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MAKETING
Entice | Engage | Enchant
Written by
Amith M D
Copywright @ 2017 by Pelatro
The results
Post implementing multiple sub-level strategies, Tesco changed its marketing strategies to a
customer-centric grocery unit. It is now one of the largest grocery chains in the world, with most
loyal followers. The Clubcard application form now has 16 million active members in United
Kingdom which encompasses hal the British households. It also enjoys an international fan
following of 12.5 million members. Tesco proved its mettle with efficient implentation of
precision marketing framework which involved three simple variables:
channel cost
response rate
incremental income
As we see with Tescos example, consumer responses are going to fade if the communication
matrix is similar across the crowd. Either the messaging piece is going to stay in the Spam folder
or be deleted without a second look. Dont expect increased click-rates or open-rates unless you
innovate your marketing strategy. Consider the sweet spot. According to Hubspots study,
Sixteen to thirty email campaigns a month suffice the objectives. Marketers that send 16 - 30
campaigns a month see a click rate more than 2X greater than the click rate of companies
that send 2 or fewer campaigns a month. At this frequency, companies enjoy a median open rate
of 32.4% and median click rate of 6.5%.
Mass marketing ROIs are fast becoming shallow as preferences differ from person to person.
B2B marketers need to step away from operational metrics and towards long-term metrics such
as total value of the customer from designed marketing activities. This paves the way for
Precision Marketing over a mass marketing framework.
Its time to dig deeper into consumer needs and promote relevant products and services to the
relevant audience at the relevant time. The key word here is relevance. Marketing metrics need to
express objectives and measurable business outcomes in the form of revenues and ROIs. The
pressure on marketers to demonstrate a return is intensifying.
Precision Marketing focuses on delivering the right message to the right target audience at the
right time. It emphasizes on relevance and in order to achieve this precision marketers solicit
personal preferences directly from recipients. They collect and analyse behavioural and
transactional data. The process starts from the consumer rather than the point of sale.
The technique dwells on personalized offers and deals, and magical marketing ploys, which
produce satisfied existing customers and negates the risk of losing new customers.
Todays top performing marketers have one thing in common to lay down customer-focused
strategies grounded in rigorous customer insight. When we dont buy irrelevant products, why
sell them?
Development of Precision Marketing
The development of the technique begins with accuracy and focus. The way to move forward in
the strategy is to draft a marketing plan with caution and comprehension. It coincides with the
development of market segmentation, technological advancements and consumer reactions all
the way to the proliferation of mass marketing.
Consider Best Western Hotels. This is the largest hotel chains in the entire world. They cater to
families and business travellers who use hotels frequently. The brand developed an industry
leading reward point system by teaming up with InfoPrint, which programs incentives for
customer loyalty. With successful introduction of travellers to the loyalty program, Best Western
strived forward to gow its membership.
The company had a wealth load of data about their customers, which they had acquired through
online initiatives. After analyzing the data, Best Western decided to use a direct mail marketing
campaign to connect with their existing customers. The goal was to make it easy for the
customers to understand the benefits of the system in order for them to earn more. The
statements presented information in a clear and comprehensive way that allowed customers to
maximize the benefits.
After an 8-week trial run, Best Western proved to be incredibly effective, leading to a 39%
increase in the number of stays and a 34% increase in the length of retention. Furthermore, the
brand enjoyed a 500% more customers signed up for the MasterCard after receiving the new
statement.
As seen in the above case study, the concept of market segmentation is the cornerstone of
precision marketing. The evolution of segmentation was supported by technological
advancements. The shift from traditional to digital enabled an easier capture of consumer data
carving ways for easier consumer insights. There were other factors driving market segmentation
like customer demand, customer expectations and fierce competition. The smaller the chunks in
segmentation, the larger are the chances of accurate marketing strategies.
This is the stage where precision marketing gains momentum. The power rests in the hands of
the consumers and a strategically-designed framework centered around the consumers can
provide large dividends for the marketers. While collecting customer data is the primary
objective of the marketer, there lie 3 key challenges to overcome,
Acquisition of accurate data
Action on data insights
Execution and measurement of acquired data
Whats critical to precision marketing is to gather actionable consumer insights, predict
consumer needs, and predict the propensity to purchase before carrying out a strategy based on
data collection. These techniques have been successfully implemented across sectors such as
banking, finance, telecommunications, insurance, and hospitality. The marketing approach has
paved widened scope for the clients in the areas of retention, ROI and revenue.
