Dumping Cost Per Click

Have you ever felt that you wanted to dump cost per click (CPC) as your measure of ROI but time pressures and lack of tools mean that you remain stuck with it?

We have just received an interesting report from LinkedIn Marketing Solutions which explains how a large proportion of digital marketeers are still using CPC as their ROI measure for digital marketing.

But we all know that CPC, useful as it is, only describes one part of the customer journey.

Part of the problem is that, as the report explains, marketeers are under constant pressure to make decisions quickly; they have frequent budget allocation discussions and need to base decisions on something.

However, we suspect that a bigger issue is that digital marketeers don’t have the tools to measure the true return, based on their overall contribution to sales achieved, from their different online and offline media.

There will often be multiple influences on the journey to a sale, and many of these can be offline, like things sent through the mail, or undetectable on your website, like opened but unclicked emails. It is only when you look at all the online and offline influences in combination that you can start to allocate the value of a sale back to its causes.

This capability is precisely what we have developed in UniFida, so that we can bring together everything that may have influenced each of your customers in the 90-day window before they placed an order.

When you can see for each order both its value, and all the events that led up to it, and then weight them according to how recent they were, you can then do the value attribution job properly.

If you would like to find out more about how we can help you solve this problem, do please send us an email, and we will arrange a call at a time convenient to you.

Read the full report ‘The Long and the Short of ROI’ from LinkedIn Marketing Solutions.


UniFida logo

UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Our data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed, and our ambition is to help our clients stay empowered and ahead in this challenging environment.


Can you escape from Analysis Paralysis?

For many marketeers, a significant part of their day is spent pulling together reports from disparate data sources, and then trying to extract from them the metrics they need to unravel how their marketing is actually working, usually with varying degrees of success.

Well, if you are one of these people, we have a means of escape!

You may recall that our cloud-based customer data platform, called UniFida, neatly joins together all your online and offline customer information and builds a single customer view. It undertakes identity resolution, and links browsing and ordering activity to individual people.

We originally designed this tool to enable you to send very personalised communications to individual customers. But it also allows us to provide you with a complete set of marketing performance metrics. Serendipity happens!

The metrics we produce cover what we expect are your key concerns:

  • Customer metrics to tell you about customer acquisition, retention, and longer-term value
  • Campaign metrics to provide you with the results of all your direct communications with known individuals
  • And media metrics to show you how each of your media channels are contributing to the orders you are receiving (including social, display, PPC, email, mail, and SMS)

We recognise that you may not at this point in time need the whole suite of UniFida functionality, but you may be interested in UniFida Marketing Metrics as a standalone module, particularly when priced accordingly.

We believe that it can give you nearly all the metrics you need to manage your marketing at a very reasonable cost (and with us taking care of all the set up and configuration).

If you want to get a quick understanding of this part of UniFida, then contact us.

And if you would like to us to arrange a teleconference with you, then please email us with a good time to talk.

 


UniFida logo

UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Our data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed, and our ambition is to help our clients stay empowered and ahead in this challenging environment.


Why we chose Matomo over Google as our web analytics platform for UniFida

In some respects, Matomo and Google Analytics are very similar:

  • both have very large user bases (Wikipedia tells us that Matomo is installed on approaching 1.5m websites, and Google Analytics is used on 66% of the world’s most ‘popular’)
  • and both have very impressive analytical functionality and dashboards, with hundreds of alternative views into the data

However, there are important reasons why, when looking for the right web analytics platform to link our clients’ websites with our customer data platform UniFida, we chose Matomo:

  • Matomo gives our clients full ownership of the data it collects and stores. So, we can download from Matomo as much of our clients’ browsing data as they want. In reality we let Matomo do most of the storing, and we only download and keep the data that we can match to known customers.
  • The data provided is not sampled as it is in Google Analytics (unless you buy the GA 360 Premium version). This means that the view you get of what is happening on your website is not biased by the way the sample is selected.
  • There is a retention period of 24 months for the data that Matomo collects. This means that when a browser converts into being a recognisable customer, we can at that point download all their historic browsing activity for 24 months back.
  • Matomo has a GDPR manager to ensure that your website is fully compliant with the regulations.
  • We receive quick and detailed email support for any problems we hit.

And the extraordinary truth is that instead of paying $150,000 a year per client for GA 360 Premium you will pay a very much smaller amount, just based on the number of page views on your website; for instance, for up to 1m page views per month you will pay around $500 for Matomo.

Indeed, the combined cost of UniFida and Matomo for a customer data platform of up to 1m customers will come to around just one third of the cost of just buying GA 360 Premium.

Using Matomo we are now combining the browsing data collected via Matomo, with clients’ offline data, to provide our clients with a cross channel analysis of what is really driving their orders, not just on what they clicked on last. And we are also using it to help us understand how actively individual customers are browsing, and what their specific interests are.

