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[8 comments]

Are You Ready For Marketing Automation?

January 6, 2014

Through a special arrangement, presented here for discussion is a summary of a series of recent articles from Lenati's blog.

Most B2B marketers have heard of marketing automation, but platforms like Eloqua, Marketo and Salesforce.com are not just for marketing to businesses any more. According to the Marketo Blog, companies across B2C categories, including retail, "are adopting the software for its real-time, relationship-oriented approach to maintaining and extending customer relationships."

Marketing automation platforms are increasingly refining their offerings, tailoring their products and services to fit B2C needs. On one end of the market, Bronto is a platform that focuses more narrowly on retailer usage than some of its B2B focused competitors, while providing a more robust e-mail platform. Giants like Salesforce.com are building retail specific functionality like clienteling into their platforms.

As retailers begin to think about how to integrate marketing automation into their businesses, there are a few things to think about before taking the plunge:

Fit to your customer: High involvement purchases benefit the most. When the sales cycle is high touch and the buyer spends a lot of time researching options or engaging with the brand, marketing automation tools excel. These tools remember the shopper, and nurture them through their shopping process, across channels. Leads are nurtured with e-mails and social media interaction, and perhaps even calls from sales people at just the right time. Retailers whose customers have low involvement with the brand or who buy on impulse will see fewer opportunities to apply marketing automation and see its benefits.

Fit to your business: Budget will be a major determinant in what platform you adopt, but so will the ability of your team to keep it running. Consider the time it takes your current team to generate traffic, nurture multi-channel browsers, provide customer service, and conduct social listening. Also consider how much time it will take them to manage the new system. More complicated systems can both save time and consume it, so be sure you know exactly how much money and time you can afford to spend.

Fit to your business systems: Some platforms can integrate into your CRM solution, and others cannot. Automation platforms can do a great deal of tracking on their own, but linking to purchase history provides a depth of analysis that will help you prove results in loyalty and revenue, not just lead generation.

Careful consideration of the customer, the business and the business systems can help determine if marketing automation is a good fit, and which platform is the best fit.

Discussion Questions:

What do you think of the potential upside and downside of marketing automation software for retailers? Around what tasks will the tools be most useful? How should retailers be exploring the opportunities?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

What's the likelihood that marketing automation will be fairly common for many retail tasks over the next three to five years?

Comments:

There is a HUGE potential in this area for marketing automation with shoppers, but as noted in the discussion above, currently this largely revolves around high involvement purchases that require a lot of cognitive activity on the part of the shopper - buying a new camera, for example. However, the basic concept will work as well with routine purchases, like for a loaf of bread. It's just that the ROI is at a different level, and those kinds of retailers (bread, e.g.) do not have the same focus on the customer as do big ticket retailers.

In aggregate, there are so many more loaves of bread sold than cameras, that automation WILL become commonplace for bread. I wouldn't dare to predict when.

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Herb Sorensen, Ph.D., Scientific Advisor TNS Global Retail & Shopper, Shopper Scientist LLC

My initial reaction was one of sinking despair as we, once more, look to mechanistic tools for energetic environments. How many times have I received "automated marketing" that starts with "Dear (first name)" - they can't even get the mechanism to work right! My first name isn't "first name." What a way to engage customers!

But, if one is to go down this dubious road, Cynthia and Laurel did give good "Fit" advice. If I may, I want to extend a couple of their points.

Fit to Business isn't just a budget issue, it's even more a cultural one. What do people 'feel' and 'experience' as your employee or customer? Take a Trader Joe's or Starbucks culture where all is based on a human experience...how do you 'automate' that? That's like instead of a kiss and hug, I'll tweet you an "XO."

Fit to the Business System has a much higher risk than presented here. For starters the more automation, the more cyber risk and system failure you'll experience. System integration is a huge and costly problem. 25% of system projects are cancelled due to incompatibility; 5-15% of them on delivery. 40% of your IT budget goes to maintenance, just trying to make the system work properly.

And all this in an attempt to engage and enthrall the human customer. Makes one go hmmmmmm.

