Savvy shoppers wait in anticipation, while Australian retailers are gearing up for the onslaught. Amazon’s arrival is imminent.
Many marketers are relying on the wrong parameters to personalise communications in a digital environment and should be tapping into irrational, emotional and contextual factors to win over today’s customer.
Forrester VP and principal analyst, Shar VanBoskirk, said marketers still commonly apply the science of direct marketing from their offline activities to the digital world. But while demographics information can be useful in a digital context, emotional, contextual or dynamic attributes are more likely to get connected customers to respond to a marketing message, she said.
“For example, I either am or am not a technology optimist, applying technology to my life goals,” VanBoskirk said. “Or it could be dynamic attributes such as the fact that I’m visiting Singapore, or if I’m on a business versus personal trip. Most companies don’t know how to tune into these attributes –they’re looking at dimensions that worked in an offline environment without considering these digital idiosyncrasies that allow them to connect with me in a real-time or situational environment.”
While it sounds like common sense, operationally this can be difficult for organisations to achieve, particularly those who haven’t previously had direct-to-consumer relationships, VanBoskirk said.
“It’s the doing of it that most companies have a lot of trouble with,” she admitted.
VanBoskirk claimed about 2 per cent of marketers globally are “extremely elite” when it comes to personalisation, and are actively producing relevant and targeted individualised campaigns.
“Another 25 per cent are pretty good – they understand the value of segmentation, they’re applying dynamic content to address a particular situation or event to create relevance, or are targeting by location or gender to get more specific as they create communications,” she said. “Everyone else is not – they’re either sending mass communications or they’re misfiring in their approach to be more personalised. As an industry, we’re getting better at this, but there’s a lot of room for a lot of companies to improve.”
Addressing connected, less rational customers
One of the areas VanBoskirk has been exploring in her research is the impact of less rational forces on customer buying behaviour and decision making. In her recent research, How People Choose, the analyst claimed digital technologies have made consumers even less rational than they were in a pre-digital age.
“There are many factors we consider when making decisions. Some are rational considerations - such as processing all possible outcomes and choosing based on an ideal outcome - but most of the time we’re heavily influenced by something else,” she explained. “This could be emotional, societal, or just rules of thumb and substitutes for our inability to choose irrationally.
“Digital makes it more likely that you choose in an irrational way. This is because the sheer volume of decisions we have to make creates fatigue. This could be whether to respond to an email, answer SMS, click a link and move to a new page. There are lots of small choices interfering with our mental faculties that were previously dedicated to making big choices. And in environment where customers are facing a multitude of choice, they’re making less rational ones.”
In contrast, marketers treat customers as if they’ve always made rational choices, VanBoskirk claimed, setting a course towards a desired outcome.
“The idea is that if as a marketer, I just push you along that course, and you will make the decision I want you to make,” she said. “It’s not a bad idea to be as prescriptive as you can about pushing people towards an outcome, but you also need to realise there are irrational factors effecting how people choose as well.
“If you can understand other elements that make customers do things, such as brand recognition, habits, emotional responses, then you might get better outcomes in terms of generating a better response from your customers. This is about how you create a more relevant experience for customers based on an understanding that they may do things that are not playing out in a rational way.”
Yet the real-time and very accountable nature of gauging digital marketing success has created a counter movement towards even more rational and conversion-based marketing. While agreeing marketers should be more scientific than they have ever been before, VanBoskirk suggested employing that newly honed scientific approach to a broader set of observations.
“Marketers should be applying that science to things outside transactional cues, or if someone decided to purchase,” she said. “There are other things that happen in response to marketing messages, such as whether I feel a certain way to a certain message, or if am I have an emotional response to certain communications.
“It’s about looking at data as evidence of these irrational responses as well.”
As examples, VanBoskirk recommended studying how people write social media messages to indicate changes in attitude towards a brand, the use of emoticons, or traditional brand metrics and how they highlight changes, indicate stress levels or emotional responses to marketing cues.
“The notion of big data lets us look at things that might be softer response metrics that are helpful to marketers in gauging a holistic response,” she continued. “Not only did I click a link or buy based on an offer, but I also respond in an emotional way.”
According to VanBoskirk, this shift makes branding critical in building customer engagement.
“Marketers innately knew that, but we have swung so far to the direct response side because digital allows for that, that it’s excused a lack of branding for many companies,” she said. “Most of the time, consumers make decisions based on brand recognition or habit, not coercion towards a transaction. It’s based on what’s familiar, or what they or their friends have done in the past.
“More important than almost anything else is establishing a brand that pops into the user’s mind when they can’t think of anything else. If you can make your company, product or service that default option, that’s a valuable place to be. Branding matters a lot in establishing your offering as the path of least resistance for a consumer.”
Technology’s role in digital marketing
The rise of digital marketing and connected consumers hasn’t just changed the customer-brand dynamic, it’s also seeing marketing functions increasingly reliant on IT to make all of this personalisation possible.
For VanBoskirk, the core ingredient in getting the CMO and CIO to work together successfully is shared, customer-oriented objectives.
“IT traditionally has been very focused on internal statistics such as cost, systems uptime or internal productivity applications,” she pointed out. “If the enterprise is shifting to more customer-focused outcomes, then IT has to be gauged on supporting these objectives. That then gives them an ability to respond to marketing tasks over some internal productivity asks.
“For most companies to date, the two functions are not goaled on the same things.” At the same time, marketers should be actively seeking out better conversations with IT. To do this, VanBoskirk said the challenges of language and collaboration have to be overcome.
“It is marketing’s responsibility to create some better collaboration with IT. Many marketers have just skipped over IT and gone to an agency or vendor because they think IT won’t get it,” she said.
“Marketers owe it to themselves and their enterprise to have better conversations with IT. This can play out in a few ways. Some companies do job share, where marketers are put in IT on purpose to help them speak the language and get to know their colleagues. It’s hard to have an antagonistic relationship with someone you sat next to for six weeks. Or it could be putting processes in place or goals focused on improving collaboration.
“Marketers have to get to a point where they don’t just ‘end run’ the IT organisation by skipping immediately to an outsourced option, but at least communicate with their technology resources. It’s in their best interests to leverage what’s available internally first.”
This doesn’t meanmarketing wholly goes over to a technology enabled function, however, VanBoskirk said.
“Creativity and idea development matters, and the softer pieces still matter and marketing must continue to focus on them,” she added.
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