Econsultancy has conducted research in partnership with Google looking at how enterprise brands are responding to the challenge of measurement in a mobile, multichannel and multidevice world.
To gain a perspective on where marketing is today and where it’s headed, respondents have been divided into two groups (leaders vs. the mainstream) based on performance. Leading companies significantly exceeded their top 2016 business goal and comprise roughly one-fourth of the sample. The remaining 75% are designated the mainstream for comparison.
Throughout the research, the differences between these groups are significant and educational; leaders are consistently further along in building organizations that are data-driven, focused on larger business goals and committed to customer experience as a path to growth.
#1: First party data is the key to customers’ hearts (and to modern marketing)
Consumers have enormous choice and little patience, and both trends will only accelerate as artificial intelligence is woven into supply chains and the fabric of customer experience.
A model that’s built on experience depends on first-party customer data. It’s the only way of knowing what an individual wants today and building a picture of who they are over time. That picture is what makes it possible to predict the lifetime value of that customer and to segment them effectively.
First party data unlocks the preferences necessary for excellent service, as well as enabling more advanced merchandising based on the customer’s profile. For example, is the individual a loyal or VIP customer? These groups are responsible for an outsized ROI and a significantly higher customer lifetime value, and should be treated differently than an itinerant bargain seeker.
Leading marketers are already sold; they are 58% more likely than the mainstream to strongly agree that first-party data is a strategic asset that informs their decision-making (57% vs. 36%)
First-party data provides the opportunity for a more direct relationship with customers and the ability to personalize experiences and that leads to an improvement on the bottom line. Of the organizations that invest in personalized consumers experiences, 41% strongly agree that personalization significantly contributes to increased profitability.
#2 Measure for business outcomes
Investor reports mention revenues and profit as a matter of course, but they seldom feature media metrics such as Cost Per Acquisition or Return on Advertising Spend.
The bottom line should always be the goal in measurement, but arcane metrics, gaps in data and siloed technology keep many companies from tying marketing investments with the KPIs that matter to the larger business.
At the same time, marketers can’t (and shouldn’t) trade their metrics for a new set that can’t be collected reliably or doesn’t provide efficient feedback. Business metrics can lag, particularly where purchase cycles are long (e.g. automotive) or where consumers typically need to complete their purchase through a partner (e.g. CPG).
The answer for many organizations is to tie media metrics with financial outcomes using more accessible measures that strongly correlate with outcomes, and to effectively use estimates.
Leaders do not get distracted by small levels of ambiguity, nor the lag in business metrics. Instead, 73% of leading marketers are comfortable using proxies to tie media metrics with business outcomes. They are 35% more likely to do so than mainstream marketers.
This allows the leaders to move more quickly than the alternatives. When asked for the reasons why they use proxies/estimates, seven in ten said they do so to make faster decisions.
Once the connections between proxies and financial outcomes are well established, these leaders also speak about marketing success in a language that finance and the board understands.
#3 Play the long game
Experimentation is nothing new to marketers, and indeed the majority are engaging in it. Econsultancy’s Driving Growth with Measurement in a Mobile World, also conducted in partnership with Google, showed that over 80% of enterprise level marketers were engaging in some level of testing.
The majority of these organizations focus their efforts on optimization – iterative improvements of campaign variables or owned media sites and applications.
These are useful, but optimization is not exploration and in times when markets and consumers are changing quickly, that’s a critical difference. There are simply new opportunities to deliver value to consumers and value to the bottom line, that unless tested, will not be discovered or left for a competitor to find.
This means switching some of the focus from short term confirmation to long term inquiry.
Leading marketers are starting to find a balance. 56% say that their organizations dedicate time and budget to strategic experimentation.
Marketers who want to join the leaders need to expand their thinking from hitting this quarter’s targets to proving that experiences pay off in the months and years to come.
#3.5 The prime example is mobile CX
Perhaps the clearest example of where companies can benefit tomorrow by experimenting today is in the mobile customer experience. Mobile has fundamentally affected how consumers interact with brands, and marketing is only starting to decipher the implications.
Mobile behavior is in the process of redefining the customer experience, regardless of sector. But most sales are still offline and via the desktop, so at many companies mobile CX is simply one of many competing priorities.
Leaders have a sense of urgency. They are more than three times as likely than the mainstream to be significantly increasing their investment in mobile customer experience. Just as important, an increase in profitability is the most commonly cited reason to increase investment.
The big picture – from transaction to customer
Step back from the findings detailed in this series, and you see a central line; leading companies are fundamentally shifting their focus from the short-term goals to the long-term value of a customer.
The speed of commoditization has grown steadily in the digital era and will increase further as manufacturing and processes are automated and accelerated by machine learning. This applies equally to digitally-enabled services as to physical products.
These pressures move value from the point-of-sale transaction to the relationship, with customer loyalty the only variable with long-term implications on what brands can charge.
To commit to this model where growth is driven by customer experience is to invest in return visits, higher basket values and wider margins.