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The Convergence of Digital and Physical Shopping Experiences

Historically, brick-and-mortar retailers have approached development of their online storefronts fatalistically. Companies thought that increasing online business couldn’t happen without poaching from brick-and-mortar storefronts—and if anyone was going to poach brick-and-motor business, it might as well be that same company’s online business. Online and bricks-and-mortar retail were treated as two separate animals. To grow online business, many companies thought they had no choice but to sacrifice bricks-and-mortar sales. All advances in online functionality for customers meant directing those customers away from brick-and-mortar locations.

Then, last year, True Religion changed the retail game by tying its latest tech innovation directly to its brick-and-mortar storefronts.

True Religion Brings Digital In-Store

The future of retail is the convergence of the physical and digital shopping experience. Retailers can use technology to enhance the in-store experience, essentially creating a new experience every time a shopper walks into a store.

Picture this: a customer walks into a True Religion store in London. The ground floor features men’s apparel, with women’s and children’s one level below. There is a “denim bar” designed to showcase product and spark conversation. Five digital screens on the ground floor run True Religion advertising campaigns—a sort of “Digital Runway.”

True religion digital runways show convergence of digital and physical shopping
Digital runway screens are visible from outside a True Religion store. Image credit: fashionunited.uk

With Band for True Religion, a customer using the True Religion app transmits data to associates’ Apple Watches the instant she steps in the door. Sales associates can use the technology to offer informed purchase recommendations. The Apple Watch app will even sync to the company’s inventory system so that sales associates can stay on top of what is in stock and access products from other stores around the globe.

true religion apple watch app aids in Convergence of digital and physical shopping
True Religion “Band” App for Apple Watch. Image Credit: sprinklr.com.

One challenge retailers face is providing consumers with a shopping experience that is relevant—a place that means something and provides an enjoyable experience every time they walk into the store. Band by True Religion not only streamlines shopping, it also allows the sales associate to impress the customer, using technology to heighten the retail experience.

To compete with online retailers, brick-and-mortar retail locations should implement a series of digital advancements with the intent of providing each shopper with a more personalized experience.

Focus on In-the-Moment Experiences

The goal for retailers should not be to just acquire purchase behavior after the fact, but to predict the emotions that drive consumers to buy—or not buy. Retailers can use digital queues to analyze the behavior of non-purchasers, for example, identifying emotions that drive product choices while providing a more immersive and intimate shopping experience. A new Store Non-Purchaser product from ForeSee does just that, identifying digital shoppers and surveying them to determine why they chose not to make a purchase. A retailer can use that information to make changes to not only its online storefront, but also its brick-and-mortar storefront.

Combining physical and digital is an opportunity to add a layer of unexpected experiences and services to the traditional shopping experience. FaceCake Marketing Technologies recently debuted a new platform that allows customers to virtually try on a look. Obviously, this technology can heighten the at-home online shopping experience, giving the consumer access to a wide range of options—but it could revolutionize the brick-and-mortar experience too.

Imagine those True Religion Digital Runways—but instead of a model showing off the latest True Religion jeans, a sales associate can show a hesitant customer an image of herself wearing a pair of jeans she discarded on her way to the fitting room. Alternately, in-store video screens could use customer purchase history data to surprise a retail buyer by showing her new products that would look great with something she recently purchased. Combine the entertainment factor of virtual-try-on with the instant gratification of the jeans in questions being a few feet away in a brick-and-mortar store, and you have a retail win.

The times of trying to accommodate the general consumer are over. Retailers can now use data to make informed communications with specific individuals, rather than general solicitations that will be ignored. Starbucks’ mobile app not only allows consumers the opportunity to skip the line, its hyper-personalized loyalty program allows the coffee giant to personalize a customer’s experience no matter what brick-and-mortar store he walks into.

The objective should not only be to improve the buyer’s journey, but also to reinforce brand values. Retailers must promote a unique point of view in order to generate loyalty. REI’s now-famous Black Friday boycott, coupled with the retailer’s #OptOutside social media campaign, cemented the brand as one that respects its employees and values the outdoors.

Online + In-Store: Better Together

The role of stores is changing. Rather than treating online business like an alternative to a physical storefront, retailers need to integrate the two experiences. Customers are looking for brands that converge their digital and physical touchpoints into a singular, seamless shopping experience. By taking a cue from businesses like True Religion, retailers can use digital experiences to enhance the shopping experience at brick-and-mortar locations. The convergence of digital and physical shopping means retailers can provide consumers an enhanced journey to buy what they want when they want, and how they want it.

Brick and mortar retailers can still compete with online retailers by meeting unmet shopper needs. They can implement digital experiences within the added bonus of instant gratification. The in-store shopping experience provides a unique experience that cannot be replicated by online competitors.

Check out more ways in which physical stores have advantages over online establishments in Retailers: What You Need to Know to Win Against All-Powerful Amazon.

Retailers: What You Need to Learn from Holiday 2016

For years, retailers have been told that to compete in the new ecommerce world, they need to have a well-established omnichannel organization. The 2016 holiday season proves that the time has come—and it is not going away. Retailers that do not have a solid omnichannel strategy that lets customers shop whenever and however they want to shop are going to be left in the dust.

How do I know this? Let’s look at the evidence.

Role of the physical store has changed

December store sales were down 10.7% and saw a 13.4% decline in shopper traffic. However, the average transaction value and sales per shopper metrics were up significantly (5.6% and 3%, respectively).

holiday 2016 lessons learned

First Data’s Holiday 2016 SpendTrend report found that overall consumer spending growth increased 4.7%. Whether using a PC, tablet or mobile device, Americans continued the recent trend of making their holiday purchases online as retail ecommerce transactions grew by 12%. Additionally, more than one fifth (21.3%) of all holiday spending was conducted online, a substantial increase from 15.4% last year.

This sends strong signals that the role of the physical store has changed. In this digitally-empowered era, consumers will shop for a specific subset of products in brick and mortar stores: fit products. These are higher value products that shoppers want to try out or try on in the actual store location. For items that are less expensive, commodity, or that they’re already familiar with, they’re buying online.

This indicates the need for a clear omnichannel strategy to take advantage of brick and mortar strengths and maximize opportunities.

Pressure to acquire customers through promotions

According to analysis by DynamicAction, retailers were holding on average 12% more inventory by mid-December than they were in 2015. This led to big pressure to discount to acquire more customers and move inventory. Retailers were therefore promoting much more heavily in 2016 than in 2015. Overall promotions were up 34% overall and 52% specifically within the holiday season.

The combination of too much inventory with too many promotions provides a mixed bag of results. As a retailer, you might have to promote what you were already promoting just to move it off the shelf. However, if you instead have a clear understanding of the buyer’s journey and an omnichannel strategy to support it, you know how customers are going to buy and can properly inform your inventory levels.

Black Friday lost its crown

Historically, Black Friday is the biggest shopping day of the year in terms of people that visited and purchased at a physical store. However, Black Friday was dethroned in 2016 by Christmas Eve Eve (December 23rd).

The biggest reason for this is that About 10 million more Americans shopped online than in stores over Black Friday weekend—it was a large weekend, but people were shopping online. Similarly, Target and Kohl’s reported record online sales on Thanksgiving. Again, this issue is not that people aren’t shopping; people have just changed how and where they are shopping, and retailers must understand and react to that reality.Holiday 2016 lessons learned

Omnichannel: The time is now

Holiday 2016 retail performance is proof that the role of stores has changed. Brands are converging their digital and physical touch points into a singular, seamless shopping experience—driven by a thorough understanding of the buyer’s journey. Successful brick and mortar stores are right-sized in footprint and located in high-trafficked areas, staffed optimally around peak traffic hours, and focused on brand awareness, customer acquisition and value-added services, complementing the long-term cultivation of shoppers through various digital touchpoints.

Omnichannel, omnichannel, omnichannel. You’re been hearing it for a while. Now is the time to act.

Retailers: What You Need to Know to Win Against All-Powerful Amazon

Many retailers are beginning to feel like competing with a dominant force like Amazon is a losing battle.

In the recent article “Can your brand win vs. Amazon?,” eBags.com CEO Mike Edwards examines the struggle for vendors and retailers to remain profitable in the shadow of the online retail giant. Amazon offers lower prices, convenience, a wide selection, product recommendations, a range of shipping options and a personalized customer experience. They’ve set the standard for customer expectations, and if you ignore that standard, you won’t succeed.

But there is reason for hope. In fact, as Edwards points out, smaller retailers, especially those with brick and mortar locations, have distinct advantages over ecommerce giants like Amazon.

Our research of five major brick and mortar retailers plus Amazon indicates that the natural advantages for brick and mortar stores lie in three key areas of the buyer journey.

The Buyer’s Journey

Traditionally, we’ve thought of the sales funnel as a linear process consisting of six steps: awareness, interest, consideration, intent, evaluation and purchase. But the buyer journey is not linear at all—it’s a very convoluted, self-directed path based on what the customer is trying to achieve. In order to understand the buyer’s journey, we therefore have to understand the buyer’s end goal.

Every CMO needs to first and foremost be asking: What job is the customer trying to do?

