5
Bringing Behavioral Marketing to Life in the Real World
Now that we've assessed where you stand in terms of behavioral marketing, and charted the people and process course for moving forward, let's dive into the how. The next six chapters look carefully at what behavioral marketing means to almost every marketing channel and activity. But scoping the pace and method for taking on a newer way to think about marketing takes time and some deeper consideration.
Conversely, you should not overanalyze enhancements to your marketing approach, because all this will do is make them much more difficult to achieve. Incremental change driven by a relentless pursuit of improvements will set a comfortable pace for most marketers.
The “Next Six” Methodology
One of the most common questions I get from our customers is how to reframe their marketing to be more behavioral-driven, while continuing to execute the tasks and campaigns they're currently working on. It almost always comes down to a question of priorities and how hard you want to work. No marketer I know should expect a reprieve of their daily duties so they can think deeply about being more behavioral. You must accept upfront that you're going to have to change the tires on a moving car.
The best way to make this change part of your program over time is to improve in smaller chunks, typically in groups of three and over a specified period of time (like a quarter). In all the years I've worked as a marketer, making incremental improvements along the way has been achievable. Making audience selection smarter, turning on a simple scoring model, or getting my IT partners to install the JavaScript tracking tool on the website are all examples of one-off projects I could manage easily alongside my regular work.
The brilliance of this simpler view of change is that you only have to architect changes in groups of three to support a larger change initiative. And if you tackle three of these per quarter, you can certainly remake your marketing approach in the course of 12 to 18 months.
I call this the “Next Six” method because you should always be in execution mode on three, and on planning mode on the next three—at an absolute minimum. If you're really good, and you've been successful with your first six, you might even think in increments of 12 and be focused on some bigger, hairier issues that involve other internal groups. For example, you may be looking forward to big enterprise initiatives like integrating your marketing automation platform with your customer-relationship manager (CRM) or combining your marketing automation platform with your Content Management System (CMS) so you can tailor websites at the individual level based on behavior.
Take the time to fully articulate your future state at 12, 18, and 24 months. Be very specific about what capabilities you'd like to have, and then back into the changes required to get there. Recognize that some change will require only you, but bigger transformations may well impact others in your organization—specifically IT, customer support, sales, and other key groups. If it sounds like you just spooled up an entire change management practice for marketing, it's because you did. Embrace it, and begin the process.
One of the most common protests I hear from marketers is they don't have the time to do things differently—and, unfortunately, it's one I am more likely to hear from a more experienced marketer. There's a set-in-my-ways dynamic in the marketing function—especially when management isn't forcing the change down the reporting structure.
So yes—you may very well have to work a few extra hours a week to get this going. But the truth is that most of us could be more efficient with our daily tasks and find the time. Let's say, for the sake of argument, that you're 100 percent deployed for your 40-hour workweek. Setting aside two days a week (Tuesday and Thursday, to keep it easy) to spend an extra 45 minutes at the end of your day scoping and planning this behavioral future is an investment that will pay off.
A Real-Life Example
It's easy to talk about in theory, so let's dive right into a real-world blueprint, with the example of a small-scale retailer who has both an online presence and physical stores. Let's say we're in a heavily contested category like nutrition, and that our email list has 50,000 opted-in recipients and we have 12 corporate-owned stores primarily in the Northeast and Mid-Atlantic states. Our marketing has been pretty routine to date, and our sales are relatively steady at 50/50 online to in-store. How would we chart the future course for such a business?
The first question I'd seek to answer with the executive leadership is about the sales ratio between online and in-store. Specifically, do we want to continue to keep that ratio well balanced, or do we want to expand our product offerings online and attempt to grow sales on that side of the business? What's our average sale value for each channel, and could we improve those numbers in one or both channels to help drive a different prioritization?
Second, I'd want to build out personas and characterize my customers' buying habits. Is the fact that we're in a competitive segment forcing us into discounting or can we maintain decent margins based on a solid marketing methodology combined with a differentiated product set? How aggressive have we been historically? Is there room for significant offer testing and maybe even a loyalty program? And do our online and retail personas differ significantly, or does the audience look and feel much the same across all channels?
Once you answer these top-line questions, we can move into program enhancement mode. Keep in mind that answering these first questions shouldn't take you 60 days and require absolute agreement from every stakeholder in your company. You can nail down directional answers early on, and be prepared to morph your future state as you go. Show me someone with an inflexible 18-month plan, and I'll show you someone who clearly doesn't have a solid grasp on how a business functions.
The first place to look for enhancements is in the digital marketing tier, specifically within the content you're currently delivering. Have you done some high-level A/B testing of subject lines to know what key phrases drive opens, clicks, and conversions with your email? You don't need to tackle full-on multivariate testing of every content block in your message, just understand if your audience responds better to product- or offer-oriented subject lines. What happens when you turn on limited-time offers like buy-one-get-one (BOGO) free or free shipping?
