WHITE PAPER EB6903 USING DATA-DRIVEN MARKETING TO CONNECT WITH TODAY S CONSUMERS EMBRACING THE NEW PARADIGM OF A HYPER-CONNECTED WORLD
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- Gwendolyn Anthony
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1 USING DATA-DRIVEN MARKETING TO CONNECT WITH TODAY S CONSUMERS EMBRACING THE NEW PARADIGM OF A HYPER-CONNECTED WORLD
2 TABLE OF CONTENTS 2 Executive Summary 2 Trends and Pain Points 3 Three-Step Solution 4 The New World of Consumer Packaged Goods 4 The Challenge of Consumer Technology 5 The Right Automotive Strategy 5 Solution: Teradata Integrated Consumer Insights (ici) 6 Conclusion EXECUTIVE SUMMARY When a consumer isn t happy with the product she just bought, where does she go to complain or ask for help? She might go back to the store, or call the manufacturer or the retailer, and she might go to the manufacturer s Web site. But more than likely, she ll hop on Facebook or Twitter to vent her frustration, where all of her friends and followers will witness the problem and perhaps share their own experiences. In the best-case scenario, the manufacturer will know about this conversation and use the opportunity to weigh in with the appropriate customer support and marketing responses. But too often, these kinds of conversations end up defining the brand for consumers without the manufacturer participating or even knowing that it s happening. This situation illustrates a central dilemma facing manufacturers as they attempt to move toward datadriven marketing: How can they capture data from a wide variety of online and offline sources (including the Web, , social media, and mobile and text messaging), analyze it, and then create highly personalized messages to targeted consumers and deliver those messages at the right time and at the right touch point? Making it even more challenging for manufacturers to get cozy with their consumers, this process plays out against the product lines across the company and can involve departments and systems ranging from marketing and technology to customer service and product development. TRENDS AND PAIN POINTS Traditionally, manufacturers focused their brand marketing and consumer interaction on the mass media. In the age of the connected consumer, however, that s no longer enough. To fully engage consumers in the age of connected shopping, manufacturers must capture and analyze data across a multitude of sources and optimize interactions across a multitude of communications channels. It s critical to recognize that consumers now research and discuss brands among themselves with or without manufacturer participation, establishing brand meaning and value independent of ad agencies, campaigns, and mass media. 2
3 That creates a vastly more complex journey from knowing about a product to buying it. The process used to incorporate three simple steps: 1. See an ad. 2. Go to the store. 3. Buy a product. Now it might work something like this: 1. See an ad. 2. Check out online reviews. 3. Poll friends through social media. 4. Compare features among similar products at corporate Web sites. 5. Check prices online at retailer Web sites. 6. Search for coupons. 7. Then, and only then, buy a product. Just as important, thanks to the proliferation of smartphones and other networked devices, this process is now playing out at home, in the supermarket, in the fitting room, in store aisles, and even at the cash register. Fortunately, emerging big data tools and techniques make it possible to collect, track, analyze, and optimize the huge amounts of structured and unstructured information created by these new relationships. Access to detailed consumer data can be a huge asset for manufacturing companies, but understanding and optimizing all that data and all those complex communications remains challenging. Consumer communications now occurs simultaneously in multiple media channels, including social, mobile, , and text messages, which generate a variety of data that must be managed in real time, while it remains relevant. Record levels of media saturation experts estimate that consumers now see thousands of marketing messages every day means manufacturers must deliver tailored messages when they have the most value to consumers so they won t filter or tune them out. These communications can affect an entire manufacturing company, from marketing to customer service. Traditional consumer-insight tools (panels, surveys, syndicated data, and one-time promotions) can t keep up, and most manufacturers don t have the technical capabilities to efficiently capture, integrate, and use these integrated consumer insights to gain a complete view of their customers. That s why manufacturers are struggling to establish scalable and personal connections with consumers based on accrued insights from all relevant data sources. And it s why a leading analyst firm estimates that by 2017, marketing executives will spend more on technology than will technology executives. TOP FIVE MYTHS OF BIG DATA ANALYTICS ~ Big data is just hype Marketers in every industry are already using big data analytics to increase revenue, reduce the cost of going to market, and improve accountability. ~ Big data is unstructured More accurately, big data is multistructured; some data types fit nicely into spreadsheet rows while other data types fall into less easily analyzed formats. ~ Big data is the answer to all your problems Harnessing the power of big data analytics is crucial but must be coordinated with an integrated marketing management solution to bring insights to market in a sustainable and scalable way. ~ The big data conversation starts with somebody else IT