We have therefore defined the buyer’s journey through the lens of the jobs-to-be-done theory. With this approach, there are 15 steps through which the buyer advances to choose, acquire and use the product he wishes to hire to complete his job.

buyer-journey-ebags-post
15 steps of the buyer’s journey

Brick and mortar stores are uniquely positioned to improve the experience for—and grab the business of—customers at following steps in the buyer journey:

  1. Product identification
  2. Product selection
  3. Returns

1. Product Identification

Product identification is the step in the buyer’s journey when the consumer is determining which solution(s) to consider to solve his problem or complete his job—and a retailer can help the consumer decide which products to consider. Brick and mortar’s have the advantage here because they are able to provide problem solving experts.

For example, if someone is going skiing for the first time, he may go into a store to buy or rent skis. He may not know that he also needs poles, goggles, boots, nice socks, hand warmers and more. The store expert can help this buyer make sure he has everything he needs to make his first skiing experience enjoyable. It is difficult to find a comparable problem solving experts online—looking at the “Customers also bought…” just doesn’t cut it.

2. Product Selection

This is the step of the buyer’s journey in which the buyer chooses the solution to acquire. There are some products that consumers really want to evaluate in person. Try them on, hold them, feel them, test them out or consult with an expert (e.g. Apple Genius) before selecting an item to purchase. Scott Neslin, Professor of Marketing at Dartmouth, calls these products fit products.

Brick and mortar retail stores have a distinct advantage when it comes to the selection of fit products. Customers can sit on their prospective sofas, try on jeans, ask questions about how their climbing gear should fit, etc.

The Samsung 837 store in New York does a wonderful job helping customers test out Samsung products. The store offers the opportunity to try out and play with the latest Samsung products without having to purchase them. It also offers customer care services with troubleshooting and workshops for new and existing users. Finally, the store has an impressive VR tunnel where customers can step into a virtual world and be transported anywhere—a studio, a kitchen, a playroom, a living room—all where customers can see how Samsung products would fit into their everyday lives. 

Samsung helps customers to picture products in their lives to win against amazon
Virtual reality in Samsung 837 store. Image Credit: Samsung

3. Returns

Unfortunately for retailers, returns are also part of the buyer’s journey. We all know that if the product a customer buys doesn’t meet his expectations (or satisfactorily complete the job he is hiring it for), he may return it. What our research discovered, however, is that customers are more likely to buy an item when the prospect of returning it seems easy and convenient. Repackaging and mailing an item back seems cumbersome, which is why retailers with a physical location have an advantage at this step in the journey.

Further, our interviews indicated that, while an easy return process increases propensity to purchase, it do NOT increase returns—most people do not end up taking the products back. Simply knowing that they can easily do so if they choose to makes them more likely to buy.

Retailers should therefore allow for—and even encourage—in-store returns and aim to make the process as simple as possible. The best return policies are those with no questions asked.  Kohl’s takes this approach: they have no time restrictions on returns, and they don’t care if you have a receipt. Athleta also has a great return policy. Unlike at sister companies Gap, Banana Republic, and Old Navy, you can return lightly used items to Athleta any time to receive a refund. The store offers a give-it-a-workout guarantee so that customers can try out the performance wear before committing.

good return policies help to win against amason
Athleta upstages sister companies with its return policy.

Find and Optimize Your Advantages

While it may seem impossible to compete with the likes of Amazon, what makes your business different may also make it better. As eBags CEO Mike Edwards says, “The biggest weakness of Amazon is they do not have stores or OMNI partnerships that make sense.” Forbes agrees. According to a recent article, “Retail companies with a physical store presence capture the majority of retail sales” (which is why Amazon has jumped on the bandwagon, trying to catch up to you).

We believe that understanding the buyer’s journey through the lens of the jobs-to-be-done model allows retailers to find their biggest opportunities to improve their customer experience—and compete against the giants like Amazon.

Navigating the Age of Digital Disruption for Retailers and Consumers

Before a snowflake has fallen or a holiday decoration is placed, retailers and consumers indices’ have already planned on the sales expectations they want to achieve. While the digital frontier shows no sign of slowing, now is the time to prepare for 2017.

A recent report by McKinsey Global Institute estimated that by 2025, digitization could add up to $2.2 trillion to annual U.S. GDP. Yet surprisingly, that very same report also revealed that the U.S. economy has only reached 18% of its digital potential as of today. This figure shines a light on the expansive opportunities that lie ahead, as well as the challenge of continuously adapting to fill the gap between the promise and the reality.

Mastering Digital Growth: Check Out the White Paper

Digital Blur and the Return on Attention (ROA) Methodology

While 90% of commerce still takes place in a physical location, it is increasingly difficult to differentiate between digital and physical worlds. This lack of distinction is forcing brands to re-think how they do business and how they can increase agility, innovation and responsiveness. Also, with more and more vendors competing for attention, consumers and retailers are turning to a new advertising metric called return on attention (ROA).  John Hagel helps shine light on this subject in a recent article in The Marketing Journal. It is becoming increasing clear that customers will pay for the opportunity to increase ROA and avoid the classic push model of advertising.

The Me-Me-Me Syndrome

The consumer’s expectations are all about “me.”  They look to their favorite retailers to enhance the shopping experience within a very complex and competitive digital world. In addition to being savvy shoppers, consumers expect a level of customer experience and brand quality that piques their interest, preference and ultimately their behavior to buy. Mindful retailers look for relevant, personalized marketing that consumers respond to and even brag about. Retailers have come to expect greatness from all the 2016 campaign efforts, but when they fall short, poor planning may be to blame.

Three Keys to Mastering Your Digital Growth Potential

Understand Your Organization:

When it comes to business growth, it’s easy to get hung up on external factors. But first thing’s first, you need to look closely at the internal landscape. Fragmented teams, intricate organizational structures and a lack of clarity on internal capabilities are all things that can make digital integration problematic and have a detrimental effect on growth.

Understand Your Customer:

The challenge to understand the customer gets harder with all of the digital noise out there. Customers are more than web visitors, more than the social media posts and more than coupon clippers. They are people with concerns and challenges, living in a digital flurry of myriad opportunities. They expect retailers to reach them at a deeper level­­–a personalized level, a level that helps them brainstorm, empathize and fill their needs. A good, solid understanding of your customers now and in the future is the heartbeat of delivering a perfect customer journey that gets brilliant results, on every platform.

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Understand Your Data:

As consumers create data at work, at home and on the go, businesses try to cope with the abundant change happening in a blink of an eye.  Disparate systems can hamper decision-making among retailers, and outdated IT architecture cannot cope with the huge influx of data–creating a siloed marketing effect. Marketers need easier ways to explore data, uncover new insights and make informed decisions instantly from any device. However, achieving this can be difficult for many organizations given the complexities of outdated IT infrastructures. If you are to leverage data properly and use it wisely, you will have to have a central point of truth that drives successful customer engagement.

Beating the Digital Disruption Dilemma

The pace and magnitude of the way we do business is known as “digital disruption.” With global competition on the rise, most companies are working towards the digital frontier–focusing on multiple digital channels to create a better customer experience. The increase of digital platforms is on the rise the thus increasing the importance of companies, of any size, from all over the world, being able to think outside the box and roll out products more quickly and efficiently than ever before.

This is the new digital frontier–the new age of supply and demand for customers. Are you prepared to meet the expectations of the consumer? Check out our latest eBook “Facing the Digital Frontier” to find out.

Customer Experience and the new Omni-channel Paradigm

imageAs marketers, we are all aware of the multitude of choices our customers have when they need to find information. Traditional advertising channels are delivering direct mail, TV advertisements, print and infomercials, while blogs, product reviews and comparative shopping sites can quickly deliver information via computer, phone or tablet. One of the biggest challenges is not only knowing who our customers are, but recognizing them across devices with seamless, consistent experiences. Recently a few Harte Hanks Sales executives took part in a Think Tank discussion about this topic with other leading B2C marketers and Frost & Sullivan. This article shares the highlights of that discussion.

The increasing level of buyer engagement across numerous online and offline channels makes it challenging to have the right touch points in place to create a unified customer experience. In order to build a well-constructed approach to omni-channel marketing, building comprehensive customer profiles of actual buyers is critical.

Some of the challenges that marketers face when building these profiles are:

  • Data and functional silos, and lack of alignment between customer facing teams and marketing teams
  • Difficulty identifying the online and offline channels customers are using
  • Lack of understanding about how these customers are moving from one channel to the other

It is important that marketers figure out how to communicate to the right stakeholder at the right moment. It is also critical for marketers to understand what relevant information the customer needs, when the customer needs it, and how the customer wants to receive it. So, how do you get started in creating this omni-channel customer view?

  1. Implement a cohesive customer experience strategy: Organizations must ensure that they are presenting a cohesive, customer centric customer experience, and that customer experiences are front and center of overall strategy. Ensure customer reactions are captured and communicated across the organization – don’t let siloes and bureaucracy prevent your business from being customer driven. You must be agile in responding to changing customer patterns. Read more about engaging your organization in a consistent CX.
  2. Create a unified view of customer data: Access to data is no longer an issue, with multiple in-house and third party data options. Data collected needs to be acted upon in real time or close to real time for it to be of any use. Make sure that your data is easily accessible to all parts of your business so that it can be easily acted on.
  3. Understand customer lifetime value: A single purchase customer is the worst for any business. Retaining a customer is more challenging because brands are only as strong as they are convenient from a purchasing decision perspective. Brand loyalty is being undermined by the convenience of other options being only a click away. Leverage your data to become more predictive and personalized – brands must ensure that they are delivering a relevant experience to drive lifetime value.

