It's All About The ExperienceA blog about managing and improving customer experience and improving profits.https://ronrassociates.com/Rons-BlogEight Digital Marketing Technologies That Can Improve Retentionhttps://ronrassociates.com/Rons-Blog/PostId/30/eight-digital-marketing-technologies-that-can-improve-retentionConversion,Conversion Improvement,Customer Complaints,customer experience,Customer Relationship Management,Customer Service,Digital Marketing,New Product Development,Profit ImprovementRetention,Social MediaMon, 29 Jan 2024 15:34:48 GMT<p><meta name="uuid" content="uuidrMHno6Xr8OgI" /><meta charset="utf-8" /></p> <p style="text-align: justify;"><span style="font-size:larger;"><span style="font-family:verdana;">Over the past decade, a big part of our consulting practice has been helping companies determine how to improve customer retention.&nbsp;</span></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><span style="font-family:verdana;">A recent series of requests for contributions to a marketing blog on LinkedIn led us&nbsp;to develop this article. Below are&nbsp;<strong>eight digital marketing technologies</strong>&nbsp;marketers can use to help improve customer retention and grow revenue.&nbsp;</span></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><span style="font-family:verdana;"><em>(Please note that while we provide vendor names, the list of software providers mentioned under each category is&nbsp;</em><strong><em>not</em></strong><em>&nbsp;exhaustive. New technology vendors emerge almost monthly, so please search for and compare competitors of the software vendors listed to find the right one for your company.)</em></span></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><span style="font-family:verdana;"><strong>Email Marketing Software.</strong>&nbsp;Email marketing is first on our list of customer retention technologies. Why? With email, a business can regularly touch its customers by sending information and messaging that&#39;s relevant to customer interests. The critical adjective here is&nbsp;<strong><em>relevant</em></strong>! The most effective emails are personalized based on valid segmentation schemes. They are consistent in branding and well-timed. They are carefully tested. The test data should show that they will reliably resonate with your customers. Retention emails bring customers back by speaking with your brand voice and offering incentives, discounts, special offers, or unique experiences otherwise unavailable to noncustomers. Email is a powerful tool. But use your email list carefully. Please don&#39;t abuse it, or your list of receptive customers will quickly dwindle. Tools for email marketing include <strong>Vertical Response</strong>,&nbsp;<strong>Mailchimp</strong>,&nbsp;<strong>Constant Contact</strong>, and<strong>&nbsp;HubSpot</strong>. For more on this topic, check out our blog article with <a href="https://www.ronrassociates.com/Rons-Blog/PostId/31/8-innovative-ways-to-improve-customer-retention-using-email-or-notifications" target="_blank">eight examples of companies that do retention email well</a>.</span></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><span style="font-family:verdana;"><strong>Customer Relationship Management (CRM)</strong>: Marketers use CRMs to store customer data like email addresses, phone numbers, physical addresses, and communication preferences. They also use CRMs to track marketing interactions with current and potential customers. Leverage CRM data to discern customer behavior. Use it to understand individual preferences and track purchase history. If you sell shoes, for example, does this customer buy when shoes are on discount, or is their purchasing more fashion-conscious? Is it event-related (i.e., snow boots after a major snowstorm) or seasonal (summer, winter, fall, and spring collection purchases)?&nbsp;</span></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><span style="font-family:verdana;">With some imagination and elbow grease, CRM data can give us the information we need to reach these conclusions. It allows marketers to create personalized, high-converting marketing campaigns and ensures that customers who bought from us before keep buying. Integrate your CRM with Marketing Automation (see below) to improve your communication with customers and prospects. Use this integration to build repeat sales funnels with existing customers, driving repeat purchases and improving retention. CRM software providers include&nbsp;<strong>Salesforce</strong>,&nbsp;<strong>Zoho CRM</strong>, and&nbsp;<strong>Microsoft Dynamics</strong>. For more on <a href="https://www.ronrassociates.com/Rons-Blog/PostId/8/customer-relationship-management-not-just-for-big-business" target="_blank">CRM and its uses</a>, see our blog article on how CRM can help improve conversion and retention.</span></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><span style="font-family:verdana;"><strong>Social Media Management Tools</strong>. Social media has become an integral part of any retention strategy. Use social media to provide brand updates and inform your customers of reasons to maintain a relationship with you.&nbsp;<strong>Hoot Suite</strong>&nbsp;or&nbsp;<strong>Buffer</strong>&nbsp;are two examples of software enabling marketers to schedule social media updates and track social activity across platforms. Social media can increase customer engagement and maintain customers&#39; interest in your brand. See also our blog article on <a href="https://www.ronrassociates.com/Rons-Blog/PostId/24/28-examples-of-social-media-advertising-campaigns-small-businesses-can-use-to-build-their-brands" target="_blank">Social Media Marketing for 24&nbsp;examples </a>of ways you can use Social Media to increase sales, improve customer retention, and support your brand.</span></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><span style="font-family:verdana;"><strong>Marketing Automation Platforms.</strong>&nbsp;Marketing automation platforms provide tools for automatically triggering marketing execution, including email campaigns, social media posts, remarketing campaigns, and more. If properly configured, marketing automation can track and manage lead generation from all your customer touchpoints and automate follow-up throughout the customer life cycle. Marketing automation systems allow retention marketers to personalize emails for post-purchase follow-ups, upsells, and cross-sells. It can trigger social media posts, offer targeted promotions, and send follow-up requests to salespeople or customer service representatives. Think of these tools as brilliant conductors in your brand marketing symphony. Research and map your online marketing funnel activities to see what works now, then automate it! These tools can save e-marketers time and effort while ensuring consistent, branded customer retention follow-up and communications. Popular options include&nbsp;<strong>Keap</strong>,&nbsp;<strong>Marketo</strong>,&nbsp;<strong>Pardot</strong>,&nbsp;<strong>Drip</strong>, and&nbsp;<strong>Eloqua.</strong></span></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><span style="font-family:verdana;"><strong>Remarketing Tools.&nbsp;</strong>Another favorite way of turning suspects into prospects and customers into return customers is&nbsp;<strong>remarketing</strong>. With remarketing, a website visit can trigger a series of personalized advertisements on platforms like&nbsp;<strong>Google</strong>,&nbsp;<strong>Facebook</strong>,&nbsp;<strong>LinkedIn</strong>&nbsp;or&nbsp;<strong>Twitter</strong>. Marketers can design experiences around the web content visited by linking a website product page to a particular advertisement on Google or a social media platform. These tools are especially useful in marketing luxury or high-involvement products or services because they direct advertising toward people who have already shown purchase intent. While generally reserved for new product sales, we have also seen this technology used successfully to grow revenue from service or parts upsell to customers who have visited company websites related to after-sale subjects. For more on this topic, check out our <a href="https://www.ronrassociates.com/Rons-Blog/PostId/11/small-company-big-data-huge-impact" target="_blank">blog article on Big Data</a>.</span></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><span style="font-family:verdana;"><strong>Customer Feedback Software.&nbsp;</strong>We all think we listen to our customers. But do you systematically keep track of their feedback and then take action to address their concerns? Those two final steps are crucial for improving customer retention.&nbsp;<strong>Verint,</strong>&nbsp;<strong>SurveyMonkey</strong>, and&nbsp;<strong>Qualtrics&nbsp;</strong>are software vendors that sell technologies that gather valuable customer insights and allow users to aggregate the information to identify actionable trends. Use that information to tease out customer service needs, gaps in your product and service offerings, complaint trends, and brand challenges. Use these technologies to develop systematic ways to leverage customer feedback and improve. See our <a href="https://www.ronrassociates.com/Rons-Blog/PostId/7/finding-increased-profits-through-better-complaints-management" target="_blank">blog article on customer complaints </a>for more on this topic.</span></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><span style="font-family:verdana;"><strong>Personalization.&nbsp;</strong>Personalization is another meaningful way of retaining customers, making them feel valued by the brand. Personalization tools such as&nbsp;<strong>Optimizely</strong>&nbsp;or&nbsp;<strong>Adobe Target</strong>&nbsp;are software designed to permit marketers to create customized experiences. Design individualized experiences or offers for each customer persona based on their segment&#39;s preferences and behavior. Build customer experiences that make their lives easier. See <a href="https://www.ronrassociates.com/Rons-Blog/PostId/22/buying-and-delivery-preference-the-new-battleground">our article on buying preference</a> for more on this topic.</span></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><span style="font-family:verdana;"><strong>Loyalty Program Software.&nbsp;</strong>Ever since a coffee shop figured out how to offer punch cards to give loyal customers a tenth coffee free, loyalty programs have become a time-honored way to drive customer retention. Reward customers for their continued business. As with everything, software now exists to track and manage this activity. Loyalty program software vendors include&nbsp;<strong>Smile.io</strong>&nbsp;or&nbsp;<strong>LoyaltyLion.&nbsp;</strong>Both can help create and manage new loyalty programs and make starting a program more manageable. Create incentives and rewards for customers, and design programs that encourage them to return. Then, watch retention numbers improve. See our <a href="https://www.ronrassociates.com/Rons-Blog/BlogPage/3" target="_blank">blog on Customer Lifetime Value</a> for more on how companies manage customer loyalty.</span></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><span style="font-family:verdana;"><strong>Integration and Reporting.&nbsp;</strong>Before pulling the trigger on any software purchase, carefully examine how well these systems integrate with your existing marketing infrastructure. Pay special attention to reporting, scalability, and customer support capabilities (and support cost). Many of the leading vendors in each category above offer capabilities in other categories. For example, many marketing automation providers also provide CRM capabilities.&nbsp;</span></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><span style="font-family:verdana;">Also, make sure that the reporting system for the software can exactly replicate what you are currently providing to senior management. Senior leaders want what they want, and if the new software can only provide a slightly different report from what leadership likes, you may spend the next couple of years downloading and formatting data to meet their needs.