What being a data-driven brand really means to Adore Beauty

Chief marketing officer at Australian ecommerce beauty retailer details the data-driven business journey and his lessons in customer lifetime value

Being data-driven is BAU for an online-only retailer like Adore Beauty, its CMO, Dan Ferguson says.

“It’s in how we measure our marketing, how we measure how effective spend is, how our customers are joining us, and also to a certain extent in how we measure the impact we have on our customers and if they are interested in what we are doing,” he says.  

But it’s not the be-all-end all, and Ferguson sees a contradiction in being too data-obsessed as a brand.

“If you are driving your brand in a data-led way, it can sometimes mean you overlook opportunities to nurture and encourage things that are best reflections of your brand,” he tells CMO.  

Which is why this marketing is setting aside some traditional measurement methods, and instead looking to holistic customer lifetime value and brand to gauge success.

“That means we’re focusing not just on immediate return, or commercial gain short-term, but looking for what customers are engaging in and what sets them alight, and what they care about. It’s challenging ourselves to become more authentic,” Ferguson says.

“I know that’s a real buzzword, but it’s about understanding who our customer is, identifying them and talking to them as a person, seeing what they are interested in across social, content and all the various marketing channels and what drives interest, then developing our brand and interactions in that direction.”

Leading with data

The intention of better tuning into customer behaviour has guided Adore Beauty’s more recent investments into data and digital marketing sophistication. Over the last two years, the company has shifted its ecommerce-driven mindset to building a comprehensive data picture business-wide in order to improve effectiveness.

A step forward was creating a data team from scratch, initially in the marketing function, but now working across the organisation. A program of work also united streams of customer data into the one Emarsys orchestration system. Prior to Ferguson joining in late 2017, Adore Beauty was running data through Magento and could do basic segmentation with Emarsys, but didn’t have a centralised customer data view.

“We started with the Emarsys platform as the source of customer data and interactions, so we can see engagement around campaigns, and can change how we speak and who we speak to on that basis,” Ferguson explains. “Then we’ve used partners like AWS [QuickSight] and other connector technologies to bring data from our Magento ecommerce and Google platforms, plus our Tealium tag data, into one central platform. It’s matched in real-time with customer products, transactions and onsite interactions.”

From a personalisation perspective, this helps in a number of ways. Firstly, Adore Beauty is personalising product and content in emails as well as through onsite experiences using a customer’s transaction and membership history.

“The next steps are around what we call ‘beauty wise’ – using all the different signals and how customers interact with us online to start to inform site presentation layer, from content to offers and chat,” Ferguson says. “That’s about becoming cognisant of everything the customer is doing.

“We’ll include what we already know about them, as well as what they are doing on the site. That’s in contrast to asking a customer what are the seven things they like. I think you need to earn the right to ask these questions.”

It’s Ferguson’s belief brands should be as intuitive with digital approaches as they once were in-store. “If we were in a physical store, we would be seeing their behaviour and adjusting accordingly. This [capability] allows us to also that in real time onsite,” he says.   

Dynamically tailoring Adore’s onsite content using signals of behaviour requires additional partners, such as Tealium. “It’s also about the presentation layer on our site, which has significantly changed in the last year,” Ferguson explains.  

On top of this, Adore Beauty’s CTO has been working towards headless commerce to improve the group’s digital platforms.

Data has also been informing the content Adore Beauty produces. For instance, the brand’s first video attempts for social were highly produced and looked much like many videos delivered by the beauty industry.

“Fast forward two years, and the videos we find have standout engagement are things like beginners masterclasses featuring our beauty editor talking to experts and beginners about beauty, what they think is funny and road bumps along the way,” Ferguson says. “It’s a real insight into how women engage in beauty. And our engagement is an order of magnitude higher than those original videos as a result.”

Commercial impact

For Ferguson, it’s what you do with data that makes the biggest difference. In Adore Beauty’s case, this meant asking the business upfront how data can help solve specific challenges or opportunities, and what the order of commercial impact should be.