Though most companies are still far from the ideal omni-channel experience, almost all marketers agree that gaining a single view of the customer and having an omni-channel strategy is critical for survival.

Harte Hanks brings innovative thinking to create effective omni-channel customer experiences for the world’s largest brands. Deliver the right message at the right time with Total Customer Discovery. Manage your data and create accurate views of each customer with Data Refinery. Or, get in touch to schedule a free strategic assessment of your marketing programs.

The Machines of SXSW Future

sxsw-600x379We’ve been urged (well, that’s maybe overstating a little) to follow up on the pre-SXSW evaluations post. In it, Alan opined that the three “tracks” most likely to get most industry attention were Wearables, IoT and VR/AR.

We’d say he pretty much nailed it. Well, except that (in our view at least) Wearables was usurped by discussions on AI and Machine Learning.

Not to say there wasn’t excitement about some of the world’s best start-up wearable companies demonstrating their products––particularly cool Korean firms like skin care and health device WAY and posture-adjusting wristband ZIKTO––but we were not as blown away as we’d hoped. Anyway, back to self-learning machines …

Artificial Intelligence
With the Google DeepMind AlphaGo triumphs against Lee Sedol fresh in our minds, we heard from the brightest and best in AI such as Siri co-founder Adam Cheyer and Allen Institute’s Oren Etzioni in a panel called “Can AI Systems Really Think?” We also saw Professor Pedro Domingos talk about “The Secrets of Machine Learning Revealed” which outlined the five tribes of AI scientists and their schools of thought.

Many others, including Dag Kittlaus (Cheyer’s co-founder in new firm VIV) and Pinterest’s Head of Commerce Michael Yamartino, discussed all the forms and factors in AI’s implementation in the current and future worlds of medicine, education, environment and, of course, marketing.

They all took it upon themselves to reassure us that the singularity is (most likely) still hundreds of years away. But if you simplify it down (and we had to so it all made sense) what they were describing was tremendously exciting. And this area of thinking is a very rich and fertile space for data-driven marketers.

You’ve probably seen IBM’s new branded point of view advertising featuring Watson. And you also probably know marketers are using Watson to (among other things) build predictive models for buyer trends and to build optimal customer journeys. A sandbox for the industry’s best analytic and strategy minds to test hypotheses and determine the most efficient sequence of touch points to create optimal returns––Watson consumes limitless amounts of unstructured data as it goes about its work.

And yet its still “just” a tool … a very, very artificially clever tool, but nonetheless completely controlled by us.

In the world of shopper experience, AI is helping to predict customer preference before they can even recognize their desire to purchase. Ecommerce sites like Zappos.com and parent company Amazon have created an art out of the science of personalized recommendations. AI can create the same level of customer service as a local storeowner who’s had the same customer for years … all in the blink of a cursor.

So learning machines are definitely going to feature in future SXSW Festivals.
But what about other machines and devices connected to each other, and us, via the Internet? We are referring of course to the IoT track…

The Internet of Things
Well, we heard many hours worth of discussion about connected cars, cities, homes and more. From demonstrations on the trade show floor to panels around Downtown venues, it was hard to avoid someone talking about the Internet of Things. We were keen to learn about people’s opinions on an ethical code for makers and coders building these connected experiences (from AppDynamic’s Prathap Dendi) and how connected devices should respect our privacy (panel including Intel and Microsoft representatives).

And we had many divergent conversations about IoT … a sure sign it’s already an embedded and popular topic. “Cognition Clash in the Internet of Things”; “Internet of Banking Things”; “IoT: A Thousand Touchpoints of Marketing?”; and more.

So. the Internet of Things will continue to spread into more niche conversations over the next few years which leaves us with our final forecast––VR/AR ubiquity.

Virtual Reality
And so it came to pass … VR was EVERYWHERE! The trade show stands were full of Gear VR and Google Cardboard devices encouraging everyone and anyone to be impressed … Sennheiser demonstrated Ambeo VR headphones that let wearers experience sound in 3D. SAP promoted their Digital Boardroom, allowing users to enter a shared space and review documents using VR devices. And of course many panels and sessions took the trend to heart as they vied for attendee attention.

With more mainstream devices making it possible for more and more people to access VR content, the question for marketers becomes: What stories make the most sense?

The VR filmmakers at the panel discussion “New Advertising Models for Virtual Reality” sought to answer just that. All agreed that no marketer wants their advertising associated with a VR injury––so creating TVC style spots to be consumed instantly is unlikely to become standard practice.

Rather, the best brand-in-VR experiences are when audiences are transported to an experience that fits your brand values. Perhaps even your product, it it’s relevant in the case of the film. If all else fails, brands that sponsor a VR film can grab some of the attention—even if they’re not the stars of the show. But curating and presenting content associated with your brand personality is at least one way of capitalising.

Across the various VR sessions, many agreed the New York Times had scored the biggest hit so far with its Google Cardboard collaboration, “The Displaced”—and according to the Times’ SXSW session, they’re planning to ramp up VR editorial features to around twice monthly.

The Times’ VR story played out so well because they solved two key problems: 1) They literally put Google Cardboard kits in the hands of their readers by delivering sets with the Sunday paper; and 2) with “The Displaced,” they told a story that resonates with their brand’s core value of providing exceptional journalism to its readers. By adding a VR component to this particular story, they transported readers into the lives of three refugee children displaced by war and persecution. An essential story brought to life in a format that delivers more than important information: It creates empathy.

The best VR, everyone agreed, isn’t what you see, but how it makes you feel. And, as the technology becomes more and more commonplace, the machines of the future that let you feel a connection on a more visceral level, will win the day.

 

Alan Kittle is Global Executive Creative Director at Harte Hanks, and Andrew Womack is Group Creative Director at Harte Hanks.

How to Optimize Spend with Fractional Attribution

Database

 

When traditional “database marketing” first took off in the early 1990’s, marketing performance measurement and attribution was quite simple. We generated sales and direct mail campaign performance reports using a handful of dimensions. Attribution was easily derived through business reply cards (attached to direct mail pieces), phone numbers or tracking codes. We also used indirect attribution rules by making control group comparisons. We were fairly accurate and the process was easy to execute.

The Current State of Attribution

We all know that the marketing landscape has changed … and it continues to evolve with massive channel proliferation. With so much data and so many options regarding how to best apply a limited marketing budget, how can a CMO receive richer insight to influence tactical decisions that will improve media/channel performance?

Let’s first examine the various states of attribution from the viewpoint of the modern day marketer:

  • Direct Attribution: Still used widely today and still relevant. A specific customer behavior (e.g. a purchase) can be “directly” attributed to a given marketing stimuli via a unique code, landing page/URL, response device, etc. However, other marketing stimuli may have created momentum and been a significant contributor to the consumer’s ultimate decision to purchase.
  • Last Touch Attribution: Attributing the desired customer behavior to the last “known” marketing touch. Similar to “Direct” Attribution, but not always the same, here the marketer attributes the desired customer behavior to the last known touch. This method is very common when there are no specific tracking codes/tags that tie a desired customer behavior directly to a specific marketing stimuli.
  • Multi-Full Attribution: Channel proliferation has led to individual channel/media silos, each with their own unique attribution rules. The separation of traditional offline data and online data is very common. For example, direct mail data is stored in a traditional customer database, email data is stored with the email service provider, and online data is stored by various DMPs, by vendors/partners that are contracted to capture it, each often with their own siloed attribution logic taking FULL credit for the same desired behaviors.
  • Rules Based Attribution: Building on the “Multi-Full Attribution” described above, here marketers use what is often called a “common sense approach” to proportionally assign attribution to very siloed marketing stimuli. For example, a business had recently identified the large overlap between their direct mail and digital channels. For the overlapping purchases identified in both groups, 100% of a given purchase was attributed to direct mail, while simultaneously 100% was also attributed to a combination of digital channels. A rule was then quickly implemented to assign 20% of the attribution to the direct mail channel and proportionally reduce the attribution by 20% across the various forms of digital media. So, it is “fractional” by the simplest definition, but no real math or analytics was being used to assign the “fraction” to each media/channel.

Each of these options contains significant attribution bias towards channels/forms of media, that when taken for face value will result is less than optimal decision-making.

Database-1

What’s Next and What is Fractional Attribution?

Marketers must now leverage math, science and statistics to analyze and derive insight from large pools of data, much of which can now be integrated across channels to inform decisions across touch points during the customer journey. Fractional Attribution is a necessary tool for understanding campaign performance across a multitude of touch points.

Through advanced (and proven) analytic techniques, a weighting calculation is developed and applied to the various marketing touches during the customer’s buying journey. In short, you are attributing a portion of that customer’s purchase to each of the marketing touches that impacted the customer’s decision to buy.