&nbsp;</span></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><span style="font-family:verdana;">For more on integration and marketing, see our blog article about <a href="https://www.ronrassociates.com/Rons-Blog/PostId/15/integrate-or-die" target="_blank">integration as the modern marketing superpower</a>.</span></span></p> 3024 Examples of Social Media Advertising Campaigns Small Businesses Can Use To Build Their Brandshttps://ronrassociates.com/Rons-Blog/PostId/24/28-examples-of-social-media-advertising-campaigns-small-businesses-can-use-to-build-their-brandsBranding,Content Development,Conversion,Customer Complaints,New Product Development,SEO,Social MediaThu, 30 Nov 2023 14:29:00 GMT<p><meta name="uuid" content="uuid3YuAHgdErd3s" /><meta charset="utf-8" /></p> <p style="text-align: justify;"><span style="font-size:larger;">Social media is one of the most influential elements of modern advertising. It has arisen from a trendy curiosity to a mainstay of consumer marketing. Marketers use social media in various ways, most of which small business owners can use to build their brands. These include&nbsp;<strong>paid advertising</strong>,&nbsp;<strong>influencer marketing</strong>,&nbsp;<strong>content creation</strong>,&nbsp;<strong>social listening</strong>, and&nbsp;<strong>user-generated content</strong>&nbsp;development. Finally, new technology has allowed marketers to engage in community building through&nbsp;<strong>live-streaming</strong>&nbsp;events and<strong>&nbsp;contests</strong>.&nbsp;</span></p> <p style="text-align: justify;"><span style="font-size:larger;">As a Management Consultant and part-time College Instructor in Marketing and Management, I am a great keeper of examples that help explain marketing techniques. Below, I briefly explain the six kinds of social media advertising strategies. With each element of this typology, I provide examples of excellent execution of these strategies. If one of the examples interests you, click on it to learn more, then bookmark the URL for future use!&nbsp;</span></p> <p style="text-align: justify;"><span style="font-size:larger;"><strong>Paid Advertising.&nbsp;</strong>Paid advertising tops the list of ways marketers use social media to promote their products and services. With paid advertising, marketers provide target audiences with tailored messages. Marketers design these messages to drive engagement with prospects and customers and lift conversions. <a href="https://www.ronrassociates.com/Rons-Blog/PostId/15/integrate-or-die">Retargeting customers who have visited your website with ads on social media</a> is an example of a particularly successful tactic we&#39;ve mentioned in previous posts. Products from pages previously visited suddenly start appearing on other web pages we visit. Here are some examples of companies that do this well:</span></p> <ul> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://landingcube.com/traffic/facebook-retargeting-amazon-products/" target="_blank">Amazon&#39;s retargeting program on Facebook</a>&nbsp;(LandingCube, 2023).</span></li> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://www.markettailor.io/blog/growth-hacking-through-retargeting-and-remarketing" target="_blank">Spotify uses retargeting ads on Instagram to increase customer engagement and sales</a>&nbsp;(Growth Hacking Through Retargeting and Remarketin<em>g</em>, n.d.).</span></li> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://digiday.com/media/apple-brings-retargeting-iad/" target="_blank">Apple&#39;s retargeting Twitter ads drive customer loyalty</a>&nbsp;(McDermott, 2014).</span></li> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://www.thinkwithgoogle.com/intl/en-gb/marketing-strategies/video/how-airbnb-used-ad-sequencing-bring-their-new-product-life-youtube/" target="_blank">How Airbnb&#39;s retargeting campaigns on YouTube used video content to target their audience</a>&nbsp;(Shipley &amp; Clark, 2021).</span></li> </ul> <p style="text-align: justify;"><span style="font-size:larger;">Paid social media ads allow marketers to track the performance of their campaigns in real-time. This attribute helps marketers make data-driven decisions about their marketing strategies and how they are paying off.</span></p> <p style="text-align: justify;"><span style="font-size:larger;"><strong>Influencer Marketing.&nbsp;</strong>As we discussed in previous posts, marketers can reach a broad audience in their target market by working with influencers. Influencers are people who demonstrably speak to your target audience and theirs. Marketers find influencers with large followings on social media platforms such as Instagram, Twitter, YouTube, and the newly emergent&nbsp;<a href="https://about.fb.com/news/2023/07/introducing-threads-new-app-text-sharing/" target="_blank">Threads</a>&nbsp;and hire them to insert their products and services directly into their context -- hopefully the same context as your target audience. Influencers can help build trust in your brand with key customers. Influencers accomplish this by providing reviews and recommendations for your products and services or, like athletes and outdoor video bloggers, simply using your products. Here are some examples of successful influencer marketing campaigns. Most examples below include mega influencers, but remember that a top blogger, amateur athlete, or rising musician can be just as influential!</span></p> <ul> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://business.twitter.com/en/success-stories/starbucks-stokes-red-cups-fever-on-twitter.html" target="_blank">Starbucks&#39; #RedCupContest on Twitter</a>&nbsp;(Starbucks Stokes Red Cups Fever on Twitter, n.d.)</span></li> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://www.instagram.com/p/CvQSWlVpnkS/" target="_blank">Nike&#39;s collaboration with Lebron James on Instagram</a>&nbsp;(Instagram, n.d.).</span></li> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://www.marketingdive.com/news/apple-joins-instagram-to-show-off-shot-on-iphone-campaign/448839/" target="_blank">Apple&#39;s #ShotOniPhone campaign on Instagram</a>&nbsp;(Kirkpatrick 2017).</span></li> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://qz.com/quartzy/1304635/how-rihanna-forced-the-beauty-industry-to-acknowledge-a-world-beyond-the-rich-and-the-white" target="_blank">Dior with Rihanna for the Fenty Beauty launch</a>&nbsp;(Singh-Kurtz, 2022).</span></li> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://www.scribbr.com/citation/generator/folders/5ikXYlau81nAaRF9KYIVlz/lists/6473VM25BnkXXqIrJvqLOZ/" target="_blank">Coca-Cola&#39;s #ShareACoke campaign on Twitter&nbsp;</a>(Napean, 2014)</span></li> </ul> <p style="text-align: justify;"><span style="font-size:larger;"><strong>Social Listening.&nbsp;</strong>Social listening is an effective technique marketers use to find out what their target audience thinks about their products and services. Social listening involves monitoring conversations on social media platforms to deliver insights into what people say about a particular product or service. Marketers use this type of research to inform marketing decisions. Consumers provide free feedback that marketers can use to improve the product or service they are promoting. As we discussed in <a href="http://www.ronrassociates.com/Rons-Blog/PostId/7/finding-increased-profits-through-better-complaints-management">our previous blog about complaints management</a>, this information can improve profits and lower costs when adequately indexed, sorted, and analyzed. Here are some examples of social listening programs that have worked well:</span></p> <ul> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://www.diligent.es/social-media-listening-strategy-starbucks/" target="_blank">Starbucks Successful Social Listening</a>&nbsp;(Diligent Team, 2016).</span></li> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://netbasequid.com/blog/envisioning-iphone-worthy-release-social-listening/" target="_blank">How Apple Uses Social Listening to Improve Products</a>&nbsp;(Surico, 2023).</span></li> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://www.giraffesocialmedia.co.uk/how-do-amazon-use-social-media/" target="_blank">Amazon&#39;s Use of Social Listening to Enhance Customer Experience</a>&nbsp;(Stroud, 2023)&nbsp;</span></li> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://www.forbes.com/sites/jenniferrooney/2012/09/25/in-dell-social-media-journey-lessons-for-marketers-about-the-power-of-listening/?sh=3734fe902570" target="_blank">Dell&#39;s Innovative Way of Engaging with its Consumers Through Social Media Monitoring</a>&nbsp;(Rooney, 2012).</span></li> </ul> <p style="text-align: justify;"><span style="font-size:larger;"><strong>User Generated Content (UGC).&nbsp;</strong>UGC refers to any content created by users on a particular platform that has been shared publicly, such as reviews, photos, videos, etc. UGC provides free exposure for brands as it often resonates more strongly with other users than traditional forms of advertising due to its authenticity and relatability factor. Here are some examples of how marketers use UGC:</span></p> <ul> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://amazonseoconsultant.com/product-storytelling-examples/" target="_blank">Highlighting customers&#39; experiences with the product &ndash; reviews, recommendations, and stories</a>&nbsp;(Buckland, 2023).</span></li> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://smallbiztrends.com/2023/07/unboxing-videos.html" target="_blank">Showcasing customer &#39;unboxing&#39; videos to demonstrate product quality and features</a>. (Pilon, 2023).</span></li> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://digitalmarketinginstitute.com/blog/how-to-use-user-generated-content-ugc-with-4-great-examples" target="_blank">Asking customers to post photos wearing or using the product on their social media profiles with a hashtag associated with your brand</a>&nbsp;(Myers, 2023).</span></li> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://www.omnisend.com/blog/testimonial-advertising/" target="_blank">Inviting customers to submit creative content for marketing campaigns</a>&nbsp;(Meyer, 2023).</span></li> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://www.searchenginejournal.com/social-celebrity-endorsements/415568/" target="_blank">Engage influencers and celebrities in conversation about your product or service</a>&nbsp;(Weinstein, 2021).</span></li> </ul> <p style="text-align: justify;"><span style="font-size:larger;"><strong>Live Streaming.&nbsp;</strong>Live streaming has become increasingly popular among marketers in recent years. Live streaming events permit marketers to interact directly with viewers in real time. Showcasing a product or service during a live event builds consumer engagement with your brand. It usually forges a stronger connection between the brand and its audience. Also, live streams often go viral, increasing brand awareness and sales opportunities. Examples abound! Here are a few:</span></p> <ul> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://variety.com/2014/digital/news/world-cup-why-nike-should-turn-its-soccer-short-the-last-game-into-a-digital-series-1201242251/" target="_blank">Nike&#39;s &quot;The Last Game&quot; Live Stream</a>&nbsp;(Graser, 2014).</span></li> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://www.marketingdive.com/news/burger-king-whopper-detour-mobile-marketer-awards/566224/" target="_blank">Burger King&#39;s &quot;Whopper Detour&quot; Live Stream</a>&nbsp;(Koltun, 2019).</span></li> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://techcrunch.com/2022/05/17/apple-musics-concert-series-livestream-performances-harry-styles/" target="_blank">Apple&#39;s &quot;Apple Music Festival&quot; Live Stream</a>&nbsp;(<em>TechCrunch</em>, 2022).</span></li> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://www.theverge.com/23799567/samsung-galaxy-unpacked-live-stream-watch-date-time-z-flip-fold" target="_blank">Samsung Live Stream of Galaxy Fold Unpacking</a>&nbsp;(Roth, 2023).</span></li> </ul> <p style="text-align: justify;"><span style="font-size:larger;"><strong>Contests &amp; Giveaways.