After email subject-line enhancements, begin tracking and segmenting your audience based on behaviors. Initially, this will require you to work with IT to install the JavaScript tracking code I reference throughout this book (including the definitions section in Chapter 1). This one-time effort opens up a critical customer-level view of behaviors that should flow directly into your marketing automation platform and become elements you can query on immediately.
Along with content enhancements, you want to be thinking about list growth as an ongoing effort. Most retailers I know fully expect to be losing somewhere around 20 percent of their list to attrition of all forms on an annual basis. Keeping your list strong and clean isn't something that happens without a serious plan. As we'll discuss shortly, in-store registration is a huge source of name acquisition, but having a strong digital-side approach is important as well. One of the best ways to drive this behavior is to build out a strong content strategy based on knowledgeable recommendations and feed it with an ultratargeted paid media campaign on very specific search terms.
This is also a great time to consider a simple scoring model to help you segment your audience based on activity. Assign point values to email opens, buy now clicks, website page visits, and any other number of user-generated actions. Creating an objective score for each one of your users will allow you to then identify which of your best customers should receive different content or better offers. Or you might segment out your least active customers for your best reactivation offers in order to drive “one more transaction this quarter.”
An ideal way to round out digital enhancements is to build and launch three to four key behavior-driven automated programs. The first would definitely be cart abandon, and I'd spend some serious thought time on the pace and content of each of at least three messages. The first should be within 30 minutes of abandon, the second should come the next day and feature an offer, and the final should happen two days later and make your absolute best case for the purchase.
The second automated program would be a browse abandon campaign, which I'd pilot on my most profitable line of products. Once a named user visits one or more specific product pages in that category, the program should automatically trigger a message featuring the best sellers in the category, and potentially include an offer. By playing back content we know the person is interested in, we very subtly reinforce that we're paying attention, thereby driving the personalization quotient through the roof. Many of these browse abandon campaigns convert at 150–200 percent of standard bulk messaging, and put us squarely on the path toward proving the monetary value of behavioral marketing.
The last automated program I'd build would be a comprehensive three to four touch welcome campaign designed for new registrants to my list. It would begin with a simple thank you message, move on to content about both my online and retail stores, and close with an offer designed to drive the first purchase event. The beauty of a well-orchestrated welcome process is that it creates an instant deeper bond with a recipient as compared to just ignoring the signup event. Keep it personal, light, and informative and you'll build a quick rapport with your newest customers, which often leads to more profitability down the road.
The retail side could begin with something typically beyond the scope of marketing yet critical to the success of the business. Assess the skill level and training methods currently in place for employees. Is your company hiring for, and maintaining, a deeper level of nutritional knowledge, or are they simply filling the slots with hourly workers? What kind of employee communications program could you build that would deliver product and lifestyle information to the 50 to 60 employees who help your customers in person every day across your store network? In almost every case, a more highly trained and insightful store rep means more sales.
Second, I'd make sure my store sales information was as readily available as my ecommerce sales information. Most often, this means pushing some level of customer information down into a point-of-sale (POS) system that tracks retail purchases at the individual level. This should also be a secondary point of email opt-in, and, in a perfect world, there should be a single view of the customer across both ecommerce and retail. I know one major U.S.-based retailer who now drives more than 60,000 new email opt-ins per month since they enhanced their POS system and in-store processes to support that effort.
Once you've solidified this single customer view, you can bring the core elements of a loyalty program to market pretty easily. You can create levels of your program based on spending, and then begin managing each segment's communications differently. Given the operation's relatively small size, I'd likely skip the physical card and monthly statement aspects of a traditional loyalty program and go for a POS enhancement that would print the points balance on every receipt—and a function so any store rep could pull up a specific user's balance. Your POS system should also seamlessly manage any coupon or promotional code redemption.
Beyond the technology side of running a loyalty program, you must train your store reps on the program's details. There's no worse customer experience than showing up at retail with a question about a promotion or loyalty program, and the staff knows nothing of the program details.
Finally, I'd be looking to drive in-store sales via digital programs for the retail side. Since there are only 12 physical locations, this won't work for your entire audience, but I'd segment out and begin marketing slightly differently to everyone within a 10-mile radius of your stores. I might experiment with in-store events (think manufacturer rep days or evening guest speakers) as a way to extend your buying experience for online-only customers to visit your physical stores. You could also seek to build a community of your customers around certain affinities. Maybe your location is the meeting place for a local cycling group, or you host weekly weight management meetings—anything that will bring your customers together around your physical locations.
You can chart these goals in whatever format makes sense for you and your business, but you'll want to include the impacts on other groups along the way. You may opt for a classic timeline view you can easily tape to your wall to track high-level progress, or go full depth and build out business requirements and work streams for every impacted group. Much of your documentation approach should be based on how much support your colleagues need to drive change.