Harte Hanks has a team of analysts that work with marketing organizations to create a fractional attribution model through a collaborative development process:

  1. Define the overall objectives and identify the behavior metrics you want to positively impact (e.g. response, sales, conversion, product registration, etc.).
  2. Define and implement the roadmap including identification of key performance indicators (KPIs) and setting the overall attribution approach. Companies have used both “quick start” fractional attribution solutions and more robust solutions that require dedicated data stores and data integration tools.
  3. Collect and compile the data.
  4. Execute the fractional attribution solution and create the scenario planning tool.

The “scenario planning tool” is what enables the user to optimize media/channel performance. Using the tool, the analyst or marketer can quickly run “what-if” analyses to estimate the impact of reallocating marketing spend across channel/media or removing a channel/media from the mix altogether. The end result is a much more informed decision that can result in significantly higher returns from your marketing budget. Performance data and insights from the optimization exercise are then used to calibrate and refine the attribution engine going forward.

Fractional Attribution rooted in proven math and statistical techniques is a critical tool to accurately improve and optimize the performance of an incredibly fragmented and complex system of channels and media, both online and offline.

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It’s not perfect – no marketing science or advanced marketing analytic solution is. But a robust modeled attribution solution is proven marketing science, and those that leverage it appropriately will generate higher return from their marketing spend and outperform their competitors.

Has your company used fractional attribution to better analyze your marketing spend? Tweet us at @HarteHanks and share your experience with us.

Smarter Demand Gen Awakens

Convergence of Tech and People Will Amplify Demand Generation in 2016

UnknownThe B2B demand-marketing ecosystem continues to evolve at a rapid pace. It’s driven by emerging technologies, tactics and buyer behaviors, alongside other well-established factors that continue to shape the discipline.

Industry influencers and analysts such as SiriusDecisions and Forrester identified a raft of demand generation trends and requirements in 2015. These range from better use of analytics as a foundation for demand planning to buyer journey alignment and operationalizing personas.

The notion of operationalizing personas involves integrating persona intelligence into demand generation efforts. At a fundamental level, it involves dynamic delivery of persona-based content, messaging and offers across email, landing pages and websites. It was first mooted by SiriusDecisions in 2014, but began to take hold last year. During 2016 it will occupy a more central role as we enter the next stage of the journey: smarter demand generation.

Why do we need Smarter Demand Generation?

Many B2B organizations find their demand generation efforts are characterized by small pipelines, missed targets and failure to respond to the needs of today’s buyers. It’s not surprising when you consider the seismic shift in buyer behavior over the past few years.

B2B sales and marketing is becoming increasingly complex and far less linear in its nature. There are multiple influencers, decision makers and stakeholders. There are multiple online and offline marketing channels. And there are multiple interactions and conversations taking place.

In this fractured, multifaceted landscape we need to find a path to more effective, joined-up demand generation. We need an approach that embraces the complex realities of the B2B sector today and handles them with ease. Smarter demand generation is the answer.

What does it mean?

A central feature of smarter demand generation is the convergence of people and technology. This is true throughout the process. Human insight and expertise facilitates the creation and operationalization of personas. It also shapes the development and substance of programs that are augmented and delivered via sophisticated technologies. Finally, individuals at the receiving end of smarter demand generation are served with optimized, highly personalized communications. Content is relevant to their current and future professional needs and it is delivered at an opportune time via the most appropriate platform. The upshot is finely tuned buyer engagement and a more robust pipeline.

This might sound a world away from traditional demand generation. And it’s true that it requires a deeply analytical and intelligent approach expertly integrated with technical capabilities. But every journey begins with a single step. Marketers who set their sights on smarter demand generation can quickly realize benefits at a micro level that can later be replicated at a larger scale.

Exploring smarter demand generation with one segment of your target audience can be a good place to start. Integrating data, technology, people and tactics for the first time isn’t easy – but it is more manageable and achievable at a smaller scale. Ring-fence a project that leverages insight to improve targeting, messaging and optimization. Then closely monitor the results to track the impact on the sales pipeline. Spotlighting the effectiveness of smarter demand generation in this way, and sharing it at a Board level, can create an appetite for more. It might help secure investment in the technologies and skills required for a wider rollout.

The B2B sector has strived for precision marketing for decades. With the awakening of smarter demand generation, it is finally within reach.

 

Alex Gill explores this theme in a B2B Marketing webinar on 27 January: How to align your marketing for smarter demand generation and stronger ROI. Book your seat here.

Hello Reality, Let’s Go Virtual

VR

As marketers, digital savvies and media gurus, whenever virtual reality (VR) comes into conversation, it’s safe to say we can’t help but drop a bold reference to Minority Report, The Matrix or Back to the Future. These pop-culture films made technologies of the future sexy; or at least provided recognizable uses for them.

But what was once only a dream for the future, has become a reality for many of these technologies: gesture-based technology, video calling, social networking and mobile payments were all fantasy in Back to the Future but are now part of everyday life. And the latest to hit the headlines as 2015 draws to a close? Virtual reality.

Samsung Gear VR

Global mobile provider Samsung launched the Gear VR Innovator Edition last year to great success, which can largely be attributed to the fact it ran off the firm’s flagship Galaxy smartphones rather than housing its own built-in power unit. This design had two fundamental impacts on the market:

  1. With power driven by the Galaxy smartphone, the Samsung headset was significantly cheaper to produce. Its price was therefore significantly lower than rivals, who were building processing power directly into their headsets.
  2. Content could now be distributed through existing app platforms already established in the market.

And it’s the second point that makes the Samsung approach a success for today’s consumer. One of the smartphone’s earliest accolades came in Apple’s advent of the App Store which radically changed our notion of smartphones’ capabilities overnight. “Nothing like the App Store existed before, and it has fundamentally changed the world,” said CEO Tim Cook.

If we look at the evolution of media consumption over the years, we’re certainly in the smart era: smartphones, smart wearables, smart televisions – all have revolutionized the way we interact with content. And arguably fundamental to each of these technologies, are the content platforms they operate from.

It comes as no surprise therefore, that the launch of the latest Samsung Gear VR has been surrounded by a number of further content platforms springing up. Samsung’s own Milk VR store is just one of several platforms available at its launch; the popular video streaming service Hulu being the latest to join the likes of Netflix and Twitch on the Android platform.

In addition to content stores, one of the most exciting areas surrounding the launch has been the new optimized VR web browser, unique to the Gear VR. With 360-degree content, providers are now able to upload their content to Google’s YouTube and play live in Facebook’s newsfeed. Samsung’s latest move has further strengthened the Gear VR’s ecosystem, and positioned the firm as a pioneer in the mobile VR industry.

Virtual Reality 2016 and Beyond

2016 will see a number of brands launch their own VR products to rival Samsung Gear VR. But what Samsung has shown yet again, is their ability to build on what they’re good at; taking their flagship Galaxy smartphone series and expanding the universe in which they operate. To quote their latest video advertisement,  “Your Galaxy truly got bigger.” The technical evolution of these smartphones will continue, shifting to content creation, developing experiences that truly push the boundaries from the ordinary, to the out of this world.

What does virtual reality success hinge on for 2016? There are three key areas brands should focus on when pursuing the new realms of virtual reality:

  1. Pure simplicity

When everything is boiled down, consumers still want a product that simply (a) looks great, and (b) behaves as it should. Comfort, design, and quality of the physical device all factor, and their importance should not be underestimated.

  1. Compelling, personal and shareable content

As we discussed earlier, VR content itself must hit the mark. Users require quick and easy access to discover, view and share content with others. Content creators need to offer experiences that aren’t purely an extension of their smartphone or film experience. They need to provide access to truly revolutionary and immersive experiences that consumers have yet to witness anywhere else.

  1. Collaboration

What both Samsung and Oculus have done well is to open the VR window to a whole realm of content providers, making the technology openly available to those outside of their own respective worlds. Even Apple, probably the most notoriously introverted firms around, had to open their App Store to developers outside of their company in order to realize success; and the same applies to VR.

There is no question, this is an exciting time with the evolution of mobile and virtual reality. Evolving virtual applications open up new doors for content and present limitless ways to engage consumers in new ways. Hello, the future is here and it’s sure to be an exciting ride.

Watch the latest Samsung Gear VR launch video, produced by Harte Hanks, with content from Imangi Studio’s Temple Run, CPP Games’ Gunjack, Ustwo’s Land’s End, Aldin Dynamics’ Twisted Realms, Felix & Paul Studio’s Jurassic World, Samsung Australia’s Shark Diving in the Dessert, the New York Times Magazine’s Walking in New York by Vrse, and Mountain Dew’s Dew 360 Snow Experience.

Black Friday vs. Every Friday

iStock_000053625904_Full_MonotoneBlack Friday. The retail holiday that drives consumers by the masses into the retail marketplace for door-busting deals. It’s also the day that traditionally marked the first day of moving from “red” losses to “black” year-to-date profits for many retailers. It’s no surprise retailers put extra time, resources and effort preparing for this big day, but as retailers look to connect with their customers more frequently, is it surprising the day after Thanksgiving remains such a powerful customer engagement point?

“Black Fridays have become a cultural phenomenon, a bit of a marathon for many people”, says Kelli Hollinger, Director of the Center of Retailing Studies at Mays Business School, Texas A&M. “But things are changing. For example, prices are now guaranteed online so that the in-store price matches what is offered online. This gives consumers more choice and control over how and when to buy.”