&nbsp;</strong>Contests and giveaways are another great way for marketers to use social media platforms like Facebook &amp; Instagram to promote their products and services. Contests allow brands to engage directly with followers while offering prizes for other products or services. Marketers design these promotions so that a company starts a relationship with customers (who typically will trade an email address or phone number in exchange for a chance to win.) These fun promotions increase brand awareness and encourage followers to spread the word about your business, increasing sales opportunities and marketing lists! Here are a few examples of successful programs:</span></p> <ul> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://www.talon.one/blog/mcdonalds-monopoly-a-masterclass-in-promotions" target="_blank">McDonald&#39;s Monopoly promotion</a>&nbsp;(Bewicke, 2023)</span></li> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://www.youtube.com/watch?v=FYkzqvcCl_E" target="_blank">Doritos&#39; Super Bowl Action Movie contest</a>&nbsp;(ABC News, 2014).</span></li> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://www.cnbc.com/2017/10/13/oreo-giving-away-100000-if-you-can-guess-the-mystery-flavor.html" target="_blank">Oreo&#39;s Mystery Flavors game</a>&nbsp;(Carter, 2017).</span></li> <li style="text-align: justify;"><span style="font-size:larger;"><a href="https://www.wrike.com/blog/winning-coca-cola-formula-successful-campaign/" target="_blank">Coca-Cola&#39;s &quot;Share a Coke&quot; campaign</a>&nbsp;(Codella, 2022).</span></li> </ul> <p style="text-align: justify;"><span style="font-size:larger;"><strong>Summing Up</strong></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Social media is an excellent way for your company to get itself noticed. As the above examples show, the tactic is used successfully by some of the biggest businesses. This interaction is why even small business marketers should learn social media advertising techniques. Take note of the above examples of ways to use social networking for marketing purposes. Social networking allows small and large businesses to create a strong presence, build brand recognition, and increase sales. Every business will have its unique approach to using social media. Still, one thing is sure: if done effectively, this medium can tremendously impact any organization&#39;s bottom line -- including yours.&nbsp;</span></p> <p style="text-align: justify;">&nbsp;</p> <h2 style="text-align: justify;"><span style="font-size:larger;"><strong>References</strong></span></h2> <p style="text-align: justify;"><span style="font-size:larger;">ABC News. (2014, January 9).&nbsp;<em>Doritos Super Bowl ad competition offers winners $1M</em>&nbsp;[Video]. YouTube.&nbsp;<a href="https://www.youtube.com/watch?v=FYkzqvcCl_E" target="_blank">https://www.youtube.com/watch?v=FYkzqvcCl_E</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Avar admin. (2023, August 7). Dell&#39;s approach to social media sourcing and ROI.&nbsp;<em>Avature</em>.&nbsp;<a href="https://www.avature.net/blogs/dells-approach-social-media-sourcing/" target="_blank">https://www.avature.net/blogs/dells-approach-social-media-sourcing/</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Bewicke, H. (2023, July 23).&nbsp;<em>McDonald&#39;s Monopoly: a masterclass in promotions | Talon.One</em>.&nbsp;<a href="https://www.talon.one/blog/mcdonalds-monopoly-a-masterclass-in-promotions" target="_blank">https://www.talon.one/blog/mcdonalds-monopoly-a-masterclass-in-promotions</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Buckland, T. (2023, May 26).&nbsp;<em>The 6 Best Product Storytelling Examples from Around the Web</em>. Amazon SEO Consultant.&nbsp;<a href="https://amazonseoconsultant.com/product-storytelling-examples/" target="_blank">https://amazonseoconsultant.com/product-storytelling-examples/</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Carter, S. M. (2017, November 22). Oreo is giving away $100,000 if you can guess its &#39;mystery&#39; flavor.&nbsp;<em>CNBC</em>.&nbsp;<a href="https://www.cnbc.com/2017/10/13/oreo-giving-away-100000-if-you-can-guess-the-mystery-flavor.html" target="_blank">https://www.cnbc.com/2017/10/13/oreo-giving-away-100000-if-you-can-guess-the-mystery-flavor.html</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><em>Coca-Cola launches Tweet-a-Coke as trackable social coupons gain | Retail Dive</em>. (n.d.).&nbsp;<a href="https://www.retaildive.com/ex/mobilecommercedaily/coca-cola-tests-twitters-social-commerce-waters-as-it-begins-to-emerge-as-a-top-predator" target="_blank">https://www.retaildive.com/ex/mobilecommercedaily/coca-cola-tests-twitters-social-commerce-waters-as-it-begins-to-emerge-as-a-top-predator</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Codella, D. (2022). The winning Coca-Cola formula for a successful campaign.&nbsp;<em>Blog Wrike</em>.&nbsp;<a href="https://www.wrike.com/blog/winning-coca-cola-formula-successful-campaign/" target="_blank">https://www.wrike.com/blog/winning-coca-cola-formula-successful-campaign/</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">David Kirkpatrick Contributing Editor. (2017, August 8).&nbsp;<em>Apple joins Instagram to show off &quot;Shot on iPhone&quot; campaign</em>. Marketing Dive.&nbsp;<a href="https://www.marketingdive.com/news/apple-joins-instagram-to-show-off-shot-on-iphone-campaign/448839/" target="_blank">https://www.marketingdive.com/news/apple-joins-instagram-to-show-off-shot-on-iphone-campaign/448839/</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Diligent Team. (2016, September 13).&nbsp;<em>Social Media Listening Strategy and how Starbucks does it</em>. Diligent.&nbsp;<a href="https://www.diligent.es/social-media-listening-strategy-starbucks/" target="_blank">https://www.diligent.es/social-media-listening-strategy-starbucks/</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Editorial team. (2013, August 20).&nbsp;<em>Giveaway! Bridal Lingerie from Cosabella | Junebug Weddings</em>.&nbsp;<a href="https://junebugweddings.com/wedding-blog/giveaway-bridal-lingerie-from-cosabella/" target="_blank">https://junebugweddings.com/wedding-blog/giveaway-bridal-lingerie-from-cosabella/</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Graser, M. (2014, June 23). Variety.&nbsp;<em>Variety</em>.&nbsp;<a href="https://variety.com/2014/digital/news/world-cup-why-nike-should-turn-its-soccer-short-the-last-game-into-a-digital-series-1201242251/" target="_blank">https://variety.com/2014/digital/news/world-cup-why-nike-should-turn-its-soccer-short-the-last-game-into-a-digital-series-1201242251/</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><em>Growth hacking through retargeting and remarketing</em>. (n.d.).&nbsp;<a href="https://www.markettailor.io/blog/growth-hacking-through-retargeting-and-remarketing" target="_blank">https://www.markettailor.io/blog/growth-hacking-through-retargeting-and-remarketing</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><em>Instagram</em>. (n.d.).&nbsp;<a href="https://www.instagram.com/p/CvQSWlVpnkS/" target="_blank">https://www.instagram.com/p/CvQSWlVpnkS/</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Koltun, N. (2019, December 9).&nbsp;<em>Campaign of the Year: Burger King&#39;s &quot;Whopper Detour.&quot;</em>&nbsp;Marketing Dive.&nbsp;<a href="https://www.marketingdive.com/news/burger-king-whopper-detour-mobile-marketer-awards/566224/" target="_blank">https://www.marketingdive.com/news/burger-king-whopper-detour-mobile-marketer-awards/566224/</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">LandingCube. (2023, April 20).&nbsp;<em>Chapter 5: Facebook retargeting for Amazon products</em>.&nbsp;<a href="https://landingcube.com/traffic/facebook-retargeting-amazon-products/" target="_blank">https://landingcube.com/traffic/facebook-retargeting-amazon-products/</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">McDermott, J. (2014, October 15). Apple revamps mobile ads with retargeting options.&nbsp;<em>Digiday</em>.&nbsp;<a href="https://digiday.com/media/apple-brings-retargeting-iad/" target="_blank">https://digiday.com/media/apple-brings-retargeting-iad/</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Meyer, B. (2023, June 20).&nbsp;<em>The 13 best examples of testimonial advertising</em>. Omnisend Blog.&nbsp;<a href="https://www.omnisend.com/blog/testimonial-advertising/" target="_blank">https://www.omnisend.com/blog/testimonial-advertising/</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Myers, D. (2023, January 16). 4 Great examples of User-Generated Content (UGC).&nbsp;<em>Digital Marketing Institute</em>.&nbsp;<a href="https://digitalmarketinginstitute.com/blog/how-to-use-user-generated-content-ugc-with-4-great-examples" target="_blank">https://digitalmarketinginstitute.com/blog/how-to-use-user-generated-content-ugc-with-4-great-examples</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">NapeanLLC. (2014, July 29).&nbsp;<em>Coca-Cola launches Tweet-a-Coke as trackable social coupons gain</em>&nbsp;[Video]. YouTube.&nbsp;<a href="https://www.youtube.com/watch?v=ECFUR_4s5oQ" target="_blank">https://www.youtube.com/watch?v=ECFUR_4s5oQ</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Pilon, A. (2023). Twenty-five best unboxing videos and how to create your masterpiece.&nbsp;<em>Small Business Trends</em>.&nbsp;<a href="https://smallbiztrends.com/2023/07/unboxing-videos.html" target="_blank">https://smallbiztrends.com/2023/07/unboxing-videos.html</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Rooney, J. (2012, September 25). In Dell Social-Media Journey, Lessons For Marketers About The Power Of Listening.&nbsp;<em>Forbes</em>.&nbsp;<a href="https://www.forbes.com/sites/jenniferrooney/2012/09/25/in-dell-social-media-journey-lessons-for-marketers-about-the-power-of-listening/?sh=3734fe902570" target="_blank">https://www.forbes.com/sites/jenniferrooney/2012/09/25/in-dell-social-media-journey-lessons-for-marketers-about-the-power-of-listening/?sh=3734fe902570</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Roth, E. (2023, July 25). Samsung Galaxy Unpacked 2023: how to watch the live stream and what to expect.&nbsp;<em>The Verge</em>.&nbsp;<a href="https://www.theverge.com/23799567/samsung-galaxy-unpacked-live-stream-watch-date-time-z-flip-fold" target="_blank">https://www.theverge.com/23799567/samsung-galaxy-unpacked-live-stream-watch-date-time-z-flip-fold</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Shipley, K., &amp; Clark, S. (2021). How Airbnb used ad sequencing to bring their new product to life on YouTube.&nbsp;<em>Think With Google</em>.&nbsp;<a href="https://www.thinkwithgoogle.com/intl/en-gb/marketing-strategies/video/how-airbnb-used-ad-sequencing-bring-their-new-product-life-youtube/" target="_blank">https://www.thinkwithgoogle.com/intl/en-gb/marketing-strategies/video/how-airbnb-used-ad-sequencing-bring-their-new-product-life-youtube/</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Singh-Kurtz, S. (2022, July 20). How Rihanna forced the beauty industry to acknowledge a world beyond the rich and the white.&nbsp;<em>Quartz</em>.&nbsp;<a href="https://qz.com/quartzy/1304635/how-rihanna-forced-the-beauty-industry-to-acknowledge-a-world-beyond-the-rich-and-the-white" target="_blank">https://qz.com/quartzy/1304635/how-rihanna-forced-the-beauty-industry-to-acknowledge-a-world-beyond-the-rich-and-the-white</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><em>Starbucks stokes Red Cups fever on Twitter</em>. (n.d.).&nbsp;<a href="https://business.twitter.com/en/success-stories/starbucks-stokes-red-cups-fever-on-twitter.html" target="_blank">https://business.twitter.com/en/success-stories/starbucks-stokes-red-cups-fever-on-twitter.html</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Stroud, S. (2023). Amazon &amp; social media: How does Amazon use it?&nbsp;<em>Giraffe Social Media</em>.&nbsp;<a href="https://www.giraffesocialmedia.co.uk/how-do-amazon-use-social-media/" target="_blank">https://www.giraffesocialmedia.co.uk/how-do-amazon-use-social-media/</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Surico, K. (2023). Envisioning Your iPhone-worthy Release with Social Listening.&nbsp;<em>NetBase Quid</em>.