“How does this affect customers? And importantly, if it’s solved, what does that answer look like? And if we have the answer, is the person able to carry it away and start using it?” Ferguson asks. “For example, telling someone your best customers spend 2.2 times more than lower spending customers - how are we going to use that?”

Helping Adore Beauty tackle this question is understanding customer lifetime value (CLTV) by individual campaign on a dynamic basis. Ferguson says this allows his team to look for where more new customers are, but also the higher lifetime value customers, and allocate marketing investment accordingly.

“The answer became a multiplier we can add to different campaigns areas to be able to adjust spend,” he says.

“There are key decisions to make as well. For instance, when people want to gain an advantage from data, they’ll often talk in broad terms. For example, someone might say ‘we should be aware of CLTV to improve the way we spend in marketing’. That’s like taking a cake, smashing it up and trying to work out what ingredients were in it.

“The bigger question should be: If we come back with an answer on CLTV, how can we use it to get value on the ground straight away? What is using such data insight going to look like? How can we ensure our initiatives are fit for purpose?”

Ensuring data is fit for purpose sees Adore’s data team working with the area of the business most impacted by their current stream of work.

“Data is often abstracted from a business, but it’s most potent when it’s connected to business need,” Ferguson says. “So if our data team is looking at forecasting, then they are part of the area most impacted by that. That ensures they understand what happens when there’s good versus bad quality forecasting.

“If our data team knows a forecast isn’t accurate, they’ll know we’ll have to use freelancers more, and that it has significant financial impact. And they’ll care more, empathise, and be driven to create a better customer service. 

“I’ve been in organisations with different urgency around data and so many view data as adding reports and insights in meetings. The data person tells teams new things they’ve discovered. That’s not purposeful. You have to think about how you’re going to use the data and with the business challenges in mind.”

What’s more, marketing and technology collaborate on priorities using common goals such as commercial impact.

“Building understanding across departments has helped, and we’re meeting every month to talk about growth initiatives – that’s not just marketing and IT, but also operations, sales, and customer service all coming together,” Ferguson says.  

Brand narrative

As Adore Beauty’s data sophistication grows, Ferguson has one eye on brand narrative. As he points out, the plethora of email offers consumers receive today has progressively increased, making it harder for brands to cut through.

“What’s driving us as consumers isn’t evaluation of benefit, it’s emotional, instinct and affection around a particular brand that counts. Brand again steps out to the forefront,” he argues.  

“So as it becomes table stakes to do digital marketing, marketing automation, do customer lifetime marketing, then the focus comes back to what differentiates you - your tone of voice, value proposition, and purpose as a business.”

Ferguson is looking to therefore strike a balance between activities clearly engaging customers, and achieving brand lift within digital and performance spend. The ultimate aim is reinforcing Adore’s personality, he says. To help, his team commit to allocating a percentage of budget to improving metrics that indicate ‘purposeful’ engagement.

“We want to be your best friend on beauty. To do that, we need to be more honest, authentic and be relatable,” Ferguson says. “That’s seen us change our tone of voice, the way we talk in social, content channels and emails - our video content is an example of this.

“We also know not every product is right for every persona - there’s honesty in catering to that. And it gives us permission to be more relatable.”

As a result, while agreeing there’s justifiable hype about marketing platforms and data, using different lenses of evaluation on performance keeps Adore in balance, Ferguson concludes.

“Start adding targets not just on revenue, but around new customer, and customer lifetime value,” he advises. “It will help you push the business further and more even in moments of great performance.”

Read more of CMO's case studies into online retail brands driving customer engagement:

  1. How digital transformation is helping City Beach connect to customer lifetime value
  2. Using big data analytics to power customer lifetime value
  3. How data is driving the customers of a lifetime for BaubleBar
  4. How Forever New boosted online sales
  5. The Iconic: becoming customer-focused transformed the business

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