Lets take a closer look at precision marketing with a case study for substantiation;
When it comes to relevance, Amazon has mastered the art. From where you place your
cursor to where you pick up your order. The system remains well-structured. It knows
what you think about, look at, and what you wish for.
Conside this, havent we all clicked on the Wish List feature to save products for future
purchases? This enables Amazon to market their products and services according to
consumers specific needs. When you click on it, similar and relevant products appear on
the screen. Thats the reason we see Amazon advertising messages appear on social
media channels.
Capitalizing on its insights, Amazon has branched into other forms of online
merchandise. What is more striking is the way it has held prices in line with physical retail
outlets. It has offered customers a more personal and convenient shopping experience.
Now, thats a peek into effective precision marketing.
Still wondering about the results? Amazon celebrates a 30% annual growth. In the retail
arena, a mere 6% increase is predicted, which shows the shift in consumers purchasing
habits in favour of online buying rather than in-store purchases.
Amazon has set a benchmark in the area of marketing with relevance and accuracy. They
have near-perfected the art of capturing and mining customer data while leveraging these
insights to learn the consumer preferences and priorities of those they desire to engage.
Precision marketing: Why the buzz now?
Intensifying competition
When there is an economic slump, it is easy to sit back and play it safe on the strategy
front. Thats the moment you think of your competitors. Smart marketers dont sit still.
Many big market players like Amazon, Apple, and more implement revived business
strategies that leverage customer data, triggering intense competition for consumers
attention and cash flow. In recent years, there has been a significant growth in spending
for online marketing channels. This carves routes for companies to launch new
marketing programmes using social media, viral approaches, personalized emails, paid
search, behavioural targeting and other approaches to differentiate themselves from
rivals.
Adobe suggested customers should have an in-store experience while shopping online.
Consequently, web-based retailers are competing high-quality images with zoom, spin
and colour options that emulate the touch and feel experience while the video feature
simulates a live demonstration.
Advancing Technology
The worldwide market for Business Intelligence (BI) software is set to grow at 9.7%
annually. Big flag companies like IBM, Google, Microsoft and Oracle have invested
billions of dollars to acquire data-based technological capabilities.
According to The Economist, business intelligence was a luxury, which only big
companies enjoyed. With growing technology and the falling prices of software solutions,
companies are gathering more data than ever before.
Most importantly, precision marketing produces robust results with a 6-step process.
1. Lay out clear-cut objectives
Precision marketing is a journey and as in most cases, the technique starts with defining clear and
precise objectives.
They used data warehouses that contained call detail records and subscriber data.
Statisticians assisted marketers to produce insight-driven campaigns.
Sophisticated analytical tools were used to produce targeted offers and deals.
The customer lists shot up from 40 to 200, leaving their competitors awestruck.
Solutions provided by the marketing departments of telcos are taking a shift into new-age
marketing. Although precision marketing has proved to be successful with multiple big brands in
the telecommunications sector adapting to the technique, it is still in the growth phase.
Marketing takes a day to learn. Unfortunately it takes a lifetime to master. Philip Kotler
Preision Marketing is at a litmus testing phase. The millenial marketers strategies in comparson
with the traditional marketers are quite different from each other. The technique thrives on data
acquisition and data insights. Many of the strongest market performers lay down customer
centric strategies and derive optimum results for the organization. The ideas that hover around
the versatile technique are in development and open to marketers opinions.
Lets take a closer look at the channels of Precision Marketing;
Omnichannel:
Omni comes from the Latin word Omnis which means all or universal. A common phenomena,
isnt it? Omnichannel is about the true continuity of consumer experience. The key is that it
extends beyond a single brand. It isnt about segregation but about meeting the consumers
preferences holistically. That is the key to target marketing through omnichannel.
In marketing for telecom providers, being omniscient is to perceive and understand the needs of
the consumers from all angles without restriction. And the best way for a customer to perceive
everything is to allow them to own their data and experience the products and services first-
hand, then give them the ability to use it to guide creation and the context of future experiences.
