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Marketing Automation in Frugal Times

Marketing, like most other corporate departments in 2012, is facing significant budgetary restraint, if not to say restriction, as part of corporate focus on cost cutting and the bottom line. The challenge for the marketer is that there is still a crying need to automate marketing processes in order to provide adequate marketing services with fewer staff. 

As big marketing automation budgets become a thing of the past another approach is required – Continual Gradual Automation. This approach starts small and implements quick win scenarios that finance the next step. Over time, it is possible to mash-up an efficient and effective customized marketing automation suite that encompasses database marketing, email, direct mail, social media, analytics, business intelligence, mobile, etc. to influence customer behavior across channels.

Customer State Marketing offers this ability. It allows for the design of independent marketing scenarios that govern the trigger and response behavior that automate various aspects of the marketing process and customer communications. Scenarios such as acquisition, conversion, retention, viral contests, etc. can be combined to build rich marketing ecosystems.

Action features such as sending emails, mobile messages, update databases, etc. are easily added as required. This approach eliminates the need to pay for unused features that are part of an integrated marketing automation suite. Rather, over time, additional channels and actions can be added as needed. The end result is a simple and faster marketing automation implementation eventually leading to a complete set of functions and features that are actually used by the marketing department.

Customer State Marketing is the ideal approach for marketers in lean times. It allows you to start small, win quick, and bootstrap a marketing automation process!

EZ ecommerce scenarios

I was recently asked to produce a Customer State Marketing ecosystem for an online retailer. In less than five minutes I designed a marketing ecosystem that does three things:

1)      Attempts to convert a recently signed up contact to a customer. A cascade of two promotions and reminders sent to the contact, one every 5 days. The promotion and reminder solicitations stop automatically as soon as the contact buys.

2)      Adds to contact to the daily email blast list and then adjusting the frequency of the mailings according to the contact’s open behaviour.

3)       Stimulate the customer to purchase by sending them different promotions 30, 60 and 90 days after their last purchase.

This is an example of a simple Customer State Marketing ecosystem that anyone can build quickly and easily. The three scenarios work together. The coordination of activities is governed by the customer's state at the time of the event.

Simplify and streamline the marketing automation process using Customer State Marketing.

In many of my blogs I have alluded to the fact that Customer State Marketing has significantly increased my productivity. The more I practice the craft the more productive I become. What really strikes me as incredible is the fact that I am seeing a 10 to 20 fold gain in productivity. How to explain this?

I guess the best way to look at it is that a Customer State Marketing diagram adds a new dimension that greatly simplifies the design of automated processes. As David Raab mentions in his Marketing Automation Interface Should Focus on Customers, Not Campaigns post, most marketing automation vendors use the same flowcharting techniques introduced by Frank Gilbreth in 1921. Customer State Marketing improves on this technique by adding the concept of Customer State. Simply said, Customer State is the context that governs the action/response flow of a process.

Let’s take a simple example such as a double opt-in process for an email subscription in the Customer State diagram below.  

This scenario contains three states: Unknown; Unconfirmed; End. An examination of each state reveals the following:

• State: Unknown – Possible events/actions:
  • Signs up/send confirmation email
  • State: Unconfirmed – Possible events/actions:
    • Clicks confirmation/add to newsletter list and send welcome email
    • Bounces/do nothing and move to End state
    • Does nothing (in the diagram above this is described as a ‘3 days after sign up’ event)/send reminder email
    • State: End

Notice how simple the scenario is. Knowing the state of the contact allows us to identify a finite number of events to consider when automating a process. The number of actions associated with each event is also finite and relevant to the state of the contact. A few simple steps are all that are required to build this automated scenario.

The same is true for more complicated scenarios. Each scenario contains a finite number of possible states, and each state contains a finite number of events and actions.

As of the writing of this blog, I am building a nurturing and retention program for a local retailer. He has segmented his prospects and customers into three groups: contact; top customer; regular customer. His nurturing and retention program includes 19 different communications designed to stimulate sales. The content of the communications depends on the state of the customer (e.g. contact, top, regular, or at risk) and the number of communications since moving to that state (e.g. there are six levels of reminders for customers who are at risk). So far it has taken me about 8 hours to design, build and connect the required scenarios. Testing will take another 3 to 4 hours.

 
(This is the Top Customer scenario. Note the four possible events that need to be considered for Top Customers)

If I think back to the way that I used to work, it would take me a minimum of a week to automate such a complex program. Thanks to Customer State Marketing I am done in no time, not to mention the agility to make changes at any time.