&nbsp;<a href="https://netbasequid.com/blog/envisioning-iphone-worthy-release-social-listening/" target="_blank">https://netbasequid.com/blog/envisioning-iphone-worthy-release-social-listening/</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><em>TechCrunch is part of the Yahoo family of brands</em>. (2022, May 17).&nbsp;<a href="https://techcrunch.com/2022/05/17/apple-musics-concert-series-livestream-performances-harry-styles/" target="_blank">https://techcrunch.com/2022/05/17/apple-musics-concert-series-livestream-performances-harry-styles/</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Weinstein, M. (2021). 10 Examples of Social Media Celebrity Endorsements That Paid Off Big Time.&nbsp;<em>Search Engine Journal</em>.&nbsp;<a href="https://www.searchenginejournal.com/social-celebrity-endorsements/415568/" target="_blank">https://www.searchenginejournal.com/social-celebrity-endorsements/415568/</a></span></p> 24Why Integration Is A Digital Marketer's Superpowerhttps://ronrassociates.com/Rons-Blog/PostId/15/integrate-or-dieConversion,customer experience,Profit ImprovementTue, 14 Dec 2021 16:17:42 GMT<p><meta name="uuid" content="uuid1Spf1q1Tnhj9" /><meta charset="utf-8" /></p> <p style="text-align: justify;"><strong><em>&quot;If you want your business to convert customers and lock in online business partners, you need to integrate to create a seamless customer experience.&quot;&nbsp;&nbsp;</em></strong></p> <p style="text-align: justify;">Many years ago, a senior product manager shared this pearl of insight. It was not intuitive to me, but once I understood it, career-changing in its power. Here are some examples of integration and the ways it extends digital marketers&#39; reach:</p> <p style="text-align: justify;"><strong>Online Advertising and Retargeting.&nbsp;</strong>Facebook/Meta, Google, and LinkedIn, among others, allow advertisers to download a snippet of code and place it on their websites. This code identifies a prospective&nbsp;customer to&nbsp;Google, Facebook, or&nbsp;LinkedIn, respectively, when visiting the&nbsp;advertiser&#39;s website. The javascript codes automatically trigger advertisements on a user&#39;s&nbsp;timeline, or in Google&#39;s case, display ads around the internet. An example using <a href="https://www.facebook.com/business/help/144576119557578?id=1913105122334058" target="_blank">Facebook</a> will help. Suppose I visit a kayak seller&#39;s website. In that case, the kayak seller&#39;s Facebook code will start advertisements on my Facebook or Instagram timeline. This advertising will occur for days and even weeks after I made the initial visit to the kayak manufacturer&#39;s website. This [re]targeting&nbsp;technique has the aspect of a product following you around the internet! The method has been a boon for the marketers of high involvement products like shoes, cell phones, or kayaks while driving the advertiser&#39;s revenue growth. It is successful because it works.&nbsp;<a href="https://www.facebook.com/business/help/144576119557578?id=1913105122334058" target="_blank">Facebook</a>, <a href="https://www.youtube.com/watch?v=FUiU3MgtGA4" target="_blank">Google</a>, and <a href="https://www.linkedin.com/help/lms/answer/a420433/get-started-with-linkedin-website-retargeting?lang=en" target="_blank">LinkedIn</a>&nbsp;have&nbsp;<em>integrated</em>&nbsp;their digital advertising capabilities with the marketer&#39;s&nbsp;website. This integration allows Facebook, LinkedIn, and Google advertisers to follow their prospects through the often-lengthy buying process.</p> <p style="text-align: justify;"><meta name="uuid" content="uuidv3VhlTIJWaED" /><meta charset="utf-8" />Another way Google allows advertisers to integrate with their partners is through its pay-per-click search advertising extensions. Google allows advertisers to identify their dealer networks through&nbsp;<a href="https://adespresso.com/blog/guide-google-ads-ad-extensions/#AffiliateLocationExtensions" target="_blank">affiliate advertising extensions</a>. Here is how it works. Set up your Google ad for searches on keywords (e.g., &quot;<strong><em>XYZ headphones</em></strong>&quot;), go to extensions for the advertisement, and choose your affiliates who sell these headphones for you. Once the distribution partner is selected, when you run this ad, Google will use geolocation to allow users (people to whom you are selling your headphones) to see your XYZ headphone ad. Below the ad, Google will place an extension, listing nearby locations&nbsp;to buy those headphones through your dealer network.</p> <p style="text-align: justify;"><meta name="uuid" content="uuidroTIc6jRybRZ" /><meta charset="utf-8" /></p> <p style="text-align: justify;"><strong>Programmatic Advertising.&nbsp;</strong>There is no better example of marketing integration than Programmatic Advertising. With Programmatic, Ad-Tech Companies rent advertising space around the internet. When a user like you visits a page where the ad tech company is leasing space, in the 100 milliseconds it takes for the page to load, the ad tech company:</p> <ol> <li style="text-align: justify;">Looks you up in its databases via cookies;&nbsp;</li> <li style="text-align: justify;">Determines how much it can bid with its stable of advertisers for an ad delivered to you;</li> <li style="text-align: justify;">Offers the winning bid in an auction for that ad space, and;&nbsp;</li> <li style="text-align: justify;">Loads an eerily relevant ad to you into the leased advertising space.&nbsp;&nbsp;</li> </ol> <p style="text-align: justify;">Now, put some machine learning on the back end, allowing the ad tech company to integrate with many large-scale databases and optimize CPM advertising. You have the makings of a seamless, efficient, and highly customized way of delivering display advertising to you. Because of the obvious privacy concerns around this kind of advertising, how the advertisers manage the &quot;electronic plumbing&quot; that makes this possible is, forgive the pun, highly fluid. Follow this link to a good blog piece on&nbsp;<a href="https://qz.com/2000490/the-death-of-third-party-cookies-will-reshape-digital-advertising/" target="_blank">what is currently happening in the programmatic advertising space</a>. The only thing we know is that programmatic is snowballing and will be around for the foreseeable future.</p> <p style="text-align: justify;"><strong>Online Reservation Management for Restaurants.&nbsp;</strong>Restaurant reservations have moved online to the delight of restauranteur and customers alike. The benefits are readily apparent. The phone no longer needs to be manned at odd or peak hours for the restaurant owner, distracting food prep staff from cooking and dining staff from customers. Online reservation systems like&nbsp;<a href="https://resy.com/resyos/" target="_blank">Resy</a>,&nbsp;<a href="https://www.opentable.com/" target="_blank">Open Table</a>,&nbsp;<a href="https://www.tablein.com/" target="_blank">Tablein</a>, and&nbsp;<a href="https://restaurant.eatapp.co/" target="_blank"><em>eat</em></a>&nbsp;automate the reservation process and send follow-up text message confirmation of reservations. They can integrate upstream with online advertisers like Google My Business, Facebook/Meta, Instagram, or TripAdvisor. These systems allow customers like you and me to find a trendy new restaurant online. We can click a link on Google My Business Thursday early morning in our jammies and make a reservation for the last table available at 6 PM on Saturday&#39;s busy holiday season. Downstream integrations for this kind of application allow some systems (like&nbsp;<a href="https://restaurant.opentable.com/products/" target="_blank">Open Table</a>) to integrate with Point of Sale restaurant management systems, enabling restaurant managers to follow a customer from online lead to reservation to Crème Brulé Cheesecake order. The customer insights from this data can be compelling, allowing restaurants to optimize advertising and menu choices and maximize revenue.&nbsp; &nbsp;</p> <p style="text-align: justify;"><strong>Online Giving.&nbsp;</strong>You may be surprised that there is such a thing as church management software and church online giving platforms that allow customers to set up their church donations online. The truth is that we donate more if we set up automatic tithing.&nbsp;<a href="https://www.ministrybrands.com/solutions/online-giving/" target="_blank">Ministry Brands</a>&nbsp;owns several online giving platforms and has integrated its payment systems with its church management software. Faith-based organizations can offer secure, flexible giving options tied directly to their church management software&#39;s member management tools, allowing churches to track donations, and recognize, communicate with, and engage their constituents.</p> <p style="text-align: justify;"><strong>HVAC Manufacturing.&nbsp;</strong>Carrier Corporation, the HVAC vendor,&nbsp;has developed a marketing communications site for downstream dealers. The site allows Carrier dealers to advertise their products to their customers using branded materials developed by Carrier.&nbsp;<a href="https://adkit.carrier.com/en/us/" target="_blank">The online marketing kit</a>&nbsp;includes marketing materials, local radio and television advertising copy, logos, photos of equipment, social media posts &ndash; 12 for each month of the year, even advice on Google My Business and Search Engine Optimization for partner websites. They even offer materials for the recruitment of technicians!&nbsp; &nbsp;</p> <p style="text-align: justify;">A supplier to this industry has taken this concept one step further. The agency created a digital platform that allows co-branded marketing between manufacturers and downstream distributors. The technology&nbsp;enables manufacturers to house data on distribution&nbsp;affiliates and the affiliates&#39; prospects in the cloud. The system&nbsp;validates all mailing addresses and&nbsp;eliminates wrong addresses for correction&nbsp;to minimize waste. Users can choose&nbsp;direct mail options or send templated, co-branded emails to recipients. The manufacturer controls branding and content in exchange for subsidized marketing for affiliates.&nbsp; &nbsp;Everybody wins in this formula.</p> <p style="text-align: justify;"><strong>It&#39;s About Systems Integration</strong></p> <p style="text-align: justify;">Okay, so you get the gist of it now. Systems integration is an engineering process concerned with joining two or more systems as one. Innovative companies use system integration to add value by connecting two or more different technologies.</p> <p style="text-align: justify;"><strong>Upstream Integration</strong></p> <p style="text-align: justify;">The benefit of integrating with suppliers is that it helps build relationships that last over time and provide opportunities for future growth together while at the same time improving the overall experience for the customer<strong>.</strong>&nbsp; &nbsp;Moreover, through upstream integration, you better understand your supply chain. You can save time and money by eliminating the need for third-party logistics providers. Leadership can cut down on stock-outs and increase customer satisfaction, reducing inventory and materials waste. Finally, integration can simplify product development through suppliers&#39; research and innovation capabilities.&nbsp;&nbsp;</p> <p style="text-align: justify;"><strong>Downstream Integration</strong></p> <p style="text-align: justify;">Looking downstream, integrating your vendors can improve your sales and marketing effectiveness. Sharing customer information with a partner can help you better serve that customer. Joining forces with your distributors, you can develop co-marketing plans, partner on events or sponsorship together, share marketing materials and content online to reach new audiences, and create joint customer promotions (e.g., discounts or other incentives). In the brave new world of digital marketing, integration can mean creating that clever piece of code that allows users to add your functionality to theirs. For example,&nbsp;<a href="https://calendly.com/integration" target="_blank">Calendly</a>&nbsp;was a ho-hum calendaring application. Or so I thought until&nbsp;I learned that I could use the application to automate appointment-setting on my&nbsp;websites. Calendly&#39;s website integration&nbsp;allows people on my websites to set appointments with me. Integration with Google calendar, in turn, permits&nbsp;me to see&nbsp;my&nbsp;meetings&nbsp;in one calendar. On my cell phone!