A Data-Driven Culture and Insights-Driven Marketing: Strategic Practices from Billion Dollar Brands
Understanding a few key cross-functional relationships can greatly impact your retail Acquisition, Conversion and Retention efforts. Valuable strategies and tactics come to light when information is shared among your key commerce-driven teams that should include, but not be limited to, Marketing, Merchandising, Buying, Planning, Operations and Design.
Your business is fueled by a number of factors, but let us focus on three: Marketing, Product and Customers. While these core elements combine to ultimately drive sales, there are typically owned by separate teams with specific areas of focus, and frequently there are relationships that are not known, shared or capitalized on.
Traditionally, Merchandising, Buying, Planning and Design are focused on sales and margin and continually managing a brand’s product offering. Operations-oriented teams execute the setup and/or allocation of merchandise within stores and online. The Marketing team builds relationships with customers across various channels, environments and devices. CRM teams tend to focus on trends centered around various customer profiles, such as first-time buyers, repeat buyers, brand advocates and loyalists, social activity and conversion behavior, just to name a few.
Let’s take a look at a few examples of how the relationships between these core teams can open up valuable new insights to help you grow your business.
Acquiring customers with increased lifetime value
Understanding the lifetime spend and projected lifetime spend of customers who are acquired and active across various social channels can help you better manage your budget allocation and presence within those environments. You may find new demographics and customer segments that are interested in your brand, but you have never thought of in the past. For example, by expanding your presence into Instagram, you may find you can begin engaging with a younger demographic and acquire customers who may ultimately have a higher lifetime value.
Bringing new customers to your brand
Knowing the number of first-time buyers, along with sales and margin, changes the value of a product or category. We certainly think of Marketing efforts as an acquisition tactic, but many times the product or category itself is an acquisition driver because of its inherent attributes.
Your number one volume-driving item pays the bills now, but do you know if your mid-ranked volume-driving items have an above average rate of new customers purchasing them? If so, those products certainly have a different value, as they are driving sales and your customer base. The next question is how to exploit this in the appropriate manner online, in stores and across your marketing assets.
For example, what if the introduction of a floral patterned dress into your typically solid and striped oriented assortment just meets your sales expectations but has a new customer purchase rate two times the average in the dress category? Now, you know floral patterned dresses not only have value in driving sales, but also of bringing new customers to your brand.
Of your most active purchasers, do you know which tend to buy at full price and those that only shop when you offer an incentive? Of those who need an incentive, looking at groups of customers by certain AOV ranges can allow you to speak to them with different offers to maximize sales and preserve margin, rather than offering blanket promotions.
Do you know the last marketing tactic that triggered an individual to purchase? Do you know where she is most active? You can establish a better customer relationship and streamline your marketing efforts if you know an individual’s preferred method of communication, whether it be SMS or email. Start where a customer is most active. If she comes to you via Facebook a majority of the time, why send her an email first?
By merging the attributes of Marketing, Product and Customers you can inspire better dialogue and collaboration across your cross functional teams. Enhanced strategy can be formulated with data, and trends can be capitalized on faster. In the end, a better customer experience will be realized.
Andrew Rotteveel is the director of product strategy at Listrak. He began his career at QVC and went on to serve as director of merchandise planning and director of ecommerce operations for Urban Outfitters, as well as director of global planning at Gap.