Essentially, a unit of language runs the greatest technological invention of our time. Via search engines, customers use words to find and interact with your company. Understanding what your Key Performance Indicators (KPI) are or might need to be can’t be over emphasized. For businesses that already have an online presence, this is an essential first step in determining what’s working and what isn’t.
Engaging Customers on Their Terms
Most experienced online marketers could probably write the curricula at their local universities for classes related to various strategies and tactics for online marketing. However, it seems that many online marketers tend to ignore the valuable lessons that database and direct marketers have learned over many years of practicing their craft. These traditional marketers know that marketing is, at its very core, about connecting with prospects and customers in a meaningful way — on the customer’s terms. The online marketer’s challenge is to make sense of the vast quantity of information available — a bounty of which traditional off-line marketers could only dream — in order to allow businesses to make connections and build relationships that benefit not only their organizations, but also their visitors and customers. This guide will help you identify your key segments and, more importantly, provide you with the tools and knowledge to better manage those segments.
So, how do you effectively develop relationships with the thousands of individuals who come to your site? The truth is, while one-to-one marketing is a worthy goal, in many cases it just isn’t practical. Just as the catalog or direct marketer looks at cluster codes and lifestyle overlays, the online marketer needs to create identifiable groups or segments that are significant as well as manageable. As an online marketer, you can then develop the marketing strategies and tactics that will strengthen your relationships with customers and keep them interested in what you have to offer.
Today’s customers expect — no, they demand — relevancy. If what you’re trying to communicate doesn’t connect with them and their issues in a split second, you’ve lost them. Knowing who your customers are and what they need is a vital requirement for thriving in today’s competitive online world. Anticipating what your customers want and providing them what they value — at the right time, in the right place, and in an attractive format — is what is needed to win.
What distinguishes online marketing from various forms of database marketing is the incredible wealth of data available and the velocity at which everything moves. Consequently, businesses that are able to successfully measure, segment, and digest thousands or even millions of customer transactions in a fast and efficient way will realize a significant competitive advantage. The proper use of customer information and segments will benefit customers, too. Customers should perceive the information and offers they receive from you as a personal benefit of having a relationship with your company.
How do you touch a customer’s life through segmentation and a database? There are many ways, some of them so simple that we may overlook them. For example, when I visit netflix.com, they greet me by name and, more importantly, provide me with recommendations based on my previous selections and the scores I have given to movies. Personalization is nice, but recommendations are valuable. Netflix is able to make these recommendations because of the data they have collected about me over time and through tracking my behavior.
Not too long ago, I was shopping for light fixtures online. I even put an item or two in my shopping cart, but decided to leave the site before placing the order. When I revisited the site a few days later, I was offered a discount on lighting fixtures and I was provided additional information on a new line of lighting fixtures that the store was now carrying. This was an unexpected benefit and made my shopping experience easier.
Finally, the other day I received an e-mail from an online women’s clothing store. It was a brief e-mail from the department manager reminding me of my wife’s upcoming birthday, and it contained an offer to gift-wrap and send a dress by one of her favorite designers, in her favorite color and her size, in time for her birthday. I snatched up the offer. This business is providing a valuable service for their customers — and I’ll bet it’s a very profitable one, too. It made me glad to be in their database. And it was all made possible through customer intelligence and smart segmentation. When done well, segmentation and database marketing will make your customers feel content about having a relationship with you.
As online marketers, we often think of optimizing our marketing investment simply in terms of yielding the highest results (sales, orders, or some other success metric) from the lowest common denominator — i.e., everyone on the planet — thus gaining the biggest possible returns. Over the last few years, we’ve pushed every single ad, message, promotion, and new site design we can think of to the entire world, and we treat every person as though they are the same person. For example, how often do we say, in meetings or to ourselves, “I found a new control! This new promotion / copy / call-to-action / price / etc. beat the old control by some statistically significant percentage — thus, our overall sales should increase proportionately!” Then we proceed to “roll it out” to the entire world.
Let’s stop and think about this for a moment. What would happen if we could find the promotion, copy, call-to-action, or price that was relevant and appropriate for every single customer or visitor? Wow — now, that would be a significant breakthrough! The right message to the right person, at the right time, in the right place — true one-to-one marketing! Right — good luck. But we may not be too far off. In reality, a combination of behavioral, psychographic, and demographic targeting may accomplish this.
What if we were able to test all of our available marketing variables across several key segments? Do we believe the yield would be greater than simply optimizing to the lowest common denominator of everyone on the planet who hits our site? Many online marketers already do this without realizing it — through online media or keyword buying.
Let’s say that your marketing guidelines state that you can spend a specific amount per order, per lead, per customer, etc., and then you proceed to test every online display placement or keyword that meets those criteria in a statistically significant (or least directionally significant) quantity. All of the placements or keywords that achieve your metric are kept and all those that don’t are turned off. Granted, this example is a gross oversimplification of our efforts; promotions, copy, products, pricing, and site design all affect the ability of a particular keyword or placement to achieve the metrics, and ideally, many of these variables are tested exhaustively before promising placements are abandoned and simply “shut off” because they don’t meet the criteria.
But this isn’t the point. Simply by shutting off placements or keywords, you are, in essence, segmenting your efforts for one of two reasons (or a combination thereof): 1) the placement is too expensive to work, or 2) the audience or audience segments are not responding, and thus do not fit the particular marketing variables that were promoted. If it is working, that means there was at least a small percentage of visitors who did respond favorably to the placements or keywords, and thus a de facto segment is born — sometimes without us even being aware of it.