“Consumer shopping behavior is shifting toward finding deals year-round, so the traditional ‘big sale’ days are somewhat less important,” says Steven Kirn, Ph.D. of the David F. Miller Retailing and Education and Research Center at the University of Florida. “Perhaps it started with ‘Cyber Monday,’ and then ‘Small Business Saturday,’ but it appears to be a larger trend to spread holiday sales over a longer period, which makes a lot more business sense.”

Despite the extension of holiday sales and desire to get the best deals everyday, Black Friday still generates a lot of buzz and excitement. It’s also one of the biggest days for retail operations such as inventory flow, staffing, security and logistics.

“At Harte Hanks we help our retail customers connect with their customers every day,” says Kevin Berthiaume, Logistics Lead for Harte Hanks. “But in preparation for Black Friday, success is about scale and execution. To date, our logistics team helped Kohl’s deliver 100s of millions of inserts. More than 10 million of those inserts needed to arrive timely in preparation for Black Friday. We understand the importance of delivering on that kind of volume any time of year, and the significant impact it has on our customer’s business.”

“Consumers are increasingly geared to shop for deals year-round,” Says Kirn. “They wait for sales and then buy. They generally think opening prices are set high so that the retailer does not lose money when they finally put items on sale. There is a difference between consumer attitudes and behaviors. Consumers will say they want everyday low prices, but their actual behavior is to prefer to wait for sales. JC Penney ran into this problem. They marked their prices down 40 percent, but sales dropped. Consumers interpreted the low prices as a sign of low quality. They wanted to buy when items were on sale and did not trust everyday low prices from JC Penney.”

In a recent conversation with Steven Kirn Ph.D., he shared some interesting shifts in consumer perception reflected in a survey released this week:

“Just a few years ago, shoppers said that 25 percent off was a ‘good deal’ and enough to influence them to buy. A new survey released this week suggests it is necessary to discount up to 60 percent to be considered a good deal.”

This increase is deal seeking further emphasizes the need to establish valued relationships with your customers in order to take them beyond price points to valuing the experience with the brand.

Ken Bernhardt, is the chairman of the Harte Hanks Marketing Advisory Board and Regents Professor Emeritus at Georgia State University’s Robinson College of Business. As Ken sees it, the rise of digital shopping together with increasing consumer procrastination have resulted in the Saturday before Christmas replacing Black Friday as the busiest shopping day of the year. Black Friday, however, remains important as the traditional start of the holiday shopping season and still represents more than $50 billion in retail sales.

“At Harte Hanks, we know every day is an opportunity to help our clients connect with their customers,” says Frank Grillo, CMO, Harte Hanks. “Black Friday will always be an important day for retailers, but so is every other day of the year. Customer expectations are increasing with proliferation of mobile, social and access to channels of communication. Sending out deals isn’t enough anymore. Now more than ever it’s important to engage customers in a memorable, meaningful experience at every opportunity.”

Savvy consumers are aware retailers gather information and preferences so it’s a real miss when a retailer fails to engage in relevant customer interactions. According to a recent study by Magnetic, 50 percent of consumers say they regularly see email with irrelevant information and only half of all retailers report they know what messages resonate with their customers.

From an operational perspective, the 2015 holiday season is a done deal. But data and research can be a North Star for your brand moving forward. It’s the perfect time to get your 2016 game plan together to take customer engagement to a new level, each and every day, including Black Friday.

Taking Your Customers from Anonymous to Known: Introducing Total Customer Discovery

A Deeper Dive into the Solution

TCD-1

Today, we are excited to announce our newest solution to enable smarter customer interactions: Total Customer Discovery. You can learn more about the details through our press release, video and digital guide. In this blog post, I’m going to break down some of the technology components that went into creating it.

In a nutshell, Total Customer Discovery provides a holistic, 360-degree profile of customers, merging data from online and offline channels and across devices. This single customer view encompasses data across demographics (contact data, social profiles); psychographics (interests), historical (purchase and promotion history) and influencing power (networks, connections). With this richer customer view, marketers can deliver enhanced and personalized customer experiences, leading to increased acquisition, retention and, ultimately, ROI.

So without further ado, here are the different components of the Total Customer Discovery Solution and what they help address:

Solution Component: Cross Screen Identification

With cross-screen identification, each customer has a persistent, unique ID that carries with them, helping marketers track associated devices with that customer even when customers delete their browsing history (and their cookies). With Total Customer Discovery, we can identify and track customers across various devices (mobile phones, tablets, computers, laptops and so on), learning their behaviors, adding to their customer profiles and offering a seamless brand experiences across touch points that takes into consideration their past purchase history and preferences.

Solution Component: Cross Journey Mapping

To solve the problem of internal silos and overwhelming amounts of data, the cross journey mapping function captures customer’s digital behavior and stores meaningful attributes, such as click, searches, interests, preference, etc. to produce richer, more multi-dimensional customer profiles. These attributes can then be linked with other data sources within an organization such as a Customer Relationship Management (CRM) database. Total Customer Discovery identifies customer interactions across multiple devices and channels, so that we can track a customer throughout their entire journey, from smartphone, to tablet, to computer, to in-store.

Solution Component: Data Onboarding

A single view of customers provides a comprehensive view of the purchase journey. Integrating both online and offline data helps round out the single view of customer for a comprehensive picture of customer behavior for better retargeting and personalization. With data onboarding, online and offline data are merged and customer files are created using email or physical address lists that are matched with a database of advertiser tracking parameters. Particularly for brick-and-mortar stores, integrating online and offline data sources is crucial for delivering relevant content across channels based on the customer identification, from digital interactions on their smartphone to offline purchases at a retail store.

Solution Component: Social Linkage

Personalized, relevant content is the key to driving ROI in today’s world of real-time “micro-moments.” With social linkage, customers’ social interactions and behaviors are tracked across sites to enable deeper customer segmentation. Social linkage takes data from over 150 social sites, including Facebook, LinkedIn, Pinterest, Twitter and Google+, and gives marketers insightful social profile data to inform their social investment decisions and make their digital marketing efforts more effective.

We’d love to tell you more about how Total Customer Discovery takes customers from anonymous to known. For more information, you can visit hartehanks.com/TCD or email TCD@hartehanks.com.

The ABCs of Identifying Your Best-Selling Products

Bestseller red vintage stamp isolated on white backgroundThroughout my years of primary and secondary education, I often heard comments about how a fellow student “screwed up the curve by getting a high grade on the test.”  Ten years after graduation, I’m finding that the concept of weighted distribution is still practical and relevant.

We’ve all seen “New and Best Selling” as a sort option from a favorite retailer. Did you know that weighted distribution enables a company to determine those results?

Now I am going to throw you a math problem, but don’t let it scare you!  I’ll break everything down into simple addition and multiplication. Take a look at your previous 9 months of sales records, and then separate them out by time periods:

  • Time Period 1: Count orders by product in the past 3 months
  • Time Period 2: Count orders by product for previous quarter (3-6 months ago)
  • Time Period 3: Count orders by product for quarter before (6-9 months ago)

Time Period 1 will be most important because it represents your most recent sales.  Time Periods 2 and 3 carry less importance because they are no longer as relevant – perhaps they include an older version of a product that has been discontinued or replaced by a newer style.

Our next step is to apply a weight to each time period.

  • Weighted Time Period 1: Multiply all the totals in Period 1 by 50%
  • Weighted Time Period 2: Multiple all the totals in Period 2 by 35%
  • Weighted Time Period 3: Multiply all the totals in Period 3 by 15%

Add all weighted time periods and sort by the largest weight first.

As a last step, separate the results into 3 categories:

  • Top (AProducts)
  • Middle (BProducts)
  • Low (CProducts)

Based on this weighted model, you now have insight into which products are your “New and Best Selling products,” where you should put your marketing dollars, and how to better manage your inventory.

I’ll give an example of a time that we used this ABC product/inventory report for a client. A technology client of ours markets their sample products to engineering companies and researchers in order to get their products in prototypes. As such, they give out thousands of samples a week through a site that Harte Hanks created and now manages and enhances (I am actually a software engineer on that project).

The client requested that we evaluate how to obtain more organic search traffic by applying search engine optimization to the site.  Based on Internet research, I created a list of tasks to accomplish SEO, and one of the top is to create an XML site map that allows web crawlers to easily identify all products.

The web crawlers/spiders have sophisticated algorithms designed to filter out pages where content appears duplicated.  Since my client’s products are in many cases very similar, there are many similar models being filtered and never showing up when searched on google.com. Just yesterday, we had no hits from yahoo.com and one from bing.com.  Products that are searchable at google.com are often not popular items.

I applied the ABC report to the product list to help populate priority in the XML site map as defined by this spec so that web crawlers would give higher priority to my client’s top shipping products and make them searchable.  By applying ABC, we realized that out of the 33,000 available products on the website, 600 products represented 1/3 of sales, so we prioritized those. The code release is happening now, and we expect to see SEO impact shortly.

The ABC product/inventory report has many uses in business, such as making sure customers can easily navigate to “New and Best Selling” products, marketing hot selling items, supply chain management and inventory management to account for hot selling items, and the management of seasonal sales changes.  Just like in school, a curve (and weighted distribution) can be a business’ best friend.