Consider this, our life is continuous, but our customer experience is anything but that. We learn
and have memories of all the good and bad in life. We strive to limit or eliminate the negative
and increase the positive marketing impacts. These patterns that we strive to replicate are the
preferences of the consumers. The ability to have a continuous experience across brands, across
format and across devices that is completely bespoke is a promise, we as marketers need to
deliver consistently.
When telecom brands think customer experience, they need to think omni. Its not about your
customers or their customers, its about all of them. Its a compelling mix! The key here is
holistic understanding of consumer needs and developing marketing strategies centered around
insightful needs. Thats what omnichannel communication stands for.
Telecom brands in todays world are increasingly becoming aware of the idea that the days of
closed data and aggressive offers accompanied by loyalty points, are fast changing. With
precision marketing, if the brands want to start thinking of connecting with the target audience,
it better be through omnichannel, failing which, consumers will not have a continuous and
enhanced experience. The result? They leave!
There are a few key takeaways on the combination of precision marketing and omnichannel
distribution. Millennial marketers, come closer;
In order to explore and discover products and services in the domain, the data must be
transferable, collectable and universal
Customer-centric undertakings will trade data in exchange for significant access to other
data which will outweigh the value of the limited data in your brand
All experiences, offline and online, should allow an individual to identify themselves and
present a brand with the opportunity to access customer preferences
Multichannel marketing:
Multichannel marketing is the practice of interacting and connecting with customers using a
combination of indirect and direct communication channels, be it websites, retail stores, mail
order catalogs, direct mail, emails, mobile, etc and enabling customers to take action in response.
This is usually done preferably to buy your product or service using the consumers choice as a
means. In the most simplistic terms, multichannel marketing is all about choice.
You must be where your customers are. And they are everywhere, arent they? If you as a
marketer need another reason, consider this, multichannel customers spend three to four times
more than single-channel customers do on your message. A fact you can play around with when
its crunch time. Theres no doubt that customers today have much more control over the
buying process than marketers do with selling tactics. Thanks to the proliferation of available
channels, customers have more choices than ever when it comes to how they want to get
information. Today there are more ways to reach customers, both in terms of number and
variety of channels than we could have imagined not so long ago. And as the number of
channels continues to rise, which it will, the need to embrace multichannel marketing will not
only become a good idea, but a critical one.
The Financial Times (FT) wanted to drive a younger audience to engage with its
publication, and in partnership with Essence, it decided that a multichannel approach
was the answer.
Research found that the path to purchase for the FT was longer than that of less
expensive products, so a higher frequency of messages was the need of the hour.
These messages were delivered through a mix of channels, which included digital
outdoor displays and video pre-roll through tablet devices to target commuters, display
takeovers in offices and mobile video for the lunchtime audience.
The results:
However, just like any other marketing areas there are challenges to consider:
Targeted messaging With surplus communication channels and countless customer choices,
delivering the right message to the right audience isnt enough. Not only must your customers
receive your message, but they must be attentive, receptive and willing to act regardless of the
channel.
1. Create and maintain a single view of the customer across all channels
2. Establish a multichannel marketing platform
3. Create consistent customer experiences across all channels
For telcos, using precision marketing techniques allows a marketer to become customer-centric,
while bringing together aspects of customer lifecycle, experience and value. It helps them
understand the customer base better and thus, broaden the marketer-consumer relationship.
Precision marketing is poised to have a deep impact in helping telcos become highly customer-
centric. Pelatro, precision marketing service providers are a well-knit marketing unit mentioned in
Gartner.
With the idea of precision marketing, CSPs transformed their business model to adapt to their
customers requirements. The model is adjusted to the needs and expectations of the individual
customer, which is monitored regularly while taking value-added advantage of specific channels
where the customers respond. Operators now listen to every subscriber on every channel and
possess data-driven insights to deliver the right message, to the right person, at the right time via
the right channel. With precise information on the needs and behavior of each customer, the
relevance of these messages become fairly high. Remember the keyword, relevance.
Chapter 5 How Telcos can increase ARPU and decrease churn with Precision
marketing
Dont judge each day by the harvest you reap, but by the seeds you plant Robert Louis Stevenson
Precision Marketing & ARPU
With smarthphones gaining quick signnificance, ARPU includes not only the revenues billed to
the customer each month for usage, but also the revenue generated from incoming calls, payable
within the regulatory interconnection regime. Telecommunications is a fast-paced growing
industry with an expected global revenue of 1.2 Trillion Euros by 2019. With this statistic one
must surely consider the analytical study of precision marketing over traditional marketing
methodoloiges. Does the technique precision marketing increase ARPU?
