Earlier this year, Econsultancy published a report in association with IBM called The Secrets of Elite Analytics Practices.
We sought to discover just how much analytics was contributing to business performance and where in particular it was making the biggest impact.
Today we’re expanding on those insights with commentary from top marketers on the power of measurement.
In this, the first of two long reads, we explore how analytics is revealing opportunities in a complex customer journey and what tactics are winning out.
We’ll also be exploring its limitations and hearing how these senior marketers plan to overcome this challenge.
Building brand responsiveness into the customer journey
Channels and platforms are multiplying and marketers are struggling to describe that journey, much less follow it. The terms customer journey and purchase funnel imply a linear progression, the reality is that it’s anything but.
In an effort to reflect today’s “always on, everything everywhere” customer behavior, various alternatives have been proposed including a customer journey circle, a loop and even a fish.
What is clear from our research is that the majority of marketers believe understanding this customer journey is a work in progress. Less than a third of respondents to the IBM/Econsultancy August 2016 survey stated that they had a thorough, up-to-date view of the customer journey.
Having plunged headlong into the digital universe, marketers are finding that channels clamor for acknowledgement but their teams and tools aren’t up to the attribution task. It can often feel like the customer is moving too fast for them.
Thoryn Stephens, head of data at American Apparel states: “I’m a strong advocate of multi-touch attribution, but it’s really hard for businesses to go from a first and last touch culture to MTA. It doesn’t happen over night.”
And therein lies the problem. Stephens adds: “As a data scientist and technologist, I’m of the firm belief you cannot manage what you can’t measure.”
Jim Sprigg, Head of CRM at IHG hotels, is one of the lucky ones: “Because we know who the customer is on every channel, we’re really focused on understanding the impact of messages and content.
“We’ve figured out a way to test across all channels and most companies haven’t figured that out.”
Approaching the journey analysis task
So it’s clear that until brands have an understanding of how their customers behave across the various touch points, it’s going to be difficult for them to serve them effectively.
It sounds like marketers have a gargantuan task ahead of them. The question now should be “where to begin?”
In this case, our research revealed what components of customer journey analysis top performing companies excelled at. It was salutary that the lower performing companies naturally engaged with these components far less.
The top two were understanding the source of the customer – marketing channel or referral, etc. – and discovering their preferences of product, contact method, content and so on.
For companies struggling to embed customer journey analysis, it’s a question of gathering in information wherever it is to be found but prioritizing its use to manage the scale of the task.
IHG’s Sprigg outlines his process: “We have to be deliberate about it and take whatever information is available. We use cunsumer insights from primary research, the types, needs and perceptions of customers.
“Then we can bring in performance analysis and make inferences from that.”
Prioritizing investment in the top of the funnel
One of the problems is that understanding customer preferences and catering to them may be an essential part of starting that brand relationship with them, but it is far removed from the point of conversion.
Marketers are struggling to link understanding the customer journey directly to ROI which, in view of revenue-focused business goals, de-prioritizes it.
“Most of the conversations around return on investment are in the digital channel and justifying expenditure [diverting from TV],” explains Rex Jackson, VP of marketing and sales at Legoland Florida Resort.
“We have awareness tactics and conversion strategies. The latter is closely related to ROI but the former is more difficult to tie in as it’s further up the funnel.”
Jackson’s answer to this challenge is to break their KPIs up into awareness and conversion and having different ROI measures attached to each, based on where the customer is in their purchase journey.
Marketers need to be more intelligent about understanding the contribution customer journey analysis makes to the end goal.
Our research revealed that brands we would consider “elites” in the analytics space said that understanding where and when problems arise were the two most powerful results of their analytics capability.
This was far above (63% vs. 27%) the much vaunted ‘understanding customer behavior’.
Interestingly, the situation was reversed when it came to laggard companies who valued customer behavior and gleaning customer knowledge far above understanding where problems arose (40%/47% vs. 7%).
“I always start with the challenge – where can you drive value and from there, align the solution,” Stephens summarizes.
Bring information and strategic need together
“Funnel analysis and where it breaks down is extremely important, however even more important is talking to your customer and understanding their needs or what’s important to them,” says Brian Streich, former CMO at StubHub and now head of growth at Vacatia.
For marketers struggling to embed customer journey analytics into the organization, these findings would suggest that an excellent place to start is to begin with understanding where customers are coming from, their preferences and where the pain points in the experience are.
We have already stated in the report that friction is the most important force in the physics of online commerce, but perhaps even more important for brands is to take the time not just to fix but explore where the friction is happening.
To borrow from former Secretary of Defense Rumsfeld, there are known unknowns and unknown unknowns. Some of your most damaging friction points may still be invisible.
“At Vacatia, one of our most popular features is FlexPay. We offer guests two ways to pay over time. When we asked our guest care team for feedback on what it was they thought got guests over the hump to book, they all said FlexPay.”
“But when we looked at our experience, we didn’t really talk about it anywhere. Often guests only found out about it because they called us to ask about something else. This insight led us to make that feature more prominent through the site. Immediately, our conversion and use of FlexPay went up.”
Sometimes friction is clearly reduced by clearly communicating to customers what it is you already have but don’t fully understand the importance of.”
Staying in context
The problem with advocating laser focus on the consumer is that while you’re busy optimizing experiences at an individual level, changes also have to be relevant at an audience level.
IHG’s Sprigg conducts optimizations at control group level but these are not isolated events. His analytics and optimization process is a series of test and learn opportunities that are plugged in across the whole specturm from single channel and segment level to a company and audience-wide reach.
“We’re trying to define the solution we want to build with multiple layers of testing. We will have control groups that define what a customer sees across all channels over time but will also have a control focusing on a single channel.
“We score long-term content, we score short-term content. We then come up with a way to combine these scores and map out what the experience will look like once there is a framework in place. It’s a multi-layer optimization.”
For Lego Resort’s Jackson, this means taking a layer of insight deep enough to launch a range of campaigns and optimize down to audience preferences, after the fact: “The single biggest change I’ve seen is that optimization allows me to spend less time tweaking and optimizing creative on the front end, before customer exposure.
“Instead, it allows us to place a variety of creatives into the market and then allow optimizations to happen in real time as we discover which resonates more.”
Sprigg suggests that failing to build insights out to an audience level is down to approaching the task from the wrong direction.
The figures bear out his argument. Our research showed that companies with a powerful capability to translate individual issues to an audience level (the top 21% percent of the sample) had average conversion rates 136% higher than those with less sophisticated capabilities.
Managing the customer journey for growth
Customer journey analytics is clearly the bedrock for brands’ future growth but it continues to pose challenges for marketers.
There may be no shortage of data flowing into the organization but maintaining consistency across channels and tying the information to specific customers is a task many have yet to master. But with contextual personalization and people-based media both dominating the conversation, it’s a something brands will have to rise to.
In the second of our long reads on embedding customer analytics into the company, we will be looking at some of the organizational and infrastructural changes marketers are having to make to adapt both culturally and technologically to the demands of new data.
This post was co-written by Morag Cuddeford-Jones.