Customer State Marketing Gains Recognition

David Raab’s post of Dec. 15^th, Marketing Automation Interface Should Focus on Customers, Not Campaigns (http://customerexperiencematrix.blogspot.com/2011/12/marketing-automation-interfaces-need.html) is right on the money. Here are some quotes from his article that scream out to me:

Marketing automation vendors are using “The same flow charts that Frank Gilbreth introduced in 1921”.  

The old ways do not work indeed! Diagramming is too complex for users. This inherently limits the complexity that can be automated. A simpler diagramming method is required, one that is closer to the user. What is required is an interface that reduces complexity and provides the ability to focus on simple program flow with simple branching. This is precisely what Customer State Marketing does.

David writes, “… think outside the flow chart”. A properly designed Customer State Diagram (CSD) is an improvement over traditional float, dataflow diagrams and Business Process Modeling diagrams for describing and automating marketing behavior.

Once again, to take from David’s post, “The biggest problem with flow charts is they are inherently two dimensional”. A CSD introduces the state dimension to the automation design toolkit. Simple scenarios can be sequenced to cover a multitude of customer states (e.g. new customer, regular, VIP, at risk, online shopper…). Each scenario can be designed to respond to events (e.g. buys, blogs, purchases in store, online…) and take cross-channel action (e.g. send email, send DM, send mobile, tweet, update database…) according to the state of the customer at the time of the event.

It is possible to model for responses of first time customers versus repeat customers, VIP customers and customers that are at risk. It is possible to easily model an ongoing reactivation program when a Regular customer stops buying for a month by automatically moving them to an At Risk state that provokes a cross-channel promotional cascade. By focusing the design process on discrete customer states and state transitions it is possible to model responses to complex customer behavior across an ever growing number of channels.

Customer State Marketing takes the customer’s perspective. Individual customers move in an erratic fashion that baffles marketing automation systems that operate in a linear fashion. Customer State Marketing responds according to the current state of the customer, not according to the marketing automation sequence.

Back to David, “A customer-centered approach would develop rules for each situation rather than stringing together rules for many different situations”. This is exactly what Customer State Marketing does. A scenario for new customers, a scenario for VIP at risk customers, a scenario for a viral contest, a frequency cap scenario, a frequency optimizer scenario, a scenario to lookup an external database key, a scenario to consult a recommendation engine – each scenario is simple to design yet the whole describes a very complex marketing ecosystem that can be a game changer for the smart marketer.

The kicker is that the productivity gains for the Marketing Ecosystem designer are phenomenal! In a week I do what used to take me a month or more to accomplish. See http://blog.whatsnexx.com/2011/11/all-in-a-days-work-the-speed-of-customer-state-marketing-automation.html

Happy Holidays to all!

 

Jacques.

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All in a day’s work: The speed of Customer State Marketing Automation

What amazes me the most about customer state marketing is the speed of development and implementation! Recently I had a two hour design meeting with a client. We fleshed out the various customer states and related events and actions. I followed that up with about two hours of design refinements. Next we will review and refine the design. Barring any major changes we are ready to fill in the connector layer, which is to define the input fields for the various apps that make up this client’s marketing ecosystem, such as web forms, email provider, call centre, databases, and get the user name and password for each.

Once the client provides that it will take me another two hours to connect and test the ecosystem. Once the final email templates are available I can put the system into production. Throw in another two hours for any number of last minute changes and there you are, from design to online in eight hours. It’s all in a day’s work!

Marketers need wings: Removing the IT shackles!

One of the main differences in the way that marketing and IT work is agility. In a marketer’s fast-paced world, the number and types of customer touch points are expanding constantly. Mobile marketing brings geo-location into play. New channels and new media need to be integrated and coordinated. Consumer response to marketing and advertising is evolving and their expectations are higher. This leaves marketers in the midst of the chaos trying to keep up and influence customer behavior across multiple channels.

Add to that a fierce competitive landscape where not only does the marketer need to design and implement customer acquisition, conversion and retention strategies, they must monitor and react quickly to their main competitors’ strategies and tactics, and they must be on guard for new players with new distinctive competences.

No wonder a marketer needs the agility to turn on a dime. Imagine launching your Christmas promotion with an innovative new campaign two days after your competitor just launched theirs with a very similar concept. All of a sudden you’re a me-too promotion. The marketer is able to change the offer, the content and the art work very quickly and save the day; however this is only possible within the limitations of what IT can do, that is to say, what works right now.

In the IT world it is all about structure and specifications. IT‘s concerns focus around the nature of the work they do and the cost implications if not done properly (i.e. rework). Practices and procedures are used to ensure reliable and (hopefully) affordable software that fits the user’s needs. Development methods such as Agile help improve the fit between software development and marketing needs, however there still is a very cyclical nature to IT practices that prohibit quick change and rapid problem resolution. As a result IT is unable to react very quickly to marketing emergencies.