How to Sell More this Holiday Season through Smarter Customer Interactions

sell more holiday marketingThe dog days of summer are quickly winding down. Back to school season is in full force, which can only mean one thing: it’s time for marketers to shift gears towards the upcoming holiday season.

Consider this: most retailers get about 20 percent of their annual sales during a typical holiday season (November through end of December). This presents an enormous opportunity to execute on holiday marketing campaigns that are highly targeted, relevant, and personal, and that can drive strong ROI and sales for your brand.

Use Trends to Your Advantage

I am sure holiday plans are nearing lock down; however, there are several “low-hanging” opportunities that every retailer should be considering. We have some recommendations to help you develop and execute these tactics quickly to drive as many sales as possible during this critical selling season.

But first, we can learn quite a bit from looking at some key retail trends from last year and statistics for the first half of 2015:

  1. According to the ShopperTrak, foot traffic continues to decline year-over-year for retailers. What does this mean for marketers? To no one’s surprise, more and more consumers are purchasing their holiday gifts online or through mobile applications.
  2. Additionally, Deloitte Research says that digital interactions are expected to influence 64 cents of every dollar spent in retail stores by the end of 2015. The ability of time-starved consumers to digitally research their holiday shopping and continue this digital research even in the store with their mobile device has changed the time spent shopping, the number of stores visited, and the knowledge consumers have in the store when they are engaging with store personnel. This means retail marketers need to evaluate all of their digital communications leading up to the important holiday shopping season and align important promotional and merchandise content with store associates.
  3. Lastly, consumers are demanding highly personalized and relevant messaging delivered to them whenever and wherever they need it.

Although sales were sluggish in the first half of 2015, the National Retail Federation (NRF) is predicting overall retail sales to grow at a more positive pace of 3.7 percent over the next five months.

Marketers need to be ready to strike while the iron is hot.

Here’s how to get your fair share of sales:

  • Remember that consumers are still looking for a deal no matter where they shop. Lower the purchase hurdle or remove online shipping fees as much as possible. Consider free shipping offers for your most loyal customers throughout the season, or introduce time-sensitive “flash sales” to create a sense of urgency, competition, and the “hunt for the deal” triumph that consumers love. If you have a loyalty program or credit card program, consider extra perks from November to December – double points, double rebates, etc.  These are your most valuable consumers and worth the investment.
  • Use mobile to help consumers locate and purchase what they want. According to Google, 82 percent of consumers consult their mobile device while in a store deciding what to buy. Be sure your website is optimized for mobile and offers your customers the same price and deals across all buying channels. There are many new services and capabilities, including those from our digital agency, 3Q Digital, that can help refine mobile marketing, mobile performance buying, optimization, app, and user acquisition strategies. Remember, too, that many consumers do research on mobile but complete the ultimate purchase on desktop (where the form fills are easier to complete). Mobile design needs to take into account the mentality of the mobile user (for more on how to reflect that, check out 3Q’s free whitepaper).
  • Review your search plan. For example, 3Q, whose clients include SurveyMonkey, Fitbit, and Eventbrite, conducts digital audits of search engine marketing to enable campaign management where the goal is to have 100 percent control of queries through the use of exact match, single-keyword ad groups, broad and broad modified match, and exact match negatives for mapping.
  • Leverage offline first-party data. First-party offline data represents a major opportunity for efficiently targeting and running online campaigns by opening the door to better retargeting as well as search, display, social, and look-a-like modeling. Data can enable improved conversions and personalization, and can help with programmatic display, landing page optimization, and engagement testing as well as inform an overall attribution plan for the holidays to optimize sales and insights.
  • Geo-targeting is all the rage. Proximal marketing is booming right now because it delivers messaging at the right place and times—when a consumer is physically close or inside a retail store. When implemented correctly, this can be one of the biggest sales drivers for the holiday season because it capitalizes on getting consumers who are near your store to go into your store.
  • Maximize your Facebook strategies as consumers spend more time on Facebook during the holidays. Note that Facebook is constantly updating its advertising features, targeting capabilities, and ad types – not to mention its News Feed algorithm – so make sure your creative, promotions, ad copy, and bidding strategies are tailored specifically for each audience.
  • Communicate via email throughout the holiday and do it often. Email is still one of the most powerful and cost-efficient marketing tools at our disposal. Use email at key days and times, including critical dates like Thanksgiving, Black Friday, Cyber Monday, and then conduct follow up campaigns one to two times per week during the remainder of the holiday season. Also, work with your team to give customers multi-channel offers. And don’t forget about January- give them ideas on ways to spend the gift cards they received!
  • Use timing trends to your advantage. Remember that Sunday and Monday of Thanksgiving week are amongst the top 10 shopping days of the year and offer some of the lowest prices of the season. Consumers are getting smarter about shopping early in the Black Friday week, so be sure to use strong email subject lines those days. Consider adding “deals of the day” for email and social channels – in fact, many retailers do a “deal of the day” for the 12 days of Christmas.

Your Pre-Holiday Checklist

Here’s a holiday checklist that can get your marketing into top shape for the holiday shopping season:

  • Optimize your search plan to ensure customers find your stores and website
  • Utilize offers like free shipping and flash sales to get your fair share of online sales
  • Use email throughout holiday to drive all sales channels
  • Consider developing an SMS strategy to create opt into holiday deals of the day
  • Use multi-channel offers customers want deals to use across all shopping channels
  • Evaluate your target audience and frequency strategy on email and direct mail to ensure reach and frequency at key times
  • Facebook is a channel that many of your customers will visit and interact with this holiday season, so make sure your strategy there is effective.
  • Have a strong measurement  plan that helps ID attribution so you know at the end of the season what tactics worked best
  • Lastly, don’t forget the stores!  Use all the above tools to drive both in store and online sales

With the right strategy, you can effectively compete and win this holiday shopping season. Be sure to capitalize on the trends, understand your consumer/customer base, and find a partner that can help you be smarter in the way you interact.

Harte Hanks and 3Q to Do Something Memorable In Retail

Ygrmaou may have heard by now that Harte Hanks has acquired 3Q Digital, one of the most widely respected, independent agencies in digital marketing.

What a win for our clients.

The Perfect Complement

3Q Digital specializes in digital paid media with extensive experience in paid search, paid social, mobile and display. Now that 3Q is joining our team, our clients will benefit from the digital expertise and experience 3Q Digital has in serving some of their premiere clients (which include the likes of Facebook, Symantec and SurveyMonkey)—in addition to our traditional marketing capabilities and software solutions via Trillium Software.

Our CEO Robert Philpott, explains the advantage that comes with connecting our services: “The most critical points in a customer journey are the moments when an individual interacts with one of our client’s brands. Harte Hanks believes the relevance and connectivity of these interactions are fundamental to driving marketing performance. 3Q Digital strengthens our capabilities and expertise to effectively manage these interactions in the paid digital world.”

Better Interactions for a Better Customer Experience

Managing these customer interactions is the basis for crafting a better overall customer experience. Connected and intelligent interactions in a customer experience start with the use of connecting data and putting it to intelligent use. We have a rich history of connecting the underlying data in disparate channels like direct mail, email, contact center etc. to drive relevance. 3Q Digital has established the same reputation in digital performance marketing. 3Q Digital shares the Harte Hanks philosophy, evidenced by their ongoing efforts to connect channels and improve decisioning across paid digital media including SEM, display, mobile and social.

The combination of 3Q Digital and Harte Hanks enables us to cover many of the essential interactions that make up the TOTAL customer experience. Together we will deliver the most connected customer experience possible, defining interaction led marketing.

Retail and Consumer Expertise

Probably most compelling to our retail clients is the retail and consumer expertise 3Q adds to our offering. 3Q boasts clients like Warby Parker, ModCloth, BaubleBar, Wine.com, Keen and more. In addition, they’ve published papers like:

Use Google Analytics to Attract and Retain Customers
Improve Mobile eCommerce with Lead Gen Tactics

(You can download both of these papers here.)

Be On the Lookout as We Do Something Memorable

We’re psyched to move forward with 3Q, combining our expertise for the benefit of our clients. In our case, the whole really is greater than the sum of the parts. Expect to see big, memorable things in the future—including big things in retail.

Uplift Modeling: Not So Scary After All (Case Study)

I’m not terrible with numbers. I’d even go so far to say that I’m data-driven in my marketing. But terms like incremental modeling and uplift modeling still sounded a little intimidating when I was assigned to create some marketing materials on this analytics solution. But I put on my big girl pants and got the run-down from one of our analytics experts.

WOW. I suggest you put aside any anxiety you may have with the scary-to-some concept of modeling for a few minutes because this is some impressive stuff.

What is Uplift Modeling?

Actual results from uplift modeling incremental modelingYou can check out this infographic for a great overview on what uplift modeling (aka incremental modeling) is and how it works, but simply put, uplift modeling does more than identify likely purchasers; it also weeds out those consumers who don’t need a promotion from you to make a purchase. This lets you save big marketing dollars by focusing on the group of consumers who need that extra nudge (aka your marketing) to make a purchase.

See It in Action

One of our clients, a leading specialty retailer, was disappointed with the results of their marketing campaigns. Even during major seasonal events, their direct mail promotions were not generating the expected incremental sales. With high costs associated with direct mail, each poorly targeted customer was making a big dent in the bottom line.