</p> <p style="text-align: justify;"><strong>How to Get Started</strong></p> <p style="text-align: justify;">You may ask&nbsp;<strong><em>how</em></strong>&nbsp;integration opportunities become apparent. Options appear most easily when you and your partners put yourselves in your customers&#39; shoes. That means first researching and defining a customer persona to understand deeply who your customers are and how they shop, buy, and fulfill their needs.&nbsp;&nbsp;</p> <p style="text-align: justify;"><strong>Journey Mapping</strong></p> <p style="text-align: justify;">Most importantly, once you have developed this persona, you need to create&nbsp;<a href="https://www.lucidchart.com/blog/how-to-build-customer-journey-maps" target="_blank"><strong>customer journey maps</strong></a>&nbsp;to understand what customers want to do and how their needs are underserved by the current process. Draw a flowchart of what your customer does when they shop for and buy your product. Identify any pain points along the way (including during product delivery) and work with your partners and systems folks to make the pain points go away! As the examples above show, those pain points often involve a lack of integration!</p> <p style="text-align: justify;">A favorite example of leveraging customer journey information comes from Patricia Seybold&#39;s Digital Marketing chestnut,&nbsp;<a href="https://www.amazon.com/Customers-com-Classic-Patricia-B-Seybold-ebook/dp/B004183XEW/ref=sr_1_1?keywords=patricia+seybold+customers.com&amp;qid=1639427171&amp;sr=8-1" target="_blank"><strong><em>Customers.com</em></strong></a>.&nbsp;&nbsp;</p> <p style="text-align: justify;">Anyone who has ever rented a car can tell you that walking into the point of sale and renting a car is a time-consuming and patience-challenging experience filled with lots of waiting and filling out forms. In response, Hertz invented the number One Club (now <a href="https://www.hertz.com/rentacar/member/enrollment/skinnyGold/fast?gclsrc=aw.ds&amp;ds_rl=1249110&amp;gclid=Cj0KCQiAweaNBhDEARIsAJ5hwbfogoadvqufykrx3eqlqbke4-QiDFgyZzdAc4bW2iPvYUIK-J7YO6gaAtK0EALw_wcB" target="_blank">Gold Plus Rewards</a>), which allowed its business customers to leverage the internet and a newly developed Hertz CRM. Customers could provide all the needed information for a car rental in advance (e.g., credit card, driver&#39;s license information, flight info, car preference, etc.) and book rentals online. This new process allowed customers to go to the Hertz desk and pick up their keys, walk to their cars, and show their driver&#39;s license information to get out of the lot, saving hours!&nbsp;</p> <p style="text-align: justify;"><strong>Making Your Value Proposition Digital</strong></p> <p style="text-align: justify;">The pain points for renting a car as a busy professional were waiting to check-in at the rental desk, then having to fill out reams of paper forms. Once I had signed up for Hertz Number One club, I never had to fill out another rental form. Once a member, I never switched, even when Hertz charged more than its competitors. It was worth it to me. Hertz had created a value proposition that served&nbsp;my need for check-in speed. Here is the <em>new</em> Hertz value proposition.&nbsp;&nbsp;&nbsp;<a href="https://www.helpscout.com/blog/value-proposition-examples/" target="_blank"><em>As a persona type <strong>[busy management consultant]</strong>, I need help doing something important&nbsp;<strong>[quickly checking in and picking up my rental]</strong> so that I can achieve my goal <strong>[efficiently leave the airport and drive to see my client].</strong></em></a><i>&nbsp;</i>Voila<em>,</em>&nbsp;a new&nbsp;<a href="https://www.wordstream.com/blog/ws/2016/04/27/value-proposition-examples" target="_blank">value proposition</a>&nbsp;using systems integration, is born!</p> <p style="text-align: justify;"><strong>Why APIs Are Important</strong></p> <p style="text-align: justify;">API stands for&nbsp;<em>Application Programming Interface</em>. For your application&nbsp;to integrate&nbsp;easily with business partners, you will need engineers who are good at developing APIs or other easy, secure methods for integrating with partners. Here&#39;s an example to explain why. Online insurance comparison engine and independent insurance agency Answer Financial offers comparison shopping tools for auto and homeowner&#39;s insurance. These tools allow customers to compare quotes from many different auto insurance companies at a time. To achieve the ability to compare quotes from many companies [all of whom have different pricing algorithms] nearly instantaneously, Answer Financial needed to create&nbsp;<a href="http://www.prweb.com/releases/2006/06/prweb390723.htm" target="_blank">a digital standard end-to-end interface between Answer&#39;s system and insurance companies</a>. This standard was a significant step for the property and casualty insurance industry permitting Answer to integrate with its major insurance carrier partners and winning it an industry award in the process! Two different insurers can differ by as much as $500 in the same consumer rate for the same term. By integrating to provide an easy way to compare rates, Answer Financial&nbsp;allows customers to benefit from integration with its insurance carrier suppliers.</p> <p style="text-align: justify;"><strong>Now It&#39;s Your Turn</strong></p> <p style="text-align: justify;">What are some examples of successful systems/partner integrations from your business? How did you achieve them?</p> 15Small Company + Big Data = Huge Impacthttps://ronrassociates.com/Rons-Blog/PostId/11/small-company-big-data-huge-impactConversion,Conversion Improvement,Customer Relationship Management,Nonprofit ManagementWed, 28 Aug 2019 17:23:49 GMT<p style="text-align: justify;"><strong>Using Big Data to Better Serve Customers, Donors and Prospects</strong></p> <p style="text-align: justify;">You&#39;ve completed an analysis of your customers or donors. You know which customers are profitable.&nbsp;Or, if you are a nonprofit, you know which donors are most supportive of your cause.</p> <p style="text-align: justify;">But you still have an incomplete picture of those individuals as people. Where do they live? Where do they shop? Where do they work? Who are their friends? How do they spend their free time? With what organizations are they affiliated? What other, perhaps related products do they buy? In short, you still need an understanding of their demographics and behavioral traits. How else can you go out and find more of these profitable customers? It is on these occasions that Big Data becomes the marketer&rsquo;s friend.</p> <p style="text-align: justify;"><strong>Go Fish?</strong></p> <p style="text-align: justify;">Here&#39;s how the process works. Take email addresses, phone numbers, names, social security numbers, or other identifying information. With permission, of course, use this information, you&nbsp;<em>do</em>&nbsp;know to reference more data in a data vendor&#39;s warehouse about what you&nbsp;<em>don&#39;t&nbsp;</em>know. Tap the database to find information about essential attributes like age, income, mailing address, location, driving record, credit, or assets. Select the variable based on what is useful to your business intelligence needs. Analyze and summarize&nbsp;<em>those attributes</em>&nbsp;to inform your marketing strategy and boost marketing performance.</p> <p style="text-align: justify;">By enabling this kind of analysis, Big Data allows marketers to understand customers deeply. Even better, with predictive modeling, marketers can even predict how likely customers or users are to buy or donate in the future. The Gartner Group surveyed its Gartner Research Circle members worldwide. The technology research firm found that most (73%) of those surveyed in its customer base planned to use Big Data in the future.[i] The bottom line? Smaller organizations are going to have to develop similar information to compete.</p> <p style="text-align: justify;"><strong>A Toe In The Water --- Social Media Custom Audiences</strong></p> <p style="text-align: justify;">Facebook and LinkedIn provide small business advertisers alternatives to buying data about customers. Instead, Facebook advertisers can upload CSV files with email addresses of customers. If the emails uploaded match those of their members, Facebook will place advertisements in the members&#39; timelines. Similarly, LinkedIn allows users to provide lists of company names. Marketers can advertise to LinkedIn, its members who work for those companies. See information on LinkedIn&rsquo;s Service&nbsp;<a href="https://business.linkedin.com/content/dam/me/business/en-us/marketing-solutions/a/targeting/matched-audiences/pdfs/Account-Targeting-Checklist-v01.07.pdf" target="_blank"><u>here</u></a>.)</p> <p style="text-align: justify;">It gets better. With the&nbsp;<a href="https://www.facebook.com/business/a/custom-audiences" rel="nofollow noopener" target="_blank"><u>Facebook</u></a>&nbsp;<em>custom audience tool,</em>&nbsp;marketers develop ads for&nbsp;<u><a href="https://www.facebook.com/business/a/lookalike-audiences" rel="nofollow noopener" target="_blank">&ldquo;lookalike&rdquo; audiences</a></u>. These audiences have similar demographics to those of existing customers. So, identify a list of profitable customers, donors, or B2B companies you currently serve. Upload them to the appropriate social media platform. Then, let&nbsp;<em>their</em>&nbsp;data scientists take care of the rest. Cool right?</p> <p style="text-align: justify;"><strong>Facebook Partners</strong></p> <p style="text-align: justify;">The behind-the-scenes magic that has allowed social media marketing to work so well for Facebook has been a database of&nbsp;<a href="https://wapo.st/2bz22Cb?tid=ss_mail&amp;utm_term=.0e8310059f20" rel="nofollow noopener" target="_blank"><u>98 attributes.</u>&nbsp;</a>Facebook worked with its data partners, companies like Experian, Epsilon, and Oracle Data Cloud. They helped Facebook complete its detailed knowledge of us. We members give Facebook our age, gender, location, education, relationship status, and employment. We do this to improve our connections with former classmates, colleagues, and friends. Our likes tell Facebook how we feel about many topics. Yes, Facebook knows our politics, our hobbies, our true loves, our family, and even our musical tastes.</p> <p style="text-align: justify;">To this, Facebook&rsquo;s Data Partners program concatenated information from large data providers. How many credit cards do we have? What kinds of restaurants do we frequent? How likely are we to move? Are we likely to buy a new car?</p> <p style="text-align: justify;">The Facebook data and target market interface gave even the smallest businesses the targeting power of big companies. For small businesses, gaining affordable, easy access to this kind of data was revolutionary. It democratized Big Data. A small restaurant or hotel had access to the same information as so its national chain competitors across the road.</p> <p style="text-align: justify;">That was true until recently. The controversy over the&nbsp;<u><a href="https://www.nytimes.com/2018/04/04/us/politics/cambridge-analytica-scandal-fallout.html" rel="nofollow noopener" target="_blank">Cambridge Analytica Affair</a></u>&nbsp;dragged social media executives before Congress. Other challenges included the new Privacy Rules in the European Union (<a href="https://en.wikipedia.org/wiki/General_Data_Protection_Regulation" rel="nofollow noopener" target="_blank"><u>GDPR</u></a>). Facebook announced it was phasing out access to its Data Partners this year. (See Facebook&rsquo;s short Partner Categories Article&nbsp;<a href="https://www.facebook.com/business/help/298717656925097" rel="nofollow noopener" target="_blank"><u>here</u></a>.)