CMO interview: Intent-based marketing turns Temple & Webster's fortunes around
- 13 March, 2018 07:10
Sven Lindell, Temple & Webster
To amalgamate three brands into one, while simultaneously streamlining costs and improving profitability and customer satisfaction and brand recognition, is no mean feat.
However, this is exactly what Temple & Webster has achieved in two short years. 2017 half-yearly results show the recently floated retail brand improved its net loss after tax and EBITDA by 84 per cent over the previous year, and year-on-year revenue growth from January 1 to February 15 improved 21 per cent.
Added to this, T&W improved its NPS score by 30 per cent, and brand recognition by six points.
Sven Lindell joined Temple & Webster (T&W) as CMO at its lowest point in five years. Revenue was in decline and marketing spend was way over budget. To turn all this around, the company set about consolidating three brands: Wayfair, Milan Direct, and Temple & Webster, into one consumer-facing brand, restructuring the business, and refocusing marketing spend. This was all while simultaneously growing active customers and average order value.
Once Lindell was on-board, he set about streamlining marketing budgets and processes by taking a highly analytical approach to marketing and digital advertising, which had the added benefit of strengthening the brand.
“T&W was a members-only shopping club two years ago. When looking at building a bigger business set to float on the ASX, we decided to bring three brands into one,” Lindell told CMO.
“After a rocky start following the float, I came in to look at how we could restructure and build the business with the new CEO. First, we removed some of the unnecessary duplication within the business. The mission and brand proposition around T&W resonated well with our customer set, and we had a lot of high customer satisfaction. Wayfair had fantastic technology platform and technology stack to build an ecommerce business, and Milan Direct had a really strong private label business and strong connection to the manufacturing space.
“Using the best of all three, it’s taken a good couple of years to amalgamate them. So to grow the business has been a challenge, but we have managed to achieve profit growth while reducing operating costs, which is a huge achievement for any retail brand.”
The benefits of intent-based marketing
T&W had to drill down into what it wanted to focus on. Lindell said a key decision was flipping the marketing strategy to intent-based marketing, which had the added advantage of building the brand. The company also spent a lot of time understanding the SEO and domain authority of existing brands, which pages were ranking for which customers, and making sure as much of that authority flowed through to the single brand as possible.
“I liken it to taking three buckets and pouring them into a new bucket, and making sure the bucket can hold. Part of having the right technology stack that can cope with the amount traffic increase, and from the SEO perspective you’re doing the right thing and transferring as much brand goodwill as possible,” Lindell explained.
“We know bigger is better in the ecommerce market, so ensuring we have the largest range is really important to us. And we wanted to keep the heritage of the T&W brand by building out the most inspirational content in the space, coupled with fantastic delivery and customer service."
Automation and personalisation have been key to this over the past two years, Lindell continued. "That has helped us reduce marketing costs, while still growing the business from a profit and revenue point of view.
“Intent-based marketing is really interesting. Plenty of marketers still focus on the broad ways to acquire customers, but they’re not really using their first-party and third-party data together to understand when a customer comes into market."
To achieve this, T&W looked at partnerships with key data providers, utilising its first-party data to understand what a customer wants and when.
“Logic dictates when customer comes to us, they already have an understanding of roughly what they want. Now they want to know what you can do for them," Lindell said. "Once we see those in-market behaviours happen, our algorithms take over to understand how far those customers are in the funnel and how much we’re prepared to bid to get them back into the fold, or if we need to bid at all.
“This is nothing new these days, but the key is understanding how much you’re willing to spend keeping those customers engaged and to continue bringing them back to the brand."
T&W is tapping analytical modelling to understand when a customer is in-market. Using its first-party data, the team also builds lookalike audiences within the digital sphere, which it can then target based on the right cost per acquisition (CPA) and the right cost per sale (CPS) they want to run to. From there, it employs programmatic display and Google Adwords to target these specific audience groups.
"Because we have such a focus on profitability, we can actually use this to generate an understanding and model around building and introducing those new customers into the business," Lindell said. “For each of the keywords across our 130,000 products, we have hundreds and almost thousands of Adwords campaigns running, and within each keyword, we know what the profitability of that keyword is to us as a business.
“Not a lot of retailers are able to leverage this. We can now understand where to set our bids at to continuously be front-of-mind where we need to be. But we also pull back where we need to. Just because a keyword has a tonne of impressions doesn’t mean it’s profitable to us as a business."
Being able to optimise based on audience enables T&W to better understand how much it is willing to spend to acquire a customer who will purchase from the private label brand, as opposed to a customer who’s going to purchase on other brands that don't have as high a margin attached.
"It does change the dynamics of how you spend, and that has helped us to deliver better marketing economics and still grow the top line," Lindell said.
“Over the last year, we’ve built the platform to understand each event that happens with a customer on the website. That’s how we can get to the heart of intent-based marketing. We know how they act with each individual element on a page, how they scroll, where the mouse moves, and we tag and push that data back into our customer data platform. From there, we build microsegments and from that we’ve got our micro-campaigning, and we automatically push into different marketing channels the most appropriate marketing message and interaction in channel."
Results include a six-point jump in brand awareness year-on-year. "A lot to be said for the movement to intent-based marketing, so when people say to me that’s not going to build the brand, I say that’s not true,” Lindell added.
Amid the amalgamation and cost cutting, T&W also managed to improve its NPS score 30 per cent using what Lindell said is simply better servicing of its customers.
“It’s literally been a slow burn, but we’ve made some fundamental changes to the business," he said. "We now have extended care options throughout the day, expanding our team in Manilla, and just offering more agents on the ground so we can deal with customer queries in real time.
“Thanks to the data, we now also understand who’s calling us and we can see their intent on the website before they engaged with us, so we can get to the heart of the matter really quickly. This means lower handling times, and we can deal with more calls, live chat, and email queries. Typically, we won’t have a day where we haven’t responded to a customer within an hour.”
Blurring the physical and digital line
As for the future, Lindell said T&W will be looking into artificial intelligence (AI), machine learning (ML), and AR to offer its customers a unique experience.
“In the next couple of years, our focus will be taking our marketing strategy and making sure it can be further automated via ML. From the AI side, we will build it into the way we communicate to our customers, to make CX completely bespoke and reactive,” he said.
One way is by using machine learning to help with image recognition and voice search capabilities. "If we can identify three or four types of images that people love regarding their home, we can attribute those to a style, and then we can surface products and themes to help those customers on their journeys," Lindell said.
“People want to share their style, and AR is an interesting part of this. We’d like to, eventually, build out spaces, making sure we can do it on scale, and hopefully customers can use an AR space and not be limited by what they can do. Right now AR is still seen as a bit of a game, it can be clunky, but it will get there in the future. Watch this space.”