How to Fix It: The Game Plan

To optimize the use of this client’s marketing and direct mail dollars, we took a three-step approach:

  1. Perform an exploratory analysis of hundreds of variables to uncover key purchase drivers that could predict incremental spending.
  2. Build an incremental model to establish the existence of  persuadable customers–those who would only shop if provided a call to action from the retailer.
  3. Improve the effectiveness and efficiency of marketing campaigns by focusing outreach efforts only on the persuadables.

This client’s exploratory data analysis uncovered several data points that could predict incremental spend, including:

  • Number of visits the target made to the store
  • Spending in specific departments
  • Number of months from the target’s first purchase

Big Results

  • The incremental model accurately isolated the top 10% of the retailer’s most persuadable customers.
  • By targeting only this top 10% through direct mail, the retailer could experience an uplift of almost 12% and ROI of 287%.

Learn More

That’s not so scary, right? It’s not too shabby either! If you want to learn more about uplift modeling, check out our infographic or drop us a line.

3 Trends Occupying Retail CMOs in 2015

Happy New Year! 2015 is upon us–what will the coming year have in store (no pun intended)? Here are three retail marketing trends we predict will occupy many CMOs’ attention for the months ahead and how they may impact marketing strategies.

1. Silos vs. a Connected Customer Experience

Many CMOs will still struggle with internal structure/silos, skill gaps and cumbersome legacy technology/tools that prevent them from more aggressively focusing on the customer experience. For example, retailers are investing in mobile, omnichannel and eCommerce, but many CMOs/CEOs/CIOs manage these efforts in a disjointed manner—they are not connecting the consumer journey and experience across all devices and channels in a context and timing that best serves the consumer and brand in unison.

This is especially true for mobile: only 10% of CMOs feel they are very effective at understanding their customers’ channel preferences, and only 12% believe they are very effective at assessing customer satisfaction with their existing mobile engagements. The most telling finding regarding the state of mobile is that marketers admit they are likely out of sync with their customers but are challenged to find the path to alignment.

Retailers who continue to operate in silos do so at their own risk. This illustration shows the ongoing impact on earnings and return on invested capital of online migration:

2015 predictions 1 We are, however, seeing multiple RFPs from retailers that are trying to address these issues, and there are big retailers already making great headway. The investments of Wal-Mart, Target and Macy’s in omnichannel and mobile are widely written about.

If you haven’t started down this path yet, it will be important to develop a plan to be more customer-centric in your strategies, execution, media mix and attribution of results next year. The additional revenue that could be gained if tight cross-channel integration and unified commerce were in place today for a billion-dollar retailer would amount to about $100 million.

2. Customer-Level Relevance vs. “Merchant Knows Best” Mindset

In addition to issues with structure, technology, and talent, many CMOs also face another challenge to one-to-one contextual relevance using dynamic content: their internal culture. Many merchants believe they know best what the consumer should buy. They want their content to be shown to all of their targets on their timeline. Many storewide events are still one-size-fits-all. For many consumers, this results in an ineffective experience that is not contextually relevant, and the approach squanders the limited opportunity you have to truly connect with your customer.

Retail Touch Points reports that 86% of consumers recently said personalization has at least some impact on their purchasing decisions. Forrester reiterates the value of contextual marketing:

Marketing’s job now is to identify and use context to create a repeatable cycle of interactions, drive deeper engagement, and learn more about the customer in the process. The more you can internalize and act upon what you learn, the easier it is to make future interactions that much more engaging.

Let’s be honest here…are you stuck in the “Merchant Knows Best” mindset? If so, it will be important to tackle a plan or create a pilot for greater relevance and one-to-one marketing early in 2015.

3. Pressure on Brick and Mortar.

The on-going systemic reduction in store/mall traffic will continue, as consumers have less time for shopping and instead use mobile and the web to browse.  Shopper Trak has reported that unique consumer visits have remained flat for several years, while the number of stores shopped per mall visit has fallen from 5 to 3—leading to billions fewer footsteps.

2015 predictions 2

This trend in fewer footsteps is requiring that brick and mortar stores have much higher in-store conversion rates and average purchase rates to grow same store sales.

As the Deloitte 2014 digital study projected, 50% of in store purchases are influenced by consumers being online before and/or during the purchase. It is therefore necessary to better connect the unknown shopper browsing digitally to the shopper that comes into the store (a continuous or unified profile). This allows the retailer to improve the customer experience and supply chain efficiencies by enabling streamlined dialogues across channels to enhance customer experience and track conversions. Unified profiles help you to use trigger, one-to-one, real-time, contextually relevant messaging through quick content personalization—which gets open rates at 74.9% higher than other non-relevant, unpersonalized emails.

2015 predictions 3

For many retailers, a large portion of interactions are ‘anonymous’ and are not tracked, which hurts customer relationships. You can begin tracking these interactions and turning online visitors from anonymous to known with progressive profiling. Progressive profiling helps you to build a continuous profile of all unknown and known prospects and customers across all channels, devices and touch points over time. The consolidated view of customers created by progressive profiling enables you to provide a unified online/offline experience—contributing to a seamless journey and a contextual experience flow. If you haven’t implemented progressive profiling yet, you should get started in early 2015.

Need Some More Convincing?

These three trends will occupy many CMOs this coming year, but if you need data to help encourage your senior teams to consider these trends, check out these statistics. According to a recent SAP survey, 86% of those that have invested in a personally relevant, omnichannel approach to marketing driven by unified profiles agree that the benefits to consumer sales clearly outweigh the challenges of implementing the programs. In addition, most companies say their organizations’ efforts:

  • Increased sales (74%)
  • Increased consumer loyalty/acquisition (64%)
  • Improved competitive advantage (62%)
  • Improved customer experience (57%)

Best wishes for successful marketing in 2015!

How to Eat the Elephant that is 1:1, Personalized Marketing

Receiving personalized marketingI’m sure you’re familiar with the saying, “To eat an elephant, take one bite at a time.” True 1-to-1, personalized marketing can certainly feel like eating an elephant.

Sure, many marketers are doing some level of personalization, especially with email, but that is only one piece of a much bigger picture (or should I say elephant). Including a few personal details, such as name and a reference to the last item purchased, in an email is personalized marketing, but it’s not what the experts are espousing as the Holy Grail. To get to the Holy Grail, you have to eat the elephant…all of it.

Don’t take all of the bites yourself.

Consuming the pachyderm is a lot easier than you might think. If you’re taking one bite at a time, you’re doing it wrong. You need to share bites with all of your marketing teammates. Teamwork, combined with the right amount of insight, is the combination needed to eat that marketing elephant. But what does your team need to execute on your marketing vision of 1-to-1 communication? There are several key components that your team should master: data, analytics, strategy, planning, execution and oversight. You likely have all of these components in place, but making sure they are optimized to truly achieve personal, relevant communication with your customers is your key to getting closer to the Holy Grail. Here’s a quick review of those key components and some things to make sure you thinking about.

Data

You can’t be personal without the right data. Most marketers have access to some data, but, do you have all the data you need readily available in one place? To get a better understanding of where you stand, ask yourself the following questions:

  • Are you able to track online behavior as it relates to your brand?
  • Do you know their social sites they frequent and their handles?
  • Do you know which products/services you offer are of interest to them even if they haven’t purchased?
  • Do you know how they prefer to be communicated to, when, and how much?
  • Is all of the information linked together at the customer level?

Analytics

To act on all of that good data, you need an analytics strategy to uncover where the opportunities lie within your customer base to market at a personal level. It’s more than just segmenting your customers. It’s about:

  • Understanding how your testing strategy will be measured to gain true insight.
  • Creating profiles and personas that can be marketed to in personalized ways.
  • Assessing your marketing efforts on the overall bottom line.
  • Identifying high value opportunities that may not seem obvious, such as complementary offerings that will drive desired purchase behavior.

Strategy

Once you know who your customers are, it’s important to know how to speak to them in ways that they are most likely to respond to.

  • Is your message consistent across channels?
  • What customer behaviors do you want to drive with your communications?
  • How are your communications supporting your program’s business goals?
  • Are you delivering monologues or starting conversations?
  • Are you speaking to them as individuals?

Planning

Planning is about knowing when, how often, and where you are speaking to your customers. Your communication planning should align with your messaging strategy and be delivered in a consistent and thoughtful manner. It’s tough to get that alignment and consistency if you don’t plan it all out in advance.

Execution

Each channel in which you speak to your customers should be represented. New digital and mobile channels are hot and offer great opportunities to take personalization to the next level, but don’t ignore your traditional outlets.

Oversight

You probably have a large customer base with varying needs and interests. As consumer expectations evolve, you need a strong leader in place to make sure the team is keeping pace with the changes and that you are working towards the right goals. It also takes a knowledge of how each function of the team interacts and impacts the others. Otherwise, you may quickly find yourself alone in the woods with the elephant staring directly at you.

The Final Course

Being relevant to your customers with personalized communications isn’t easy. But the right combination of insight, teamwork, and an optimized strategy will bring you closer to eating the marketing personalization elephant…all of it. Bon appetite!

