THE MOST IMPORTANT CUSTOMER DATA POINT

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1 ONE TOUGH QUESTION: ANALYTICS THE MOST IMPORTANT CUSTOMER DATA POINT When it comes to understanding customers, all data isn t created equal.

2 There are many useful data points about customers. These pieces of information vary in importance depending on industry, channel, goals, and the like. But there will always be one that s most important to marketers in their quest for engagement, loyalty, and revenue growth. Perhaps it s the last item purchased; or it could be a customer s value. Direct Marketing News asked several marketing insiders: What s the most important data point about a customer, and why? Their responses speak volumes. -GINGER CONLON

3 TABLE OF CONTENTS 7 Scott Houchin Managing Principal of Digital, eclerx Derek Slayton CMO, NetProspex 4 Anna Rosenman Director of Product Marketing, Salesforce.com 8 Barry Lowenthal President, The Media Kitchen 5 Rob Seaman VP Product, WibiData James Green CEO, Magnetic 6 Bonnie Crater President and CEO, Full Circle CRM 9 Damon Waldron Director of Demand Generation, Leadspace David Petsolt Founder and President, buy- Calls

4 ANNA ROSENMAN Director of Product The most important data point about a customer is the one that they want and expect you to have. Customers want targeted, personalized experiences. And expectations for superior service and richer relationships grow higher every day. They expect that companies will meet them halfway: understand their changing preferences, deliver better products and services, and recommend the next step to take. For example, if I move to a different city I want my insurance rep to call me and recommend the right renter s insurance. As I train for a marathon, I want to be reminded to upgrade running shoes as I hit 500 miles on my Fitbit. If a certain product is not moving through my grocery store, I want my distributor to reach out, evaluate the inventory and supply chain, and recommend a trade promotion. The data that customers share has evolved. The way that they use our product should inform a company how to improve product design. Customers communicate their purchasing preferences with their dollars at every point of sale, and ask for help with each download of a white paper, visit to a company website, or engagement on an app or community. Across industries, lines of business, and channels there are endless points of relevant data. But if companies can t respond to what customers share with us, it s as though they aren t even listening. If companies don t have a platform for customer success and business insight, the mountains of data they have are irrelevant.

5 JAMES GREEN ROB SEAMAN VP Product, What s most important is having the most complete and obtainable customer profile, and this involves Big Data. We live in an age where it s possible to know every click that a customer has made within your website. When you combine that with myriad other data points such as purchase history, search activity, Facebook and Twitter behavior, and more it becomes challenging to determine that one of these, even last item purchased, is more important than another. In fact, any single data point taken in isolation can give you a warped view of the customer. Big Data takes into account a multitude of elements that can reveal purchase intent of what consumers are most likely to buy. If you have a holistic view of your customer, you can toss aside what s not important and glean intent from what s left. A customer s most valuable data point is the most recent one whether it s a click for more product information, a phone reboot, a call to a call center, or a store check-in without a purchase. Customer lifetime value becomes your opportunity cost if you re not serving a current need. When marketers overlook the most recent data, customers get recommendations for products already bought, offers for new services when they just want their cable box to work, or packages sent to a former address. Or worse, the hellish experience of recounting the same complaint multiple times to different customer service representatives. Real-time data is a buzzword in many industries, but few companies apply real-time information about each customer s experience during the experience to morph and meet their current need. It s not enough to merely collect data in real time; marketers need to collect and use clicks, hovers, product usage, and customer support data as triggers to deliver personalized recommendations and experiences for individual customers within milliseconds. In today s lightning-fast world, where technology has enabled consumers to be more fickle than ever, taking real-time action based on real-time data is what s necessary to increase conversions, counteract propensity to churn as it arises, and improve your shot at winning customer loyalty.

6 BONNIE CRATER President and CEO, Full The most important data point for prospective customers is deal velocity. Deal velocity is the total time that a customer takes to make a purchase. What s so important about deal velocity? This metric is a lever for increasing revenue, reducing sales cost, and identifying bottlenecks in your sales and marketing processes. Increasing revenue is the first thing that comes to mind. When I was at Oracle we used to talk a lot about programs that would reduce the sales cycle time. Anything we could think of that would shorten the sales cycle was a high priority and it was simple math. Shorten the sales cycle by 50% and you ll get twice as much in sales output in the same amount of time. Reducing sales costs is also an obvious benefit. If salespeople can be twice as efficient, the cost of sales is going down. Better velocity drives higher profits and the new profits can be used to fuel more growth. Last, you can use velocity metrics to identify bottlenecks in your sales process. In the positive, you can identify and fund campaigns that drive the shortest velocity.