If you would like to discuss further, then please email info@unifida.co.uk to let us know when would be a convenient time to call you.


UniFida logo

UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Our data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed, and our ambition is to help our clients stay empowered and ahead in this challenging environment.


Nine stepping stones for a customer data pilgrim!

Wondering how to become a customer data expert?

For many, the journey from being a basic user of customer data, for example just providing lists for campaigns, to being a fully customer orientated organisation, is perceived as being full of risks, and traps for the unwary. As a result, the journey is often halted before it is even started.

However, you are not in uncharted territory, and by following some clearly defined steps you should arrive at your destination without too many damaging hiccups.

But before you start, you must regard it as a journey where you don’t know clearly what the destination will look like, and you cannot map out in advance with any certainty all the different ways that making good use of your customer data asset will benefit your organisation.

  1. First off you will almost certainly be asked to justify the cost. Because the benefits of using a customer data platform can come from many different areas of the business you will need to bring together multiple use cases – they can range from making existing activities such as email campaigns more effective through personalisation, to understanding how much you can afford to spend on recruitment because you know the longer term value of different types of customer. Knowing how each area of the business works now, you can estimate the percentage gains from improving effectiveness or introducing efficiencies. At this stage they have to be estimates, but you can get colleagues to help you provide well-judged ones.
  2. Next, focus on building a robust first party data platform, that includes both online and offline customer activities. Don’t leave out online browsing data, customer contact history, or email opens and clicks. The platform needs to be updated very regularly and be open to integration with other systems such as email service providers. There is a lot of detail to be covered in this stage such as the customer data schema, and GDPR requirements, but always err on the side of including all available granular customer data as long as it is structured and can be linked through personal identifiers to the customer record.
  3. As part of developing the first party data asset you will want to manipulate some of the raw data material into something more usable. We suggest developing a few key customer variables that are derived from your data inputs. For instance, customer lifetime value, and customer recency, frequency and monetary value can be of enormous use when planning recruitment or making selections for campaigns. You won’t need more than a handful of these derived variables at the start, so focus on those that will make your customer marketing activities work better.
  4. Jump in and start testing new ways of undertaking your marketing. It might be that you start by testing the impact of segmenting your customer base, and giving different parts different treatments, or you could decide to reactivate some of your dormant customers with a carefully designed special offer specially targeted at those most likely to be reactivated. Whatever you do, focus on building a control group to shadow every test, so that you can properly evaluate how much uplift you have managed to achieve. And for every test carefully record what offer was made with what graphics, and how the target audience was selected.
  5. Never stop testing. Even in a mature state you should expect to spend at least 15% of your marketing budget on tests. You will never run out of things you want to try out. If you test too little you will quickly run out of routes to move forward. And tests should take risks; we heard recently that 3D postal packages outperform flat ones – how strange is that?
  6. Start using your customer data asset for longer term business planning. When you understand the cost of customer recruitment, the value per customer, and their rate of attrition you can start to build a business development plan based around real customer numbers. So to increase turnover by £X next year, you will have actual customer numbers to recruit, and you will know how much that will cost, and over what timescale the value comes back.
  7. Keep on investing in customer analytics. You may want to be able to project forward from a first order to predicting how much a customer is going to buy, and from this how much you want to spend on him. Equally if you have several competing brands, or different product categories, you may need to be able to predict which offer is likely to get the most valuable response from each customer. Customer analytics and marketing tests go hand in hand, and if you give up on either you may find yourself moving backwards.
  8. Keep your sponsors engaged and behind you! They will need to see the big picture as you move forward, explained in relatively simple terms. Each quarter you will have spent £X, and got £Y back in terms of enhanced customer value. Sometimes £Y will be less than £X because you have been investing heavily. Don’t let this put you off; as long as you can explain clearly how that investment will pay back over time your sponsors will remain on-board.
  9. And finally ensure sustainability. This means building a team that can survive without any one of its members, including yourself. It also means recording everything you do, the messaging, the images, the way campaigns were structured, the selection tools you used, the routes you chose for order fulfillment etc. etc. All too often good people leave an organisation with little recorded evidence of what they have done, and thus create a knowledge chasm that can take many months to fill.

If you want to be a customer data pilgrim, and are looking for support, we are here to help. We can help you develop your business case, build a customer data platform, undertake customer analytics, and evaluate results.

We can also offer you a free copy of ‘The Marketers Customer Data Platform Resource Book’ which we published recently to help people starting out on the customer data journey.  Simply sign up for our mailing list and we’ll send you a link to download the Resource Book.

Are you losing customers to your competition?

Are you leaving the competition an open door through which they can capture your best customers?


Most organisations will protest that they are not, and a sizeable proportion of these will be wrong!

The reason is the gap that often exists between how customers expect that they should be treated, and the reality of what actually happens.