This mismatch is a major constraint for marketers forcing them to settle for strategies and tactics that are practical and that, to the greatest extent possible, require minimal IT involvement. In essence, marketers are restricted to choosing the best from a slate of lower ROI projects that are possible.

Whatsnexx breaks the shackles by putting the ability and the power to make software changes directly into the marketer’s hands. The marketer can now control most aspects of cross-channel marketing campaigns and relationship marketing practices with very minimal IT involvement. It is possible to make last minute changes without incurring weeks and months of development. As I move into the final days of implementation for one of our clients, I am amazed at how many last minute changes they want. Instead of it taking weeks or even months if the IT department was involved, I implement the changes directly in Whatsnexx in less than an hour. Now that is what I call agility!

The New Digital Agency: Advertising in the Age of Cloud Computing

In the age of digital marketing advertising agencies must compete in a multimedia cross-channel ecosystem for client marketing budget. In order to be successful the agency must not only come up with creative strategies to capture consumer awareness, they must also cope with their client’s need to track consumer information that is uncoordinated, fragmented, and comes in a wide variety of formats.

In addition to the strategic and creative services that an agency must offer to win accounts, they must also offer the technical infrastructure and expertise required for coordinated cross-channel campaigns that use customer profile data.

The result is that cross-channel advertising agencies must devote a growing portion of the project budget to IT services rather than creative talent and market coverage. There is a delicate balance to be maintained between hiring creative talent, maintaining a competent IT infrastructure team to execute relationship marketing strategies and campaigns, and the number of people you can reach with any budget that is left over.

The reality is that with the emergence of digital technologies the landscape is in a state of constant evolution and reinvention, and IT infrastructures is not easily adaptable to changing client needs and client advertising portfolios. IT works with square corners, so to speak, whereas advertising works in color. IT is a different discipline and set of rules. Making changes once the IT development machine is put in gear is costly. This slows an agency’s speed to market, resulting in missed opportunities to deliver relevant and timely communications, because the IT specifications process is long and detailed.

Existing agencies and start-ups need a way to eliminate, or at least greatly simplify dealing with IT. This would free a tremendous amount of interactive budget that could now be spent on creative talent and cross-channel market coverage.

Cloud computing removes the barriers to entry into the digital marketing world! It is now possible for two guys, one very creative talent, and one digitally competent marketer, to combine forces and build custom-made relationship marketing strategies and interactive cross-channel marketing campaigns.

Rather than spend 9 months building a centralized database and only then starting your marketing campaigns, you could start building a customer state marketing database in a few weeks’ time. You would then be acquiring valuable customer profile and behavior information immediately. Think of how much data you would have access to in 9 months’ time and what you could be doing then. It’s a new world for advertising agencies!

What is the main reason that companies implement marketing automation?

Here is a comment that I posted to this question in the Focus group. I am blogging it because I think it is true, and I am interested in comments. What do you think?

"Imho, hype and hope! The hype out of the MA sector today is amazing, though no more amazing than Client/Server, ERP, and CRM were in their heyday. The hope of all CMOs, marketing directors, managers and support staff for an easier way to make it all work together easily, seamlessly. The hope to make the design and integration of marketing program as easy as working with spreadsheets is for!

Of course, this is not what you tell your boss."

Whatsnexx: Rapid Application Development for Marketing Automation, or RAD for MA

If I were a retail marketer planning this fall’s Back-to-School campaign one of my goals could be to improve next year’s media spend by identifying the most responsive media, and by taking the opportunity to use the information to compile a list of optin email addresses. Ideally, I would also like to run a couple of A/B splits on the creative and the offer to get a better lift next year.

The campaign I have in mind consists of various drive-to-web media ads in local newspapers. A contact who provides an email address will receive a drive-to-store coupon that he can print or show on his smart phone. At the store level, we need the point-of-sales system to capture the personalized bar-code on the coupon and the content of the shopping cart or, at worse, simply provide a count of the number of coupons redeemed by store.

Whether I like it or not, I need to talk to IT. I know what they are going to say, but hey, maybe I will get lucky this time and, at a minimum, get a count of coupons redeemed. That, at least, would allow me to calculate a rudimentary campaign ROI.

IT’s response is predictable: “We don’t do direct mail in-house. The web sign-up page is about a month away, and the point-of-sale coupon capture is feasible. The problem is that your marketing project needs to talk to three different computer systems: web, point-of-sale, data mining. A project manager will need to be assigned to the project in order to coordinate the project and get access to the right programmers. We will have one available in about three months”.

Unfortunately three month’s is Christmas, not Back-to-School!