</p> <p style="text-align: justify;">Despite the change in policy, we think Facebook will continue to be an excellent advertising resource for small businesses targeting consumers.&nbsp;LinkedIn remains the most effective way to target B2B customers by industry and position affordably.&nbsp;&nbsp;Both platforms will allow small companies to pinpoint critical segments in their customer base&nbsp;<em>affordably</em>.</p> <p style="text-align: justify;"><strong>Large Data Purchase - 100 Attributes for Under $1.00</strong></p> <p style="text-align: justify;">Plan B is to buy your own demographic or propensity data. And there is lots of it available out there. A typical database vendor such as Acxiom, LexisNexis, Choice Point, or Trans Union has hundreds of pieces of information for sale. This information is gathered from many providers and sources, then cross-indexed and cross-referenced. Here is a link to one provider, USADATA (also branded as&nbsp;<a href="https://www.usadata.com/" rel="nofollow noopener" target="_blank"><u>MyAcxiomPartner.com</u></a>). USA DATA has a self-serve data mart targeting small and medium-sized businesses. We expect more small business-focused offerings from other large data providers in the future. Make no mistake.&nbsp;The market will find a way to fill the void left by Facebook&rsquo;s policy changes.</p> <p style="text-align: justify;"><strong>Big Data - A Fundraiser&#39;s Life Blood?</strong></p> <p style="text-align: justify;">Big Data is also crucial in the nonprofit fundraising sector. CRM vendors to nonprofits offer a series of services using Big Data. These services include data cleaning through the US Postal service relocation database. They also provide wealth indexing, and Social Security sweeps for recent deaths.</p> <p style="text-align: justify;">An example is Blackbaud Group&#39;s Raiser&#39;s Edge product.[ii] The Blackbaud Group integrates the Raiser&#39;s Edge Product and ResearchPoint databases. This integration allows fundraisers to access information about prospective donors, such as net worth.</p> <p style="text-align: justify;">Want more? They can access even more granular information, as well. What securities do they own? What real estate properties do they own? What are some of their other sources of wealth?[iii] The Research Point integrated data service also provides data about a prospect&#39;s past giving. It also can provide information on prospective donors&#39; Board Relationships. The software even identifies people who live near the prospect who might be donors as well. For fundraisers seeking high net worth donors, these kinds of tools can be invaluable.</p> <p style="text-align: justify;"><strong>Computer, &quot;Go find this customer&rsquo;s VIN, please.&quot;</strong></p> <p style="text-align: justify;">Insurers, banks, and other financial services institutions also use Big Data. Big Data allows them to make quick decisions about selling us insurance or lending us money. Insurance companies can buy underwriting data about prospective customers and can use that data, so the customer doesn&#39;t have to remember it or enter it themselves. Here&rsquo;s an example of how consumer database information was applied to improve customer experience.</p> <p style="text-align: justify;">A client in the auto insurance industry was having difficulty keeping customers engaged. Customers had to fill out 100-question application forms to purchase auto insurance. Users couldn&#39;t for the life of them remember one piece of information needed to quote the risk accurately. Who do you know who can remember their vehicle identification number (VIN)? (The VIN is a 17-digit alphanumeric number appearing on the left of corner of the windshield.) Our client studied the drop-off of users. Many who were requested to provide their vehicle identification numbers departed, never to return.</p> <p style="text-align: justify;">It was clear. The client could increase the number of completed applications. How? Get the VIN from data warehouse vendors. Don&#39;t force the customer to provide the information she doesn&#39;t have easily accessible. Instead, pull the data out of the cloud. Then ask customers to confirm a picture of their make and model. Large insurers are learning that the best way to pull customers through the online sequence is to purchase as much data as they can. Recent competition among auto insurance sellers to have the shortest quote time is an example of this trend.</p> <p style="text-align: justify;">Here are two more examples from a&nbsp;<a href="https://www.inc.com/magazine/201407/kevin-kelleher/how-small-businesses-can-mine-big-data.html" rel="nofollow noopener" target="_blank"><u>recent article</u></a>&nbsp;in Inc. Magazine. Carvana, a mid-sized and entrepreneurial used car dealership, employs five data scientists. They held an online Kaggle competition to solve a complex analytical problem. Carvana asked the data science community for help in developing a better way to predict whether cars purchased at auction were lemons. The data model allowed Carvana to buy higher-quality cars &quot;for $500 below what similar cars would sell for.&quot; The same article shared how a zoo in Tacoma, Washington, was able to save money on staffing. Zoo management correlated local climate data with attendance peaks and valleys. The resulting analysis allowed them to build a better staffing model, saving the organization thousands. The zoo later improved membership by 13 percent by upping its marketing spend in the zip codes of its most frequent guests.[iv]&nbsp;All of the preceding was thanks to the application of Big Data to small/medium-sized business problems.</p> <p style="text-align: justify;"><strong>Why Math Is Our Friend</strong></p> <p style="text-align: justify;">So how do the professional data &#39;wranglers&#39; do this? Does your company have large amounts of data about its customers? Can you afford to purchase more data about them? If so, here are some examples of techniques from a favorite article by two FICO data scientists in&nbsp;<a href="http://analytics-magazine.org/consumer-insight-driving-profitability-with-retail-analytics/" rel="nofollow noopener" target="_blank">Analytics Magazine</a>. Even if you aren&#39;t the one doing the analytics, you can benefit from understanding how these analytical techniques apply to your marketing. We summarize the methods in the below infographic; then explain them in more detail in the body of the article.</p> <p style="text-align: justify;"><img data-li-src="https://media.licdn.com/dms/image/C4E12AQG_CzlsXVkvRw/article-inline_image-shrink_1500_2232/0?e=1572480000&amp;v=beta&amp;t=1IrdnidBCGgpojH3HEXg72bcylzF3nHE8BUM3iQEuOM" data-media-urn="" src="https://media.licdn.com/dms/image/C4E12AQG_CzlsXVkvRw/article-inline_image-shrink_1500_2232/0?e=1572480000&amp;v=beta&amp;t=1IrdnidBCGgpojH3HEXg72bcylzF3nHE8BUM3iQEuOM" /></p> <p style="text-align: justify;">&nbsp;</p> <p style="text-align: justify;"><strong>Clustering Algorithms</strong>&nbsp;offer the opportunity to create broad behavioral segments. Examples are animal lovers, people who enjoy traveling by RV, or people who buy only local farmer produce. These clusters bring together large numbers of customers who may be different in other ways, but who may have similar beliefs or tastes. Quite often, retail stores will use this kind of segment information to create decors. Marketers can also use it for product groupings, or in-store departments targeting this segment. They use this technique for cross-selling products. For nonprofits, this kind of segmentation offers obvious opportunities to identify like-minded individuals. These individuals may believe in the non-profit&#39;s mission. But they may not have had the chance to learn about the organization. Here&#39;s another use: translate these segments into keywords. Then, use the keywords to improve online advertising yields and organic search.</p> <p style="text-align: justify;"><strong>Propensity models</strong>&nbsp;are predictive models. These models bring together an extensive line of attributes that are predictive of buying or giving behaviors. For example, Scottish Terrier owners who live in urban environments may be more likely to donate to specific animal-related causes. Sometimes wacky, these predictive models have become a keystone analytic of direct-mail organizations. More recently, online marketers study clickstream data to try to identify when people are ready to engage in a valuable activity. For example, they may be prepared to make a significant purchase or, perhaps, donation. In a world where constant marketing noise is the norm and in which client acquisition costs are soaring, these models can move the numbers. They do this by predicting who will buy or donate so that we can give them a nudge at that golden moment.</p> <p style="text-align: justify;"><strong>Collaborative Filtering</strong>&nbsp;is a way of taking data about existing customers and applying the data to prospective ones. Often called a &quot;look-alike model,&quot; companies can use these models on the Internet to find new customers. Facebook does this with its lookalike audience feature discussed above. Amazon applies this technique with the &quot;customers who bought this item also bought.&quot;[v] The method is also used by entertainment media companies. TiVo Suggestions. Netflix, Yahoo!, and Apple&#39;s Genius also reportedly use it to make their decisions.[vi]</p> <p style="text-align: justify;">A data scientist named Jonathan Goldman, a physics Ph.D. by training, joined LinkedIn in 2006. Legend has it he developed a module that allowed users to see the names of people to whom they were, &quot;Not connected but were likely to know.&quot;<a href="https://fixingleaks-my.sharepoint.com/personal/ron_ronrassociates_com/Documents/Fixing%20The%20Leaks/Blog/Small%20Company_big_data_huge_impact.docx#_edn7" rel="nofollow noopener" target="_blank">[vii]</a>&nbsp;The technique was an immediate success. The discovery reportedly threw LinkedIn into hyper-growth.</p> <p style="text-align: justify;"><strong>Flunked Stats in College?&nbsp;Here&#39;s Technical Help for English Majors!</strong></p> <p style="text-align: justify;">Software as a service solutions (SaaS) offerings is emerging that incorporate many of these analytical capabilities. A Canadian company named&nbsp;<a href="https://canopylabs.com/" rel="nofollow noopener" target="_blank"><u>Canopy Labs</u></a>, for example, provides an online tool-set for marketers. The tools are designed to allow customers to consolidate consumer data and analyze the &ldquo;customer journey.&rdquo; The software includes different kinds of statistical analyses.</p> <p style="text-align: justify;">Another company, called&nbsp;<u><a href="https://www.retentionscience.com/" rel="nofollow noopener" target="_blank">Retention Science</a>,</u>&nbsp;provides a similar online platform. Retention Science claims data cleaning, analysis, and marketing automation on its platform. The software boasts behavioral and transactional profiling. It also offers customer life cycle analysis, and analytics to measure campaign performance.&nbsp;<a href="http://www.insightsquared.com/" rel="nofollow noopener" target="_blank"><u>Insight Squared</u></a>&nbsp;has a product that integrates with QuickBooks, Google Analytics, or Zendesk. Even the mighty IBM&rsquo;s talking artificial intelligence avatar, &ldquo;Watson&rdquo; has gotten into the act. An&nbsp;<a href="https://www.ibm.com/watson-analytics/pricing" rel="nofollow noopener" target="_blank"><u>analytics package</u></a>&nbsp;that starts free and grows with your knowledge and the value created is available under the Watson brand. Thanks to IBM&#39;s big Watson branding advertising push, senior management understands what you are trying to achieve!</p> <p style="text-align: justify;">Solutions like these greatly simplify the analysis. Other solution providers are emerging daily, so shop around.&nbsp;They usually provide engagement teams with human beings who you can call and ask questions about what the data is telling you.