As there is a shift from traditional to digital media and social media, these wings rely heavily on
ad revenue generated by users. While consumers are generating free accounts, pay close attention
to their ARPU. Variations in the average revenue reflect changes in the companies' ability to
generate results, which thereby have a negative impact on their stock price. This provides the
company a granular view at a per-user or unit basis level and allows it to track revenue sources
and growth, leveraging a positive turnaround. Also, they need to manage revenue growth by
maximizing value from existing customers rather than subscriber acquisition. The value of
retaining an existing customer is much more profitable than acquiring a new segment.
Telecommunications and Internet companies promotional activities center around ARPU.
Precision marketing applied to the telecommunication sector manifests in the form of value-
added services such as entertainment being sold to customers especially in markets where the
primary service offered to the customer, such as telephonic or Internet service, is sold at a
commodity rate. With the idea of precision marketing, CSPs transformed their business model to
adapt to their customers requirement. The model is adjusted to the needs and expectations of
each customer.
As smart marketers, you need to be aware of another criterion called Average Margin Per
User (AMPU), which measures the success of telephone companies. This system centers around
the attention to the margin produced per sold unit, and not the amount of cash (revenue) earned
from each customer. By carrying out such a system, one can afford low volumes and still have a
healthy company. High volumes can also bring a significant edge, but only until competition
forces prices down. With telecom analysts being highly focused on ARPU, precision marketing is
the need of the hour as it focuses primarily on consumer behavior and personal preferences.
Another resulting factor of precision marketing is lowered churn rate, which is directly related to
risk. With consumer relevant marketing strategies implemented in the right direction, risks can
be waved off with ease. Consider this, the customer has made a promise to continue using your
service, but there are a couple of risk factors to be considered. Firstly, the future is unpredictable
and secondly, not all customers will continue to use the product or service as promised. The first
step to tackle this challenge is to estimate the degree of risk involved followed by defining its
level to an acceptable degree. To reduce churn rate is to reduce the risk involved in the lay-down
of marketing strategies. This leaves no margin for uncertainty! Needless to say, more the
uncertainty, more the risk. In the telecommunication segment, the vital factor is to sell in units
rather than use the age-old mass marketing.
Heres a case study for substantiation;
A leading provider of unlimited wireless service has had a long standing relationship with Nielsen to better
understand, find and activate their customers. Utilizing Nielsen ConneXions, a syndicated segmentation system
based on technology behaviors, they were able to identify and engage their best customer segments for increased
effective marketing. The objective of the Telco company was to activate these same successful offline segments online
by finding new customers for its BringYour OwnDevice (BYOD) campaign, and increase their Return on
Ad Spend (ROAS).
The telco was able to use the same consumer segmentation, ConneXions, that they used successfully to market
offline, to find new customers using mobile advertising as well. Nielsen PRIZM Digital was used (with
ConneXions technology selects) to bring the offline segments online for better precision in finding their best
customers for the new mobile ad campaign.
The result was a success for the telco company with 11 M+ Impressions, 94% Decrease in CPM, 16X more
successful in marketing strategies over traditional marketing plans.
In order to execute a plan around the reduction of churn rate, marketers must be well aware of
the actionable factors that determine the fluctuations. Now it doesnt stop just there! The best
churn model will include these actionable factors as components of the precision marketing
model where consumers preferences are tracked, managed and implemented time and again. To
sum up, the best churn model is not the one with the best statistical precision but the one that
provides the best consumer insights to avoid further churn.
Marketing with precision requires practice and constant tracking of consumer behavior. In the
modern era of cutthroat competition, the consumers control your marketing strategies.
Understand the consumer needs first, track and measure their past behavior, predict their future
buying patterns and execute marketing communication collaterals with precision. As a marketer,
the opportunity to connect with consumers has never been this diverse.
Embrace the opportunity and strive towards the path of precision marketing. Remain relevant,
remain a cut above the rest. Remember, its a journey where you define your objectives with the
first step, gather data on the second, analyze and model on the third, strategize on the fourth,
deploy on the fifth, and finally measure on the sixth. There, you have hit the precision marketers
moment!