What I need is a way to rapidly tie together the systems I need to achieve my simple campaign goals.

• I need to build a web form that captures email address, salutation, first name, last name and postal code. That should not take more than a week. Landing page solutions like Unbouce™ can drastically streamline this task.
• I can use the company’s current email system, CakeMail™, to store the email list and build the emails
• I need a flat file to capture the point-of-sale data set that interests me. This is a SQL query that IT can create for me.
• I need to dump this flat file into a report generator or even Excel where I can calculate my ROI by source, creative and offer code.

What I need is a simple and easy way to orchestrate the flow of data from source to destination in a low IT impact fashion. In essence I need a marketing RAD tool.

The marketing RAD tool I would use is Whatsnexx Designer™. It allows me to model my marketing scenarios quickly and easily. I do this by defining customer events and resulting actions. I have an easy way to track each individual customer and customer profile in my marketing ecosystem. I can easily connect to any application such as the company’s email system and flat files. I can dump data into any database or as a flat file.

In order to do this with Whatsnexx™ I need to create two scenarios: one to handle the list management, and one to handle the database update when a customer redeems a coupon.

 

This scenario allows me to manage the email list and the responses to the web sign up using the company’s current email system.

  

This scenario allows me to manage the coupon redemption from the flat file produced by an SQL query of the point-of-sale data. I will then use the campaign database to produce my reports and calculate the ROI for the various media, promotions and creatives.

So now I can go back to IT and ask them how long to do the project when all they need to do is:

• Host a web form that generates an XML ticket with five fields: Source code, email address, salutation, first name, last name
• Activate the campaign coupon function at the POS between specified dates
• Query the point-of-sale data and produce a flat file of coupon redemptions

IT’s response is two weeks for hosting any new web pages. Coupon activation requires two weeks’ notice, and the SQL query can be done with five days’ notice.

This is why I would use Whatsnexx™. Instead of managing an IT project I would now be able to focus on getting the team working on delivering the design and creatives for the web page, the A/B split promotions, booking ad space, and working with sales and merchandising to determine the final content of the Back-to-School campaign.

The marketer’s silver bullet! Looking for an integrated marketing solution that does it all!

As a CMO or Director of Marketing, you face an uphill battle looking for an integrated marketing solution. This question in the LinkedIn Marketing Automation Experts group, “MA (Marketing Automation) vs. TAP (Technology Assisted Prospecting) - once and for all” (http://linkd.in/qNZdoQ), addresses the misuse of term Marketing Automation; however is narrowly focussed on prospecting. Ideally the question should address the marketer’s need for TA customer life cycle marketing, the famous 360 degree view of customer interactions with the organization. I don’t like the TACLCM acronym, so I will refer to it as Integrated Marketing.

The 2009 Forester report, B2B Lead Management Automation Market Overview by Laura Ramos, provides a good analysis of what marketing automation means to different marketing and sales executive. They are looking for information from a variety of technology that can include: Content management (CMS), demand generation, CRM, digital asset management (DAM), campaign and marketing resource management (MRM), database services, listening platforms, data mining tools, sales portals and dashboarding functionality.

Integrated marketing provides the marketer the ability use bit and pieces of the various technologies in their marketing ecosystem in order to achieve marketing and sales goals.

 

 

There is no single vendor who can currently offer you an integrated solution. More importantly, the cost and challenge of implementing such a beast would be extremely difficult to justify strategic investment.

That’s why, typically and often pragmatically, you settle for a limited tool set that fits your budget and set more limited goals. You can end up overpaying for functionality that you do not need (e.g. for an email engine to replace the one that you are already using and are happy with) because it comes bundled with the new solution.

Ideally you need a solution that allows you to gradually implement functionality as your comfort and understanding of your marketing ecosystem improves. You should be able to gradually and continually implement additional features in accordance with your marketing needs and goals. In effect, you must first learn to crawl before you can walk and then run. You need the ability to implement integrated marketing piece by piece without having to pay for what you do not need yet.

To take a page from Agile programming techniques, you should only be concerned with what you need today or in the next few weeks, not what you will need next year. This allows you to implement quickly, to derive benefits in the very short term, and to be flexible in accommodating changing needs and a changing market place.

Today’s MA or TAP solutions require you to commit to a specific platform that incorporates features you do not yet need, and use tools that you may not be as good as the ones you are currently using or wish to use.

 

Whatsnexx Studio scenario palette

As a marketer you require a silver bullet that allows you to rapidly implement the functionality you need, to gradually add new functionality as you required it, incorporate new channels and media as they emerge, and to use whatever technology you wish. The only reason I bring this up is because Whatsnexx offers such a solution!