</p> <p style="text-align: justify;"><strong>Professional Advisors &ndash; Ask them to focus on &lsquo;Keeping It Real.&rsquo;</strong></p> <p style="text-align: justify;">Like everything else, there is the opportunity for a great deal of puffery in the analysis and interpretation of data. If a service provider overwhelms you with a long concatenation of buzzwords and hard-to-understand terms, find someone else. A plain-spoken expert can do the same work! Our recommendation is to keep it simple, go one step at a time, and get analytical help as you can. Quite often, a local university statistics professor or graduate student would be glad to help. They love a real-life problem on which to test their latest models. If your company&#39;s a little bigger and can afford to hire a data wrangling consultancy, don&#39;t be shy about hiring the right talent. Look for someone with a strong track record with clients like you. Make sure they provide references. Have them include Ph.D.&rsquo;s as well as a few liberal arts-trained executives. Make sure they have led to real value-added for clients like you.</p> <p style="text-align: justify;">Do you know everything you should about your profitable customers? If not, it&rsquo;s time to find out!</p> <p style="text-align: justify;"><strong>Notes:</strong></p> <p style="text-align: justify;">&nbsp;</p> <p style="text-align: justify;"><a href="https://fixingleaks-my.sharepoint.com/personal/ron_ronrassociates_com/Documents/Fixing%20The%20Leaks/Blog/Small%20Company_big_data_huge_impact.docx#_ednref1" rel="nofollow noopener" target="_blank">[i]</a>&nbsp;<a href="http://www.gartner.com/newsroom/id/2848718" rel="nofollow noopener" target="_blank">http://www.gartner.com/newsroom/id/2848718</a></p> <p style="text-align: justify;"><a href="https://fixingleaks-my.sharepoint.com/personal/ron_ronrassociates_com/Documents/Fixing%20The%20Leaks/Blog/Small%20Company_big_data_huge_impact.docx#_ednref2" rel="nofollow noopener" target="_blank">[ii]</a>&nbsp;<a href="https://www.blackbaud.com/fundraising-and-relationship-management/raisers-edge" rel="nofollow noopener" target="_blank">https://www.blackbaud.com/fundraising-and-relationship-management/raisers-edge</a></p> <p style="text-align: justify;"><a href="https://fixingleaks-my.sharepoint.com/personal/ron_ronrassociates_com/Documents/Fixing%20The%20Leaks/Blog/Small%20Company_big_data_huge_impact.docx#_ednref3" rel="nofollow noopener" target="_blank">[iii]</a>&nbsp;<a href="https://www.youtube.com/watch?v=1nRFAGB8DHE" target="_blank">https://www.youtube.com/watch?v=1nRFAGB8DHE</a></p> <p style="text-align: justify;"><a href="https://fixingleaks-my.sharepoint.com/personal/ron_ronrassociates_com/Documents/Fixing%20The%20Leaks/Blog/Small%20Company_big_data_huge_impact.docx#_ednref4" rel="nofollow noopener" target="_blank">[iv]</a>&nbsp;Kelleher, K. (2017). What 3 Small Businesses Learned from Big Data. Retrieved from&nbsp;<a href="https://www.inc.com/magazine/201407/kevin-kelleher/how-small-businesses-can-mine-big-data.html" rel="nofollow noopener" target="_blank">https://www.inc.com/magazine/201407/kevin-kelleher/how-small-businesses-can-mine-big-data.html</a></p> <p style="text-align: justify;"><a href="https://fixingleaks-my.sharepoint.com/personal/ron_ronrassociates_com/Documents/Fixing%20The%20Leaks/Blog/Small%20Company_big_data_huge_impact.docx#_ednref5" rel="nofollow noopener" target="_blank">[v]</a>&nbsp;New Advances in Intelligent Decision Technologies: Results of the First KES International Symposium IDT&#39;09 (Google eBook) Kazumi Nakamatsu, Gloria Phillips-Wren, Lakshmi. Jain, Robert J. Howlett Springer Science &amp; Business Media, Apr 28, 2009 - Computers - page 103.</p> <p style="text-align: justify;"><a href="https://fixingleaks-my.sharepoint.com/personal/ron_ronrassociates_com/Documents/Fixing%20The%20Leaks/Blog/Small%20Company_big_data_huge_impact.docx#_ednref6" rel="nofollow noopener" target="_blank">[vi]</a><a href="https://fixingleaks-my.sharepoint.com/personal/ron_ronrassociates_com/Documents/Fixing%20The%20Leaks/Blog/%20http:/sloanreview.mit.edu/article/the-prediction-loverrs-handbook/" rel="nofollow noopener" target="_blank">&nbsp;http://sloanreview.mit.edu/article/the-prediction-loverrs-handbook/</a></p> <p style="text-align: justify;"><a href="https://fixingleaks-my.sharepoint.com/personal/ron_ronrassociates_com/Documents/Fixing%20The%20Leaks/Blog/Small%20Company_big_data_huge_impact.docx#_ednref7" rel="nofollow noopener" target="_blank">[vii]</a>&nbsp;Davenport, Thomas H., and D. J. Patil. &quot;Data Scientist: The Sexiest Job of the 21st Century.&quot; Harvard Business Review 90, no. 10 (October 2012): 70&ndash;76. See&nbsp;<a href="https://hbr.org/2012/10/data-scientist-the-sexiest-job-of-the-21st-century/" rel="nofollow noopener" target="_blank">https://hbr.org/2012/10/data-scientist-the-sexiest-job-of-the-21st-century/</a></p> <hr />11The Amazing Healing Power of Customer Lifetime Valuehttps://ronrassociates.com/Rons-Blog/PostId/9/the-amazing-healing-power-of-clvConversion,Conversion ImprovementWed, 28 Feb 2018 05:52:00 GMT<p style="text-align: justify;"><span style="font-size:larger;"><strong>The Symptoms</strong></span></p> <p style="text-align: justify;"><span style="font-size:larger;">The symptoms are often the same.&nbsp; A company achieves early success, growing rapidly, adding products, services, and distribution channels as it reaches scale.&nbsp;Usually, a private equity-backed for-profit company or a dynamic nonprofit, there is intense pressure from the Board for this organization to grow fast.&nbsp; Suddenly, after a few years of rapid growth, the organization starts to founder and, with the entrance of competitors or other changes in the competitive environment, the organization begins to hemorrhage cash.&nbsp; Management doubles down, focusing on improving conversion and lowering acquisition costs.&nbsp; The Board begins to ask questions about the business model, and management is sent off in&nbsp;many directions at once to explore seemingly random options.&nbsp;</span></p> <p style="text-align: justify;"><span style="font-size:larger;"><strong>What&#39;s Going on With Our Profitability?</strong></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Sound familiar?&nbsp; What to do?&nbsp;&nbsp; We tell companies to return to first principles.&nbsp; Think back to what made the Company successful.&nbsp; Then, use a per-customer profitability metric called&nbsp;<strong>Customer Lifetime Value (CLV)</strong>&nbsp;to help diagnose what is going on now.&nbsp; Here are some recent examples where CLV has effectively identified sources of lost profits:</span></p> <ul> <li style="text-align: justify;"><span style="font-size:larger;">A Midwestern online insurance site drives acquisition costs down by focusing on high-converting online leads.&nbsp; A CLV analysis identifies customer segments with very high conversion rates but which are losing the company money.&nbsp; The study shows the negative CLV customers are not keeping their policies post-purchase, robbing the company of valuable renewal commissions critical to favorable LTV.&nbsp;</span></li> <li style="text-align: justify;"><span style="font-size:larger;">A </span><span style="font-size:larger;">healthcare</span><span style="font-size:larger;"> services outsourcing company spends tens of thousands of dollars acquiring corporate customers only to see per-client utilization and profitability drop, and many of its client accounts churn.&nbsp; An analysis </span><span style="font-size:larger;">of</span><span style="font-size:larger;"> the business models of positive CLV customers identifies profitable and unprofitable institutional profiles, allowing the company to refocus its marketing activities.</span></li> <li style="text-align: justify;"><span style="font-size:larger;">Low CLV customers, many of whom haven&#39;t bought anything at a major department store since Black Friday last year (and likely won&#39;t be back again until next November), are rewarded with steep discounts by being the first in line on Black Friday morning.<a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_edn1">[1]</a>&nbsp; Wharton Professor and Consultant, Peter Fader, suggests, &quot;Stop spending so much precious energy, time and money courting your worst customers...</span><span style="font-size:larger;">Ask yourself [instead]: What can we do now to identify and reward our high-value customers and attract more like them?&quot;<a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_edn2">[2]</a></span></li> </ul> <p style="text-align: justify;"><br /> &nbsp;</p> <p style="text-align: justify;"><span style="font-size:larger;"><strong>Why CLV Analysis Is Effective</strong></span></p> <p style="text-align: justify;"><span style="font-size:larger;">The reason CLV is useful is that it combines five critical elements of customer profitability:&nbsp; 1) revenue, 2) costs, 3) duration of the client relationship, 4) the time value of money, and 5) the value of the client relationship across the&nbsp;<em>entire</em>&nbsp;organization.&nbsp;&nbsp;</span></p> <p style="text-align: justify;"><span style="font-size:larger;">By including the duration of the client relationship, CLV is a terrific antidote to what we refer to as the &quot;<em>Fool&#39;s Gold</em>&quot; of Google AdWords Conversion Metrics.&nbsp;&nbsp; The daily grind to acquire customers or members cheaply leads Management, over time, to focus on how leads perform in terms of conversion and acquisition cost, as measured only by Google.&nbsp; Rare is the organization that builds the critical analytical bridge from its client<strong><em> acquisition optimization</em></strong>&nbsp;to&nbsp;<strong><em>client profitability optimization. </em></strong> How long do customers stay around? How frequently do they come back? How much additional revenue do they generate once you acquire them?<a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_edn3">[3]</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><strong>Lessons from Amazon</strong></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Picking up a thread from a previous post, Amazon.com provides a great example of Customer Relationship Management (CRM) and the management of Customer Lifetime Value.&nbsp; A money loser for much of its corporate history, Amazon has grown </span><span style="font-size:larger;">its</span><span style="font-size:larger;"> per-customer revenue, in part by investing in, and managing CLV across its&nbsp;<em>entire</em>&nbsp;platform.&nbsp; For example, in a 2012 interview, Jeff Bezos admitted that Kindle Paper White Readers and the Kindle Fire were sold at cost to capitalize on future sales of books and other content.<a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_edn4">[4]</a>&nbsp;&nbsp;The same interdependency applies to its Prime Memberships.&nbsp; (For the uninitiated, Prime members pay Amazon an annual membership fee &ndash; usually about $70-$80 to gain access to a yearly menu of free services including free two-day shipping, access to movies and books, and discounts on a variety of Amazon.com products.)&nbsp; A 2013 study by the Consumer Intelligence Research Partners, showed Amazon Prime members spend $1,340 annually -- more than twice as much as non-Prime shoppers, who spend $650 annually.&nbsp;&nbsp; Fool.com investment analyst, Brendan Mathews, made a back-of-the-envelope estimate in a 2014 article showing that the CLV of a Prime Member was approximately 2.5 times that of non-Prime customers or $2,283 for members versus $916 for non-Prime members.<a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_edn5">[5]</a>&nbsp; No wonder the investment community post-2014 greeted Amazon&#39;s strategy to grow the Prime membership base with such enthusiasm!&nbsp; Today, in 2016, when Amazon drives Black Friday promotions to add Prime Members, what does it provide </span><span style="font-size:larger;">as</span><span style="font-size:larger;"> an </span><span style="font-size:larger;">incentive</span><span style="font-size:larger;">?&nbsp; Discounts on Alexa, a voice command-driven device, which, among other things, allows users to purchase audio content quickly, and, of course, facilitates shopping on Amazon.com.