Marketing Automation - just more of the same?

Whilst making a purchase of bedding at a well-known UK department store the cashier asked if I had a coupon.??She insisted I check my app because there is?always a coupon on bedding at this time.??The cashier was right of course – there was a coupon and I got the discount.?

What was wrong however was that brands marketing automation.??

When your team members know what coupons are coming, there is a good chance your customers know too.??

So what’s the challenge here???I still bought the bedding and felt good about getting the discount.??

Well it all comes down to the marketing automation design and the intended purpose.??If that coupon was supposed to get me into store, it had failed.??If it had intended to get me to purchase in that category it had failed.??If it wanted to grow my spend or increase my profitability, it had failed – certainly in the short term.

The problem with marketing automation is that, well, it can be just too darned automated.

If your motivation is product or category led and you simply want to promote short term sales regardless of relevance to your customer, then feel free to send out communications at regular intervals – automated if you will – to drive that traffic.??However, you need to keep in mind a couple of things.

• Firstly, creating a regular schedule of promotions will cause your best customers to equally synchronise their purchases.??They’ll quickly learn when your promotions run and will change their purchase patterns to match.??You’ll still have loyal customers; they just won’t now be as profitable.
• The second issue is the opportunity cost.??You only get limited time and attention from your customers and you’re competing not so much with your direct competitors, but with anything else that demands their time.??If you waste these opportunities with automated and irrelevant communications then you train your customers to consider you just a little bit less relevant too.??They will check your offers less often and open your emails less frequently.

The challenge with marketing automation then is not the tools or technology, but how these tools are used.??To explain this further, it’s worth separating two distinct customer marketing approaches which are Direct Marketing and CRM.??

What tends to pass for marketing automation is typically just direct marketing.

The Chartered Institute of Marketing defines direct marketing (sometimes called database marketing) as “any activities which make it possible to offer goods or services or to transmit other messages to a segment of the population”.??In this respect, whether a mass sales promotion or a segmented ‘spend stretch’, these types of marketing campaigns are simply that – direct marketing campaigns.

The campaigns themselves are perfectly fine - mass communication of a new product or a sales period makes a lot of sense. Doing segmented communications to make campaigns more targeted and relevant also makes a lot of sense. What doesn't make sense is to simply automate these - whether by actual automation or repetitive marketing planning.

Marketing automation tools help to automate aspects of the campaign creation for the business – making it easier to setup the campaign and execute it, but they’re not actually automating the marketing for the customer.

This is really where CRM comes into its own and the giveaway is in the name – customer relationship marketing.??This should be about how you use marketing to manage a customer relationship; not product or brand marketing, not marketing to a segment of customers.

CRM is marketing focused on individual customers and their unique behaviours and marketing automation is the process of enabling this.

Doing this well means we’re able to interact and intervene with our customers individually; anticipating their needs, recognising changes in their behaviours and removing friction from their interactions with us.

Automating this however is fraught with challenges and needs a structured approach.??If we take a simple ‘win back’ campaign, for example, we can structure the CRM approach around a model called the?Four T’s?which are Trigger, Timing, Tactic and Test.

Trigger - What constitutes a lost customer???For years I was a loyal, high spending grocery customer and then slowly, my everyday spend migrated elsewhere.??I never actually stopped shopping with the grocer, I just spent less and went less frequently.?There was no actual ‘event’, just a slow migration.

When we setup these triggers we need to keep in mind that customers are rarely black and white.??They don’t simply stop shopping, they start shopping somewhere else.??We’ll see this evidenced as subtle category change, spend change and frequency change – but less likely see it as a single event.

In this case, the trigger is more about the propensity to lapse based upon a number of leading indicators than a simple ‘lapsed’ event.

Timing - When did the customer last enter this campaign???If every time their behaviour ‘slips’ we trigger the same response, we’ll be conditioning the customer to do this behaviour to get the reward.??Customers may even stop identifying themselves on purchases for a period of time to trick our systems into giving up the goods.

This means we need to consider if this is the right timing for this customer based on their previous activity, previous campaign inclusion and their previous responses.

Tactic - What do we do now we’ve decided to talk to the customer???Well, this depends on the nature of the trigger.??A communication sent in response to a customer trying a new category will be very different to one responding to potential lapsing behaviour.??The former would be all about re-assurance and re-trial and the latter about showing how we value their current spend.

The tactic could also just be a simple message or reassurance such as ‘we miss you’ – it’s not always about the money.

Test - It takes a lot of effort to do CRM well, but the rewards can be great if we’re able to react and respond to a customer’s behaviours with relevant and timely communications.

This doesn’t happen by chance though and the key to doing this well is to test, test, test.??Testing should be at the heart of any CRM strategy and an ongoing culture of test and learn is really a prerequisite for moving from Direct Marketing to CRM.

You can’t simply brief in a CRM campaign and expect to get results – you truly need to understand the triggers, test out the tactics and monitor the responses so that you can tune the marketing automation to get the best outcome.

When it comes to building customer relationships, marketing automation is not about just automating direct marketing.??Instead, it should be used to automate the recognition and response to individual, customer level behaviour changes – more marketing personalisation than marketing automation.

Photo by?Laura Ockel?on?Unsplash