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Ian Percy, President, The Ian Percy Corporation

I can see marketing automation initially a better fit for major purchases, longer sales cycles, high involvement purchases - like automotive, home appliances, furniture etc. - where the sales cycles are closer to B2B involving multiple touches and multiple decision makers. That is where the faster ROI would be, given the transaction size. For smaller day to day, promotion driven, impulse purchase types, I am not sure that works as well.

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Kenneth Leung, Director of Enterprise Industry Marketing, Avaya

Marketing automation sounds good, but we have a lot to learn before we get the benefits. First we need to learn how to really data mine. This becomes more difficult when you are looking at intentions, not just purchases. Are the intentions real or fantasy?

The problem I see is cheap does not mean quality. Some retailers are sending way to many e-mails to be taken seriously. Pitching products I have never bought from them and not even in the same categories. Five e-mails a week for things I am not interested in will not get me to buy. Too many marketers see e-mails as free, but they represent the company image. I think much more research and testing is required to really find the value.

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W. Frank Dell II, CMC, President, Dellmart & Company

The key to marketing automation is to send the right messages, with the right amount of frequency to the right people. It is that simple.

The right messages are "customized" to the customer. It will be based on buying habits, recent purchases and "intel" the sales person might pick up from the customer and add to the customer's profile.

Frequency is how often. Recently a store I enjoy doing business emailed me twice in the same day. I took myself off of their list. Now I don't receive any of their messages. They crossed the line with too much frequency.

Finally, the right people are customers who are interested. Again, it's that simple. But, you can lose them if you don't send the right messages with the wrong frequency.

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Shep Hyken, Chief Amazement Officer, Shepard Presentations, LLC

When a retailer or CPG brand gets marketing automation right, it is a thing of beauty. The trouble is that it most often falls flat with little or no tangible ROI. Consumers reward retailers and brands who get to know them intimately and deliver on every interaction.

Delivering a smarter shopping experience means you can create a single view of each customer - including preferences, propensities, transaction history and social media interactions - and use advanced analytics to derive actionable insights. Depending upon the product shopped, the brand can target individual customers with timely, relevant and personalized offers delivered via their preferred channels.

The downside is only when the tools utilized produce undesired results. The tools available today in the market have the capability that is described in the article. Retailers should have discussions with multiple vendors to talk about how to get started with immediate ROI that helps fund further enhancements.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

Marketers in charge of marketing automation sometimes don't know what they don't know, to paraphrase Donald Rumsfeld. I have seen it firsthand in interactions with a large auto dealership that has automated much of its customer interaction. I get regular voice mails from a salesperson saying things like "I don't know why I'm calling but the system tells me to call so I'm calling." And, we get automated service reminder calls for a car we no longer own and replaced through that dealer. Personalization of marketing can be nice for the marketer, but I am not sure marketers know what it's often like on the other end.

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Al McClain, CEO, Founder, RetailWire.com

The concepts of marketing automation definitely translate from B2B to high-volume, transactional consumer environments. However, the differences between both environments are huge and not sufficiently highlighted in the article.

Here are some examples of requirements in B2C that are different from B2C:

  • Scale is millions of customers, not thousands and I would argue that none of the existing systems like Eloqua or Marketo would scale
  • You cannot get away with rules-based scoring of customers, you need to have fully automated predictive analytics algorithms
  • Traditional marketing automation has only one scoring mechanism (lead score = likelihood to buy), whereas in B2C there are many types of behaviors to score: likelihood to buy, likelihood to churn, upsell/cross-sell/next-sell recommendations, likelihood to unsubscribe from an email campaign, share of wallet analysis, etc.
  • Data management, de-duplication and automated cleansing are much more important in B2C (householding, address verification, automatically check for misspelled names, genderization, etc.)
  • Direct mail, physical store environments and call center customer interactions are a much bigger part of the mix

There are more, but you get the idea.

I predict that a new category of "marketing automation"-like solutions will emerge for B2C before the existing B2B vendors will be able to retrofit the platforms that were built for a fundamentally different problem will succeed.

Dominique Levin, CMO, AgilOne

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