Holiday Marketing: 5 Strategies to Win 2014

5 strategies for holiday marketingYour stores are stocked (and so are your competitors’). You’re rearing to go, and the cautious consumer looks to be rearing to go this year, too. Will the 2014 holidays deliver on your expectations? Not unless you compete for it!

The reports are in, and they’re (mostly) saying that holiday spending will be up this year. The International Council of Shopping Centers (ICSC) says it expects holiday spending to gain 4% this year to $488.6 billion at Shopping Centers, in line with previous forecasts from the National Retail Federation and Deloitte. And Shop.org predicts that online spending will increase between 8-10% to as much as $105 billion.

Yowza!

That’s a lot of opportunity for the retail industry, but unfortunately, it comes at the expense of brick and mortar sales. Traffic to physical stores continues to head downward over 2013 between 6-11% over last 3 months. According to ShopperTrak, total retail foot traffic for November and December has fallen for 4 consecutive years (down 14.6% last year), which is a loss of billions of footsteps.

The point is this: if you want to be a top contender for traffic this year, you need to get your holiday marketing act in gear, using both online and offline tactics together for smarter campaigns and more relevance.

5 Strategies to Win Holiday 2014

With all of this shopping data in mind, we’ve prioritized five holiday marketing strategies that will help you get the most out of the upcoming shopping season.

1. Get Lots of Email Addresses. Now.

Retailers are working feverishly to get customers opted in to their email programs. You should be, too. After all, your email won’t have much effect if you have no one to send it to. Actively market your email list NOW and throughout the holiday season. There is a huge range of tactics at your disposable, including things like point-of-sale email capture, refer-a-friend emails, social contests, etc. Here are some tips:

  • Make your email signup offer unavoidable. Display it prominently, such as with a strategic lightbox.
  • Offer contests to shoppers and collect contest data.
  • Offer e-receipts.
  • Promise future personalization through email content.
lightbox
Make your offer stand out with a lightbox.

2. Drive Traffic

Promote Foot Traffic Through Digital Channels

This might seem like an obvious one, but you should make sure that all of your marketing channels are directing traffic to ALL of your purchase channels. Why? Because that’s how customers shop now: 18% of consumers who holiday shop use online/mobile coupons for in-store purchases, and 14% are comparing prices on their phone while in store. Online and offline channels have converged, and you should take advantage of it. Tips:

  • Use your social channels to drive foot traffic. Your social communications can help shoppers determine where to shop, provide shopping ideas and inspiration, allow you to offer deals of the day, etc.
  • Promote your multichannel value adds like ship to store, providing store level inventory, and allowing customers to reserve and pick up in store (especially same day pickup). These features drive foot traffic to the store for possible incremental value.

Other Best Practices for Driving Traffic

  • Use purchase and behavior data to drive relevant and heavily targeted offers that better than offered store and site wide. For example, if the general offer is 20% off sale items, use data to see who’s browsing but hasn’t purchased. Send these individuals a 40% off offer to drive the traffic and sale.
  • Promote Friends and Family events with limited-time promotions or an offer for you and one for a friend.
  • Buy Now & Buy Later offers continue to be successful across retail categories, often in apparel.

3. Re-engage the “Lost Customers”

Win-back strategies can help you regain customers, as long as you know how to play the game. Here’s how to get it done:

  1. Isolate those that are not engaging with you based on your own criteria (no opens? no clicks? no purchase?).
  2. De-dupe against the customer’s activities. Is she buying online but not in store? Or vice versa? Don’t rely entirely on your email file to tell the story.
  3. Divide unengaged customers into activity categories that make sense for your buying cycles (e.g. over one year unengaged, less than three months, etc.). Stick with this decision! See graphic for an example. 
  4. Develop content and messaging for each category of customers.

Engage lost customers to win holiday 2014

Note: Emailing non-engaged customers is risky. You can easily be labeled as a spammer if you send to too many inactive email addresses or too many of your emails go unopened. Make sure to always remove email addresses on first hard bounce, and test your subject lines.

4. Tailor for Your Best Customers

Best customers are typically 60-80% of a retailers revenue, but even best customers are promiscuous shoppers during the holiday season. A good strategy for best customer loyalty is important to keep them close this time of year…and it’s probably not a typical loyalty program. Less than one third of customers are “much more likely” to shop stores where they earn points or rewards. Coupons are just too tantalizing for these shoppers to turn down. Here are some pointers:

  • Communicate throughout the holiday (October through January) and on key dates like Thanksgiving and Black Friday, Cyber Monday, post holiday, etc.
  • Don’t forget direct mail. Consumers want and expect to hear about holiday products and offers via traditional communications, including direct mail. Direct Marketing Association (DMA) has found that direct mail boasts a 4.4% response rate, compared to email’s average response rate of 0.12%.
  • Relevance is still key, for both direct mail and email. Avoid the urge to batch and blast–you customers will tune you out. Instead, talk to the right customers, at the right time, with the right message for a better customer experience.
  • Get a mobile app. Of the 70% of shoppers who used a mobile phone while in a retail store during the 2013 holidays, 62% accessed that store’s site or app. And Last year, comScore found that 21 percent of Black Friday online sales and 17 percent of Cyber Monday online sales came directly from mobile devices

5. Focus on Conversion

Consumers know you collect their data and expect you to personalize their shopping experience.  If you do it right across channels, 40% of shoppers will buy more from you. How to get it done:

  • Onsite personalization. Product cross-sell and up-sell are NOT personalization, especially during the holidays. Customers are likely shopping for more than one item for more than one person. With this in mind, you should alternate product recommendations according to the customer’s immediate needs–change them according to the most recent search, click or interaction, not just previous purchases.
  • Save best pricing for best items. We know that last holiday Amazon won the price war and often changed prices on key items up to 10x’s per day. Now Wal-Mart VOWS TO ‘WIN’ HOLIDAY. Saying: “we can’t let competition beat us on price. So it’s tough to compete with Amazon and Wal-Mart on price, so save your best best pricing for the items you are best known for and would likely drive the most traffic. In the Accenture study for this upcoming holiday 96% of consumers are still very focused on discounts and 29% say it will take 50% off or more to get them to buy!
  • Move from blasting to interactive campaigns. Leverage your email analytics for more engagement. For example, if a customer doesn’t open an email, it may not be the right message. Keep the content and try a different subject line. If the customer opens the email but doesn’t click through, then move onto the next product. Any blast and/or drip campaigns should be redesigned into interactive customer conversations.

Your Year to Win

Holiday sales will probably tough this year (but what’s new?). Retailers will have to fight for their “fair share.” Doug McMillon, CEO of Wal-Mart Stores Inc. has said, “In retail, you get what you deserve.” Use these strategies to make sure you come out on top of Holiday 2014 and get all that you deserve.

Retailers, 2015 Starts Now: Are You Ready with Personalized Marketing?

Before a snowflake has fallen or a holiday song played, retailers are already thinking post-holiday and 2015 planning. Top of mind for many retailers is the relevant, personalized marketing that consumers have come to expect from your campaign efforts and how to best incorporate these expectations into their 2015 plans.

This consumer demand for relevance-based information means more than personally addressing a direct mail piece or the subject line in an email. The message needs to be crafted and delivered based on information truly unique and in context to the consumer’s interests, preferences and behaviors. A majority of marketers struggle always or often to deliver personalized marketing at scale in one channel, let alone across channels.

Need for personalized marketing

 

Even with these struggles, everyone has seen the stats that show there are big benefits for getting one-to-one content right: higher open and click through rates on personalized emails, increased cart spend, double digit conversion rates…  But what does that mean for you? Are you seeing that same impact?

Consumers know.

Companies such as Amazon that do customized and personalized marketing well have spoiled everyone by building a model entirely around highly relevant communications and recommendations. There’s a consumer expectation that all companies will use the data they collect intelligently and not waste their time with irrelevant messages.

Personalizing requires relevance.

Personalizing without being relevant will not work. It’s delivering the right message at the right time to the right person. Let’s take a moment to get on the same page regarding personalization and customization.

  • Personalization is collecting implicit or explicit customer information to create a content delivery treatment map that not only prioritizes the information presented to customers but also how it will be presented.
  • Customization is when customer preferences, purchases and behaviors are mapped to information or products that match those interests. Over time, this one-to-few or-one-to one curated communication experience improves relevancy and engagement.

Where are you on the curve?

As we said, some retailers, like Amazon, are pretty far down the path of personalizing content and consumer experiences. Others are just getting started, while still others know they should be doing it, but aren’t sure where to begin.  Where are you on that curve and what are you planning to do about it in 2015?

If you’re just starting out, don’t feel too bad–most retailers are in the same spot. This gives you the perfect opportunity to get a leg up on your competition.

Getting off the ground

But just how do you get started? How do you get the support and resources you need? Begin with a business case. I suggest testing out relevance-based marketing with just a couple of key channels to start: email and direct mail. Do it well on a small scale, use your fabulous results to get the buy-in you need, then take it to the big leagues.

If you need some help on building your business case, check out this article: Dynamically Relevant Messaging for Retailers. It’s a primer for those of you that haven’t yet addressed personalization and want to get in the game. It will also give you some tips on how to engage your most valuable customers, improve response rates and build customer loyalty.

Get Personal. Get Relevant. Get Results.

Sounds better than most holiday songs, don’t you think?

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