participation is an essential part of making big data pay off, but the strategic vision starts with marketing leadership. THREE-STEP SOLUTION By 2014, according to a leading analyst firm, companies that develop an integrated marketing management strategy to meet customers expectations will deliver a 50 percent higher return on marketing investment than those that don t. Because their social media and digital marketing efforts are not fully integrated and optimized, it should be no surprise that many brands are not yet seeing the sales gains they might expect. Developing an integrated approach consists of three important steps: 1. Be aware of all the myriad data sources, offline and online, that affect a manufacturer s brands and products. That includes individual identity data, behavioral data (location, purchase history, call-center transcripts, etc.), derived data (credit scores, personas, influence scores, etc.), and self-identified data (purchase intent, social media likes, user-generated content, etc.). 2. Analyze gathered information with big data techniques and tools. Forrester Research says more than 45 percent of current big data deployments are for marketing, and marketers are expected to spend 60 percent more on analytics solutions in the next three years. The goal is to understand how the different channels interact and then put it all together to build an accurate and complete picture of current consumer behavior. 3
4 3. Drive action from the data analysis. With data-driven marketing, manufacturers can join the conversation when consumers talk about their brands, their products, and industries. These kinds of personalized dialogs can help capture consumer mindshare, spurring them to action and converting them into loyal shoppers and brand champions. More broadly, it enables making coordinated business decisions to boost marketing effectiveness, customer satisfaction, and, ultimately, sales. THE NEW WORLD OF CONSUMER PACKAGED GOODS In an industry plagued by slow growth, private-label competition, increased commodity costs, and a lack of innovation, consumer-packaged-goods manufacturers must rethink the definition of successful consumer-goods marketing. In the old days, 80 percent of purchase decisions could be influenced in-store but not anymore. Despite a huge increase in trade promotion expenses, consumers are now an estimated 80 percent confident in their shopping list before they enter the store. Getting on that list starts well before the first moment of truth the instant when a shopper traditionally makes his or her purchase while standing in the store aisle. Savvy manufacturers who want to get on those lists need to own what Google calls the zero moment of truth, when consumers make their choices online before venturing out to the store. So they re adding campaigns, brand Web sites, text-message promotions, mobile applications, and social media to marketing mainstays such as coupons, packaging, shelf position, endcaps, freestanding inserts, and television and print advertising. But making all that work at scale requires a unified, consumer-centric approach to creating and nurturing individual relationships. That means executing dialog strategies, not just sending out isolated mailings. Marketing to a male buyer researching shaving and skin care, for example, requires messaging across multiple channels, including online. Automatically initiating programmatic follow-ups, including message reinforcement and reminders, is essential to ensure consistent action and closure. Optimizing a dialog strategy requires coordinating all the touch points, as follows, to create and send personalized messaging that accounts for multiple consumer situations and responses: 1. Consumers entering the campaign at different times 2. Consumers progressing through the dialog at their own pace via different routes, based on their particular needs and preferences 3. Consumers responding to each step, not in waves determined by preprogramming To maximize effectiveness and return on investment (ROI), testing and analysis is required at each step of the process. THE CHALLENGE OF CONSUMER TECHNOLOGY Marketing consumer technology presents special challenges. Technology consumers can be extremely sophisticated, with a lot to say about a product s performance and features. Active online reviewers and social media sharers are supported by an aggressive media that can lead and amplify user conversations. To keep up, technology manufacturers must actively monitor, analyze, and participate in user conversations to protect their brands. On the plus side, technology companies can use that participation to optimize their marketing to focus on the issues most important to consumers and also to refine their product designs and functionality to mesh with their target audiences desires. For example, when Microsoft previewed the latest version of its video-game console (the Xbox One) in the spring of 2013, social media outlets erupted with criticism over certain restrictive antipiracy features that required the console to be verified online to play even off-line games. Tracking and analyzing the controversy was critical to Microsoft s understanding of whether this was a real issue for most gamers, or a hot-button debate instigated by a few troublemakers (or even competitors) that wouldn t affect sales. The company ultimately reversed course and eliminated the restrictions. At every step, one message simply does not fit all situations. Jupiter Research reports that by segmenting and targeting prospects based on specific behaviors, marketers can increase open rates by more than 50 percent and conversion rates by more than 30 percent. 4
