them with personalized messages.
2. Improving the digital ad experience — Just as valuable as getting the right message to the right customer at the right time is not targeting the wrong customer with the wrong ad at the wrong time.
Who hasn’t had the annoying experience of being followed around the web by display ads for items we’ve already bought? This is a loyalty killer and huge waste of ad spend — and it’s completely avoidable.
The customer who just bought running shoes from your brand — online or in a store — doesn’t want to keep seeing ads for those same running shoes wherever they go on the web.
By connecting point-of-sale or CRM data to digital media-buying in real time, retention marketers can ensure that retargeting is suppressed for customers who just made a purchase so they don’t keep seeing ads for items they no longer want to buy.
3. Deepen your cross-selling capabilities — When done right, upselling and cross-selling can build deeper relationships with customers — a retention marketer’s ultimate dream. A people-based approach lets marketers use their point-of-sale or CRM data to serve ads that are relevant to a customer’s recent behaviors.
That customer who just bought running shoes? Why not show him a digital ad for other running gear — like socks or pants — to go with his new shoes?
By working with the digital advertising team, the retention marketer can send him the right message to complement the purchase he’s just made, building loyalty between him and the brand while increasing marketing ROI (return on investment).
Retention marketers have invested billions of dollars in CRM systems that warehouse a treasure trove of customer data. Unfortunately, that data may be the marketing organization’s most underutilized asset.
People-based marketing technology and new CRM-targeting strategies, however, are helping marketers adapt to the cross-channel era. Technology is making it faster and easier to connect all this valuable offline data to the digital world, enabling them to interact with customers in the context of the relationship at each step of the journey.
Finally, they can reach across silos to boost customer engagement and build loyalty in ways that directly impact the bottom line.
Some opinions expressed in this article may be those of a guest author and not necessarily Marketing Land. Staff authors are listed here.
(Some images used under license from Shutterstock.com.)
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