The changes we have discussed here could easily take a marketer 8 to 12 months to bring to fruition while managing the rest of their work. It's always exciting to think about the end state, but remember how much effort and planning it takes to add this type of change to your everyday queue of work.
Reasons We Fail
Although all this change sounds pretty straightforward when reading about it, it's hard work in reality. I constantly speak to marketers who have tried to make progress on one or two initiatives, but can't get things going. Worse yet, they get halfway there and momentum simply stalls out. To that end, the next section discusses four common scenarios and how I've seen marketers navigate past them to success.
- No executive support: Among the most common issues I hear from directors and managers is that their executives aren't explicitly asking for this kind and level of effort—and, therefore, aren't necessarily in favor of them spending lots of time on it. Sometimes you have to operate beyond the scope of your more classically trained executive team. There are plenty of market conditions to indicate that behaviors are the new measurement equivalent of transactions in terms of understanding customers' experiences.
Sure, your VP may not be asking you for KPIs like percentage of complete data records, but that doesn't mean you shouldn't take that to them. Chapter 16 discusses the importance of using behavioral marketing methods to set yourself apart from other marketers—and to drive promotion and new job opportunities outside your current company. This is the time to go beyond what's expected to what's possible, and to capitalize on the upside you create.
- No internal support: For every marketer who tells me their boss doesn't get it, there are 20 that have a completely legitimate complaint against their peers inside the organization—often beginning in IT, and crossing almost every discipline. It's not common to find serious change agents looking to radically improve marketing capabilities across groups like sales and finance. Human nature is to not upset the proverbial apple cart—to be content with minor enhancements that are easy to roll out.
This is where I recommend marketers aggressively build their network across the company well before they request major changes in thinking. Spend a couple of months building close relationships and giving as much as you can to create good will. Be an evangelist for the marketing function, offer your help in customer-facing programs—in short, do everything you can to help your colleagues.
Although this is true in almost any company, it becomes all the more important as your organization becomes larger. I've personally worked in eight-person startups where I was the complete marketing function, and I've been a marketing thought leader at two Fortune 50 companies—UPS and IBM—that each have somewhere north of 400,000 employees each. As the company gets larger, so do the complexities, and the only true way to combat this phenomenon is to self-define as a change agent, and aggressively seek out others like you across the organization.
And let's be honest—some days, the best strategy in a big company is to break your big third-quarter goal down into two to three smaller component pieces and reset for next year. You're not going to win every single battle, and sometimes being pragmatic is the best move to keep your allies strong and your objectives within reach on the horizon.
- Not enough time: This is almost always the first objection of the first attempt to remake your marketing effort around behavioral marketing. Marketers come to an event or a strategy session and leave supercharged and ready to get behavioral. They might even get back to the office and start some A/B subject line testing, but they don't make meaningful progress over the next 6 to 12 months.
This is the normal state of affairs, but it's my personal goal in business to make sure fewer marketers fall into this trap. If you can't get this done during the course of your regular job, then I'd contend you simply need to work harder. Again, easy to say but harder to do. I've seen literally dozens of cases in which a marketing manager takes greater charge of the role and responsibilities and ends up being a director more quickly or getting an increase in salary next time reviews come around.
The net here is whether you want to stand out or slot into a marketing role. It's very clear that the luxury of being an order taker is going to evaporate within the next three to four years. Right now, there's a 22-year-old graduating from a great school that's learned how to measure marketing programs and doesn't know any other way. Don't be the deer-in-the-headlights who gets run down by this class of up-and-coming new-school marketers.
- Underwhelming results: Every once in a while, I'll run across someone who has tackled the hard work but whose results just don't pan out as strongly as expected. Maybe their cart abandon campaign only converts 10 percent of recipients instead of a category-leading 30 percent. And maybe the difficult task of executing data strategy hasn't paid off in revenue lift as expected.
This requires us to be brutally honest with ourselves. Did we really give it 110 percent, or did we only make first-order changes to a broken process that now is only 10 percent more efficient? Like everything in life, not every behavioral marketing move is going to work out perfectly. The difference between being successful in this new world is whether you continue to execute the plan.
One pro tip: if you're fortunate enough to be self-starting these initiatives and don't have top-down pressure, save your sharing moments until after you've proven revenue or customer satisfaction lift. No one says you have to go all the way out on the ledge before execution, and tip your hand on strategy and results. Oftentimes, it's much more compelling to report the final results of your test in successful terms—even if it takes a few cycles to get the tactics correct.
Overall, marketers should begin the first steps of reorienting around behavioral-marketing principles with a reality check. Understanding the advantages and disadvantages going into the process will help improve your end results. And perhaps the fact that you've built an amazing relationship with your CIO will pay epic dividends when it comes time to integrate CRM data back into your marketing automation system.
You're going to have to chart a course that's unique to your industry and business, but remember that bad things rarely happen when we're relentlessly moving forward. Be thoughtful and realistic, but don't hold back—more often than not, history rewards the brave, even in corporate marketing.