5 THE RIGHT AUTOMOTIVE STRATEGY Even though cars are typically sold through dealers, automotive manufacturers retain a huge role in brand perceptions, which has expanded as car shopping becomes increasingly defined by extensive pre-purchase research using online, mobile, and social channels. Taking advantage of those channels is a crucial imperative for manufacturers, whose brands are judged by those interactions as well as by their actual products. Optimizing the automobile shopping experience is a key part of that process. Fiat Group s Digital Messaging Center in Europe, for example, automatically manages the marketing operations surrounding consumer requests for test drives for all the company s brands. Coordinating with the dealership, the system checks schedules and availability and automatically closes the loop. It uses an adjustable template to automatically send consumers custom prepared messages based on where the user requested the test drive and a matrix of more than 40 attributes, such as desired model, color, options, dates, special requests, and readiness for purchase. Fiat geo-references the messages to combine the lead attributes with the dealer involved to initiate automatic functions such as greetings, reminders, confirmations, and surveys. The goal is to make sure the loop is closed and to convert a higher percentage of test drives into purchases. NINE THINGS YOU MUST KNOW ABOUT YOUR CONSUMERS 1. Demographics 2. Psychographics 3. Communication preferences 4. Web/online behavior 5. Social media influence 6. Mobile behavior 7. Location 8. Consumer affairs 9. Third-party appends SOLUTION: TERADATA INTEGRATED CONSUMER INSIGHTS Teradata Integrated Consumer Insights (ici) addresses the challenge of breaking through a saturated marketing environment with targeted, permission-based, direct digital marketing. This comprehensive managed service combines data from multiple sources, within and across brands, generating 360-degree insights. For marketers, choosing a managed service means they can concentrate on how to apply the solution to their particular brands and consumer base. Simply put, Teradata ici enables marketers to get the right message to the right person at the right time through the right channel without having to worry about the technology. One-to-one, cross-channel dialogs with consumers occur over the Web, , social media, and mobile and text messaging, using a consumer s entire interaction history within and across a brand portfolio. To do that, Teradata ici integrates several key functionalities: ~ Capture, cleansing, and loading of consumer personal information into an integrated, enterprise-class consumer insights warehouse powered by an industryspecific, logical data model and Teradata Database and database utilities ~ Optimized access for operational and business reporting and analysis using Teradata Access Miner and thirdparty business intelligence tools ~ Industry-leading automated campaign management with Teradata Customer Interaction Manager, which automates functions such as profile editing, data processing, service portal usage, and incident and service-request creation and tracking (Customer Interaction Manager was ranked in the leader s quadrant in the 2013 Gartner Magic Quadrant for Integrated Marketing Management) ~ Ongoing best-in-class management of the database and applications for high performance and ubiquitous access In a study conducted by Telecom Advisory Services, integrated technology platform solutions such as those from Teradata cut acquisition and implementation costs by 20 percent, trimmed operating expenses by 43 percent, and reduced maintenance costs by 39 percent compared to point-solution approaches. Just as important, because Teradata ici is delivered as a cost-effective managed service, it allows marketers and analytics professionals to focus on what they do best. 5
6 CONCLUSION To truly understand consumers, manufacturers need cross-channel visibility, both within brands and across their entire brand portfolio. To capture and convert connected consumers in today s media-saturated environment, manufacturers must reach out to consumers when and where they want to be reached. Personalized, interactive consumer communications must become a core competency. By capturing and analyzing the millions of consumer interactions that would not otherwise become part of the manufacturer s institutional knowledge, manufacturers now have the opportunity to take advantage of game-changing integrated consumer insights to affect individual consumer outcomes. More effective marketing is only the beginning. Other benefits include more effective customer support, more targeted product design and refinement, and more efficient competitive analysis. Even better, manufacturers can now embrace this new paradigm via a comprehensive managed service that doesn t place new demands on their marketing and analytics professionals. To learn more about data-driven marketing solutions from Teradata, visit Innovation Drive Dayton, OH teradata.com Teradata and the Teradata logo are registered trademarks of Teradata Corporation and/or its affiliates in the U.S. and worldwide. Teradata continually improves products as new technologies and components become available. Teradata, therefore, reserves the right to change specifications without prior notice. All features, functions, and operations described herein may not be marketed in all parts of the world. Consult your Teradata representative or Teradata.com for more information. Copyright 2013 by Teradata Corporation All Rights Reserved. Produced in U.S.A. EB6903 > 1213
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