7 SCOTT HOUCHIN Managing Principal of Customer lifetime value (CLTV). Companies use CLTV to understand customer behavior and quantify customer economic value. With the availability of Big Data and sophistication in statistical modeling analytics, marketing leaders can convert this data into actionable insights to help grow their business. CLTV models use historic transaction data to predict expected margin from individual customers. The CLTV metric is determined by combining the predicted value of margin and probability of customer survival. Beyond gauging a customer s propensity for repeat purchases, CLTV is a powerful metric to use for predicting the lifecycle stage of an individual customer. With the right mix of technology, data, and modeling, marketers can use CLTV to predict when a customer will purchase and where they are in the decision-making process answering the questions What are they researching and where? and What purchase factors are they weighing? Using CLTV a vendor can not only analyze where the customer will likely execute their final purchase, but can also influence that purchase journey through delivery of decision-specific messaging and marketing. Rather than focus on the value and use of a specific data point, CLTV coupled with lifecycle analysis turns multiple data sets into a single decision tool used strategically to segment customers for targeted, tailored content specific to their predicted decision stage. DEREK SLAYTON I ll take this question in two parts, and use ourselves as an example. For existing customers, and this is from a B2B perspective, the most important data point is how much value they have received from being one of our customers. This helps us focus first on working with them to determine the value metric at the outset of the relationship which our customer success team is pretty religious about. Then, moving forward, we understand how to look for opportunities to increase that value potentially, with other services and products that offer upsell and cross-sell opportunities. But it starts by working with customers to measure and document the value they ve received. For prospects, there are two important data points for us from a marketing perspective. The first being, are they in our target market. We define this pretty tightly by company and buyer persona. The second point is whether they re ready to engage with us. That is, have they shown the digital (or physical) body language that indicates that they re actively interested in learning more about the space our products play in? If no, we need to nurture them more in marketing. If yes, we need to get them over to our sales team so they can do their thing.

8 BARRY LOWENTHAL President, The As campaign information became more readily available, clients started to quickly get information overload. So did agency folks. We started measuring everything simply because we could. While we were being proactive and thorough, we were also contributing to the problem. We reported on impressions, site visits, click-throughs, shares, updates, completions, bounce rates, conversions, and sales, to name just a few of the data points we tracked. What quickly became apparent was that not all data was created equal, and just because one data point mattered for one campaign it didn t necessarily matter for the next. We solved the problem by investing in data visualization tools that allows clients to customize their own campaign dashboards. But that still didn t solve the problem of helping clients understand which data points are most important. Our clients that sell products will tell you that sales is the ultimate KPI. Their problem is understanding how all the other touchpoints in a marketing campaign contribute to sales. We ve used fractional contribution studies to evaluate digital campaign contributions, and we ve used marketing mix studies to measure how offline media contributes to sales. We ve also started deploying cross-device measurement tools to understand how exposure on one device affects sales. Our clients that don t sell products but advertise to bolster and shape their reputations say that brand favorability is the ultimate KPI. But favorability isn t something that can be measured and optimized in real time. For those campaigns we often use engagement as a proxy since we know that customers who engage with a brand s marketing feel more favorable toward it. Revenue (growth) is the data point that serves as the clearest measurement tool. But along the way, there s a lot of other campaign-specific data that matters and also requires measuring, reporting, and optimization.

9 DAMON WALDRON Director of Demand While there are many helpful customer data points, what we call the Persona Score is the most essential. In short, is this person the right fit? How closely does he match your ideal customer profile? The key to making this Persona Score effective is using unstructured data from the open and social Web to understand the behaviors, interests, and expertise of a given person. With one number you can then make the decision of whether to pursue the prospect. Behavioral data is fantastic and can give you a clear hand raise. Unfortunately, that hand raise is useless if the hand is attached to someone who is not a potential buyer. In contrast, once you ve identified the right person, you can use every marketing channel you have available to get her to engage, from targeted s to SDR outreach, among many other tactics. DAVID PETSOLT Founder and There s one data point for us that determines everything about a customer: contribution. Many variables affect it sales price and volume, variable and fixed costs but it s the only true assessment of the profitability a customer is adding to the organization. It s also one of the most efficient ways to determine whether a campaign or sales strategy needs to be realigned.