Social media gets a lot of marketing headlines. But don't forget 'traditional' database marketing, or ignore new techniques that blend the old and the new to 'socialise' a database-driven campaign.
Email marketing and social media have been tipped as the top areas marketers will be increasing their budget spend on in 2011.
According to a survey from StrongMail, nearly two-thirds of companies will increase spending on email marketing, and 57 per cent will put more dollars into social media marketing this year. Yet while budgets are set to increase, the biggest challenge for database marketers will be a lack of resources and staff to integrate and utilise the increased customer intelligence data flow. The survey suggests that email and social media will continue to get closer as more marketers integrate the two channels.
Analysts have also urged businesses to consider that database marketing needs to shift in line with the way customers' behaviour is changing. A recent report from Forrester Research, 'U.S. Database Marketing Service Providers', says the world has shifted from the traditional direct marketer, who simply builds a repository of names, to a world where that data can be tweaked to gain a universe of information about companies and individuals.
"What marketers have to realise is that this culture change means not just trying to get hundreds of thousands of names to target, but rather deciding on who your best customers are and might be," the report suggests.
Social media is accelerating the evolution of all marketing disciplines.
"Social media has destroyed the traditional definition of marketing," claims visiting US digital marketing expert, Ryan Warren, Senior Director, Studio Orange at ExactTarget, who says today's marketer needs to become a customer service specialist and practice 'interaction management'.
"Marketers need to manage interactions in real time and in a very relevant way. It requires us as marketers to both listen and deploy relevant dialogue with customers in real time.
There are new toolsets emerging for marketers to capitalise on these emerging trends," he says.
Warren says this phenomenon has broken the traditional campaign management model.
"Conversations that happen in social networks start and end faster and in higher numbers than a marketer's ability to make data insights and strategise on the next outbound campaign. This requires technology platforms to allow for some level of real-time discernment for enabling content and frequency of scheduled marketing programs," he adds, warning that many marketers are looking at the social media opportunity, but have yet to understand how it integrates with database marketing efforts.
"Many are investing in the social media channel without having a true strategy on how it is going to add value to their traditional efforts. As a result, their social efforts become siloed and disconnected to their broader multi-channel strategy," he says.
He advises that marketers either need to staff personnel to listen and engage with customers via social networks or they will have to correlate key social metrics such as sentiment or 'klout scores' – rankings to determine an organisation's level of influence – to their customer database efforts.
By keeping the growing channel of data sources like CRM databases, search marketing, Facebook and email confined to disparate applications, the full potential of the new world of database marketing cannot be realised.
"From our perspective, it's no longer about direct marketing; it's about customer intelligence.
It's a digital world empowered by a customer world — and with customers in control," the Forrester report says.
For ExactTarget, a global software-as-a-service company, the most innovation in integrated approaches to database marketing is emerging from the small and medium portions of the market.
"If I would put my finger on one key area that we see driving success it would be in remarketing programs," Warren says.
He says that SMEs are consistently seeing as much as a 30 per cent lift in overall program performance for programs like cart abandonment and lifecycle email programs.
An e-tail view
South Australian based SME marketing specialists Chilli Chocolate Marketing find that many SME clients in the retail space who newly adopt an email based database marketing campaign become frustrated by the lack of online sales conversion, despite impressive Web traffic results.
Simon Garlick, consultant at Chilli Chocolate Marketing says: "While from a marketing point of view the campaign can be a huge success, conversion to sales may not match up. But using online Website reporting tools can give us clues as to why leads weren't converted, in a way that traditional marketing channels do not." By integrating analysis of the email report and the Website/CRM report from the online store, the retailer can produce two valuable lists: those that were influenced by the email to click through the Website and then made a purchase, and those who clicked through and just browsed.
Garlick says the process allows the company to beef up the richness of its database, segment customers and track their customers buying preferences and behaviours. He suggests that the highly coveted buyer group should now be marketed to as VIPs in all future communications with any special deals pertaining to their purchase choice sent to them as a priority.
As for the browser group, Garlick advice is to "follow up".
"Do a follow-up email just to that list and politely ask what it was that made them decide not to buy anything. Any information you get back will be incredibly valuable and means you won't have to guess so much about why people decided not to buy – you'll have actual personal feedback," he notes.
He adds, however, that this is only an option if your marketing database is synched with your CRM activity. "Don't let all that info just sit there in isolation. Make your marketing efforts support your sales activity. Close the loop." As Forrester points out, not all customers are created equal – some customers cost more to service than others, for little reward – and by applying analytics and customer intelligence to database marketing, companies will discern the best prospects to go for.
Customers, conversely also expect to be treated with some familiarity, as they no longer accept impersonal communication. "This customer-centric approach is not just desirable today; it's expected," the Forrester report notes.