Building a bridge between the online transaction and the customer

30 January 2017

Article written by Jurriaan Nagelkerke, Principal Consultant

More effective marketing by combining online behaviour and customer knowledge

All marketeers know they need to design their online channel optimally in order to tempt the right customers and improve customer engagement. And that they need to employ the available customer knowledge as well as possible in order to be relevant. Indeed, only by doing this can you further develop and retain customers. In practice, this has proved far from straightforward to achieve: optimising the digital channel and developing data-driven customer strategies are often deeply separate worlds. There are various reasons to which this separation between online marketing and marketing intelligence can be attributed and in this article we will look at three of them.

1. Different departments
First of all, the work relating to online marketing and marketing intelligence is often spread across multiple different parts of the organisation. It is still rare to see these specialists employed in the same department. It is much more common to also have a substantial physical distance: a different office landscape, a different floor, even a different building. The online channel was added at some point, and is now indispensable, but yet in many cases it still isn’t integrated into the traditional marketing organisation.

2. Different DNA
In many organisations, online marketing specialists and marketing intelligence specialists are distinct groups with “different DNA”. This can be accounted for as online marketing issues (e.g. SEO/SEA optimisation, affiliate marketing and social media strategies) require different knowledge and competencies from marketing intelligence issues (e.g. cross-selling campaigns, retention programmes and customer value strategies). They often have different tooling, data, methods and techniques. But, even more importantly, there is also a difference in culture between online marketeers on one side and marketing intelligence analysts and database marketeers on the other. The specialists in these teams often have quite different educational and training backgrounds and different perspectives on marketing issues and on data and analysis.

3. Different Issues
Finally, the issues faced by the online department differ starkly from the issues that the marketing intelligence department usually handles. In many online marketing departments, the emphasis is on operations and tactical decision-making, whereas the marketing intelligence team actually concentrates on research and strategic issues.

Sub-optimal

The reasons cited above go some way towards explaining the lack of collaboration or integration in many organisations. This is regrettable because having different departments working towards different objectives produces sub-optimal results for the entire organisation. On the one hand, they only take the customer behind the transaction into very limited consideration when optimising the online channel. And on the other hand, database marketing and marketing intelligence all too often overlook valuable information on the origin and online behaviour of the customer. That’s why building a bridge between the online transaction and the customer is one of the most important marketing challenges for many organisations right now.

Can be accounted for, but not logical

From our perspective, fact-based decisions, the difference in focus between the departments can be accounted for, but that certainly doesn’t make it logical. And even with the cited differences, the first tangible successes are often there for the taking. We can show this in a handful of examples:

Example 1 – Keywords
Keywords are still assessed on the basis of direct ROI, in terms of transaction value. But we now know much more about the customer behind the transaction. So why do too many organisations still not use it? The winners in the Search Engine Advertising of the future know exactly what keywords in Google AdWords will support a good customer strategy. And they gratefully use them.

Example 2 – Customer View
It is accepted from a marketing intelligence perspective that online origin and online behaviour form a “blind spot” in the 360-degree customer view. Even though origin and interaction behaviour are very powerful predictors for future customer behaviour in terms of cross-selling, up-selling and retention.
But how does it actually work: how do you actually insert customer insights into online transactions and exploit online behaviour for database marketing purposes? We want to take you through our plan of steps, showing you how with a few small, direct strikes you can generate very useful insights. This plan of steps has been implemented at a large Dutch retail organisation.

Plan of Steps

Sounds good, but is it actually possible to link existing customer data to online transaction data? And what is the outcome of doing that? Our motto is “Start small, learn, and then grow.”

1. Select an online campaign
Select a suitable online campaign and campaign period, ideally a campaign with multiple transaction channels (newsletters, direct traffic, affiliations, comparators and SEA campaigns) and different keywords. Selecting a campaign that is also scheduled to be repeated in the near future means you can directly apply the insights and test them in practice.

2. Set campaign objectives – both for new and existing customers
What are the objectives underpinning the selected campaign? To what extent do these differ for new customers and for existing customers addressed by this campaign? Next, formulate a number of specific questions to determine the extent to which the campaign objectives, both for new and existing customers, are being achieved:

Which keywords led to a response from existing customer relationships? And alternatively which ones led to new customers?
What are the differences between the profiles of existing customers who made purchases following different keywords?
What is the behaviour of the new customers after the end of the campaign?

3. Collect, link and analyse
Analysis is based on the online campaign results: What transactions emerged from the campaign and how can these transactions be linked to existing customer relationships? Next comes an important step: identify all the relevant “offline” customer attributes to answer the formulated questions and link them to the online campaigns.
A crucial element of this exercise is to identify or design an appropriate key linking these two worlds. For order data this may be: the transaction key. But, alternatively, a tag can also be sent in the email, for example, which can be useful for accurately tracking the results among customers and non-customers. This key needs to be retained in the systems in order to form this link between the online and offline “worlds”.

New Insights

This link, combined with the necessary analyses, leads to new insights into the success of online campaigns. In our practical case study (retail organisation), we have discovered major differences between new customers compared to existing customers when looking at the transaction channels.

Acquisition
Analyses have shown, for example, that there is a very stark difference between the percentage of new customers addressed by the various different online media used in the campaign (newsletters, SEO, SEA, affiliates). The percentages vary from 45% to as much as 97% of new customers. On the one hand, this confirms suspicions: Transactions following newsletters come largely from existing active customers. But the analyses also provide more surprising insights: certain SEA keywords trigger a high percentage of existing customers, whereas other keywords trigger a high percentage of new customers! These insights have been cashed in right away.

Customer Value
It has also been revealed that within the group of existing customers with campaign transactions the customer profile varies sharply between the online transaction channels. For example, it transpires that affiliates deliver existing customers with a low purchase frequency and a low average purchase amount. So, for this retail organisation, a relatively expensive channel addresses fewer valuable customers.

Retention
Analysis of the repetition behaviour in the months following the end of the campaign produced the insights that especially new customers entering via comparison sites very rarely make repeat purchases. This group of new customers is the quickest one to be lost.

Build bridges for yourself!

The results from this case study produce actionable insights. The ROI on online campaigns can now also be determined at the customer level rather than only on the transaction level. This means that online campaigns can be brought much more in line with strategic and tactical marketing policy. And in terms of CRM strategy this makes it possible to tailor online campaigns to the behaviour and needs of valuable customers.

Our experiences with omnichannel challenges have taught us that data management plays a crucial role. Both online and offline. Only with the right online design and tagging can you obtain the crucial insights to tell you which channels really contribute towards achieving your objectives. And when your online transaction data isn’t incorporated into the marketing database, you can’t make the link between online transactions and customers you already know. Finally, it is increasingly important to identify online visitors as quickly as possible in order to be immediately relevant for a recognised customer.

But it is not only data management that plays a major role: it is also vitally important to connect the online marketeer with the database marketeer. These two distinct groups with different DNA need to understand each other’s language and have a sense of each other’s objectives. In our experience, when, and only when, you organise collaboration at the point where online and offline meet, then new ideas to better integrate and optimise marketing spring up as if by magic. That might be the best “collateral gain” you get from building this bridge!