<a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_edn6">[6]</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><strong>Identifying Technologies That Lock-in Downstream Profits</strong></span></p> <p style="text-align: justify;"><span style="font-size:larger;">The Amazon.com example brings to light another critical aspect of CLV analysis: the CLV metric can be used in companies with many different technologies and verticals to manage and grow profitable business interdependencies, which improve lifetime profits for the&nbsp;<em>entire</em>&nbsp;company.&nbsp; Unlike many other more mono-dimensional metrics, CLV analysis can underscore business activities or technologies which lock in benefits for other businesses in the corporate portfolio.&nbsp; So, it is with Amazon: per a 2012 BBC Interview with Amazon CEO Jeff Bezos, Kindle purchasers buy four times more books;<a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_edn7">[7]</a>&nbsp;In the same way, Kindle Fire owners watch more movies</span><span style="font-size:larger;">, and</span><span style="font-size:larger;"> Alexa users presumably listen to and buy more music.</span></p> <p style="text-align: justify;"><span style="font-size:larger;"><strong>How to Make the CLV Calculation</strong></span></p> <p style="text-align: justify;"><span style="font-size:larger;">How is the CLV number calculated?&nbsp;&nbsp; To make the CLV calculation, Management needs to analyze client acquisition date, all revenue associated with the client account, the imputed costs related to each client, and the&nbsp;<em>duration</em>&nbsp;of the relationship with each client. &nbsp;For each of the clients, attribute as accurately as possible all costs associated with acquiring&nbsp;that customer. Add in the expenses of servicing that customer. If the organization needs to reacquire the customer through additional marketing to achieve further, repeat sales, the costs of this activity must be added in as well.&nbsp;&nbsp; Use this data to calculate an operating profit for each customer over the life of the relationship.&nbsp;</span></p> <p style="text-align: justify;"><span style="font-size:larger;">Once Management has computed an operating revenue for the customer, they use their organization&#39;s weighted average cost of capital to discount these cash flows. For most retail organizations, this analysis may go out only a few years; however, financial services firms like the one described above must recover very high costs of client acquisition.&nbsp; For these companies, the analysis will need to go out much further &ndash;&ndash; as many as seven years or even a decade if the data are available. Many theoreticians will spend a great deal of time and energy debating how this number is best calculated (see our notes to this article for links to authoritative writings on this topic). <a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_edn8">[8]</a>&nbsp;Our focus (and yours) should be more ongoing through the exercise of identifying costs, how costs are different for different customers, and, most important of all,&nbsp;<em>how long</em>&nbsp;those customer relationships last.</span></p> <p style="text-align: justify;"><span style="font-size:larger;"><strong>CLV for Nonprofits</strong></span></p> <p style="text-align: justify;"><span style="font-size:larger;">Can CLV be applied to nonprofits?&nbsp; Absolutely.&nbsp; Here again, the analyst in the nonprofit setting needs to look at each direct marketing campaign, online promotion, or event as an investment of both money and volunteer time, the fruits of which result in the acquisition of a donor whose contributions hopefully stretch out for years.&nbsp; Except for a few quirks like ascribing a dollar cost to volunteer time and changing around data to show donors as a revenue stream, the CLV math will be substantially the same for the nonprofit as it is for a for-profit institution.<a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_edn9">[9]</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;">It is in the &#39;identify customer segments&#39; step where art meets science.&nbsp; After the initial customer lifetime value calculation is complete, segment the customer base into groups. To do this, identify common traits highly correlated with profitable and unprofitable customers. The goal here is to create groups with shared attributes that behave in predictable ways to generate profits or losses to your organization.</span></p> <p style="text-align: justify;"><span style="font-size:larger;"><strong>Torturing the CRM Data Until the CLV Confesses</strong></span></p> <p style="text-align: justify;"><span style="font-size:larger;">It is in this exercise that your CRM truly pays for itself.&nbsp; The more robust your customer database, the better the inferences you will be able to draw from your Customer Lifetime Value analysis.&nbsp; This activity may require some detective work on your part and may require you to obtain additional customer data to test hypotheses about the sources of lost profitability.&nbsp; &nbsp;&nbsp;</span></p> <p style="text-align: justify;"><span style="font-size:larger;">When the results come in, be prepared to throw conventional wisdom out the window.&nbsp;&nbsp; Three findings most surprise executives making this calculation for the first time:</span></p> <ol> <li style="text-align: justify;"><span style="font-size:larger;">How long it takes the organization to make a client relationship profitable;</span></li> <li style="text-align: justify;"><span style="font-size:larger;">How many more clients are&nbsp;<em>unprofitable</em>&nbsp;than you initially thought;</span></li> <li style="text-align: justify;"><span style="font-size:larger;">How clients, donors, activities, or even distribution channels, once thought to be productive, are, under the cold, harsh, light of CLV analysis,&nbsp;<strong>not</strong>&nbsp;profitable at all.</span></li> </ol> <p style="text-align: justify;"><br /> &nbsp;</p> <p style="text-align: justify;"><span style="font-size:larger;"><strong>Be Prepared to Be Amazed</strong></span></p> <p style="text-align: justify;"><span style="font-size:larger;">The results of CLV analysis can be powerful and company-saving.&nbsp;&nbsp; Imagine, for example, the surprise of a CEO of a hospital services company when he realized each new account he added cost tens of thousands of dollars in marketing expenditures to develop and almost two years to reach breakeven.&nbsp; Imagine learning that your best-converting leads are the ones that generate the least revenue or, worse, are the ones causing your company to lose money!<a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_edn10">[10]</a>&nbsp;&nbsp;Imagine being a retail leader and learning, &quot;On top of all the stress of opening up early, paying employees for extra hours, preparing contingency plans if things go awry, and spending a ton on advertising and PR [for Black Friday retail activities] &hellip;. it&#39;s not even as good as a lottery ticket: at best, your Black Friday sales won&#39;t disappoint you.&quot;<a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_edn11"><sup>[11]</sup></a>&nbsp; &nbsp;</span></p> <p style="text-align: justify;"><span style="font-size:larger;">These examples are just a few of the insights that have come from CLV analyses.&nbsp; They have permitted companies to refocus their activities by focusing on their&nbsp;profitable customers.&nbsp;&nbsp;</span></p> <p style="text-align: justify;"><span style="font-size:larger;">What will&nbsp;<em>you</em>&nbsp;learn from CLV analysis?</span></p> <p style="text-align: justify;">&nbsp;</p> <p style="text-align: justify;"><span style="font-size:larger;">&lt;&lt;&lt;&gt;&gt;&gt;&nbsp;</span></p> <p style="text-align: justify;"><br /> &nbsp;</p> <p style="text-align: justify;"><span style="font-size:larger;"><a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_ednref1">[1]</a>&nbsp;See Wharton Marketing Professor, Peter Fader&#39;s,2016 article in Forbes Magazine,&nbsp;<a href="http://www.forbes.com/sites/groupthink/2016/11/22/is-black-friday-the-best-day-to-meet-your-worst-customers/#4d254ca66dc4">http://www.forbes.com/sites/groupthink/2016/11/22/is-black-friday-the-best-day-to-meet-your-worst-customers/#4d254ca66dc4</a>.</span></p> <p style="text-align: justify;"><span style="font-size:larger;"><a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_ednref2">[2]</a>&nbsp;Ibid.</span></p> <p style="text-align: justify;"><span style="font-size:larger;"><a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_ednref3">[3]</a>&nbsp;We hasten to point out that this is not Google&#39;s fault. The AdWords toolset provides user plenty of tools to correlate costs of acquisition and other metrics to leads conversions.&nbsp; &nbsp;</span></p> <p style="text-align: justify;"><span style="font-size:larger;"><a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_ednref4">[4]</a>&nbsp;See&nbsp;<a href="http://www.forbes.com/sites/kellyclay/2012/10/12/amazon-confirms-it-makes-no-profit-on-kindles/#7a2cb2d14dc7">http://www.forbes.com/sites/kellyclay/2012/10/12/amazon-confirms-it-makes-no-profit-on-kindles/#7a2cb2d14dc7</a>&nbsp;and&nbsp;<a href="http://www.businessinsider.com/amazons-profits-what-people-dont-understand-2013-10">http://www.businessinsider.com/amazons-profits-what-people-dont-understand-2013-10</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_ednref5">[5]</a>&nbsp;See Brendan Mathews 2014 article on Fools.com&nbsp;<a href="http://www.fool.com/investing/general/2014/04/21/whats-a-prime-member-worth-to-amazoncom.aspx">http://www.fool.com/investing/general/2014/04/21/whats-a-prime-member-worth-to-amazoncom.aspx</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_ednref6">[6]</a>&nbsp;See&nbsp;<a href="http://www.ibtimes.com/amazon-black-friday-deals-prime-members-get-alexa-exclusive-access-2448067">http://www.ibtimes.com/amazon-black-friday-deals-prime-members-get-alexa-exclusive-access-2448067</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_ednref7">[7]</a>&nbsp;See again,&nbsp;<a href="http://www.forbes.com/sites/kellyclay/2012/10/12/amazon-confirms-it-makes-no-profit-on-kindles/#7a2cb2d14dc7">http://www.forbes.com/sites/kellyclay/2012/10/12/amazon-confirms-it-makes-no-profit-on-kindles/#7a2cb2d14dc7</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_ednref8">[8]</a>&nbsp;For a scholarly discussion on CLV and other profitability metrics, see Kumar, V. (2008-01-10). Managing Customers for Profit: Strategies to Increase Profits and Build Loyalty (Kindle Location 677). Pearson Education. Kindle Edition.&nbsp; Also, for those who don&#39;t mind wading through an equation of two, a great round-up of different CLV calculation methods may be found in the following 2006 JOURNAL OF SERVICE RESEARCH article:&nbsp;<a href="http://www.anderson.ucla.edu/Documents/areas/fac/marketing/JSR2006%280%29.pdf">http://www.anderson.ucla.edu/Documents/areas/fac/marketing/JSR2006(0).pdf</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_ednref9">[9]</a>&nbsp;See for example a 2007 report by Maria Nobles in the Non-Profit</span><span style="font-size:larger;"> Times online,&nbsp;<a href="http://www.thenonprofittimes.com/news-articles/research-examines-true-cost-of-a-solicitation/">http://www.thenonprofittimes.com/news-articles/research-examines-true-cost-of-a-solicitation/</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_ednref10">[10]</a>&nbsp;See the example of Hubspot Case Study, fictionalized in Harvard Business Review,&nbsp;<a href="https://hbr.org/2012/10/target-the-right-market-2">https://hbr.org/2012/10/target-the-right-market-2</a></span></p> <p style="text-align: justify;"><span style="font-size:larger;"><a href="http://www.ronrassociates.com/Lists/Posts/NewPost.aspx?Source=/blog#_ednref11">[11]</a>&nbsp;See previously cited article by Dr. Fader,&nbsp;<a href="http://www.forbes.com/sites/groupthink/2016/11/22/is-black-friday-the-best-day-to-meet-your-worst-customers/#4d254ca66dc4">http://www.forbes.com/sites/groupthink/2016/11/22/is-black-friday-the-best-day-to-meet-your-worst-customers/#4d254ca66dc4</a></span></p> 9