Let us give you some examples:

  • We know of one company that sends its entire customer file an identical email a hundred times a year
  • and a second that takes at least a month between recruiting a new customer and sending them a welcome catalogue
  • a third that gives up on customers who have not been active in the last two years
  • a fourth that can’t distinguish between a currently dormant but previously valuable customer who is browsing on their website, and an unknown punter
  • and a fifth who doesn’t understand the longer-term value provided by customers from different recruitment channels

To start to put things right we usually find that all areas of the organisation that have responsibility for some aspect or another of looking after customers need to put their hands up, and agree that things are not going as well as they might.

At this point, with luck, a consensus will start to emerge that something needs to be done to fix the problem; this will usually involve introducing some kind of technology that takes an holistic view of customers and how they are interacting with you.

If you feel the need to mobilise your organisation in this direction, and make it properly customer centric, then we are here to help.

For a start we can offer you a free copy of our short and readable book ‘The Marketers Customer Data Platform Resource Book’; to be sent this we just need you to email us back with your postal address. Alternatively, simply sign up for our mailing list and we’ll send you the download link.

And we would welcome the opportunity to have a chat; just give us a call on 0203 960 6472 and ask for Julian Berry. He is here to help.


UniFida logo

UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Our data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed, and our ambition is to help our clients stay empowered and ahead in this challenging environment.


Why most ‘CRM’ systems are not really what they claim to be!


On the surface CRM systems give the appearance of covering most things you might need when you are looking for technology to help you manage relationships with customers.

But the reality is that they have been designed to only deliver the basics.

Yes, they manage what they call ‘contacts’ but these are usually only matched together using email addresses. The much bigger and key role of identity resolution is left unresolved.

Customers in fact have many different identifiers like mobile phone numbers, cookie IDs, postal addresses, account numbers etc and there are usually multiple versions of each relating to a single customer. All versions of these personal identifiers need to be stored so that customers reaching you through multiple channels can be properly identified.

Next CRM systems only include a part of your customer data. Your customers browse your website, they visit specific pages, they arrive there via different forms of on-line advertising, and all this vital information needs to be included in your single customer view.

CRM systems may report sales at a company or salesman level but they don’t look at longer term customer value, or how different channels and different customer recruitment propositions bring different types of customers with different kinds of customer needs.

CRM systems may undertake bulk email campaigns, but these are not usually synchronised with other channels such as post or SMS; also given that they don’t generate any added value customer knowledge such as probability of response or likelihood of attrition, the selections they make can only be via quite simplistic filters.

CRM systems were born out of the need to enable sales forces to record their activities and results; they were not designed to ingest data from multiple online and offline sources, and deliver a complete customer view.

Over the last five years or so a new breed of technology, Customer Data Platforms or CDPs, have been developed to allow you to properly relate to customers, and to make all aspects of your marketing accountable so that for instance an online order can now be linked back to the several online and offline contacts that preceded it.

If you would like to find out why you might need a CDP as well as a CRM, please see our presentation:


UniFida logo

UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Our data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed, and our ambition is to help our clients stay empowered and ahead in this challenging environment.


Predicting the future value of your customers

Did you know that by the time you on-board a customer you will be able to accurately predict their future value?


From which it becomes clear that the decisions you make at the customer recruitment stage will determine that key metric of future customer value.

These are typically decisions about the recruitment channel and tactic you use, the types of customer you are targeting, and the nature of the proposition you are making to them.

Now you should also take into consideration the fact that a large number of customers that businesses recruit will yield negative value after the costs of recruitment have been deducted, whilst others will be strongly positive.

So, what as a marketer, should you do about this? First stop focusing on cost per acquisition; it’s the wrong metric to be guided by.

Next, we suggest that you should take a multivariate approach so that you consider all the factors together that define customer groups in order to focus on the ones that will bring you value.

We have recently been helping a substantial life insurance broker do this and the result has been transformational; for instance, they can now balance factors like the risk of attrition against the amount of monthly premium paid. They have found that a substantial number of their marketing tactics are yielding negative customer value and have had to be abandoned.

If you would like to discuss how to target your customer recruitment for longer term value then please contact us.

If you would like to read a case study about how we did it then please read our post:

 


UniFida logo

UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Our data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed, and our ambition is to help our clients stay empowered and ahead in this challenging environment.


Solving the challenge of allocating recruitment budgets

Targeting Longer Term Customer Value

Using data science to target multi-channel marketing recruitment spend towards longer term customer value

This post will explain why targeting your marketing spend towards longer term customer value is not a one-dimensional problem. For instance, a group that may look bad by one criteria like retention may within it have sub groups that are of high value, and others that are the reverse.

Background

This case study has been derived from working with a substantial life insurance broker who has been using multiple channels to recruit customers in the UK.

We were asked to look at how best to target customer value as judged by the commission returned in the first 24 months from recruitment.

To give some insight into the kinds of issues we were presented with, lapsing early (i.e. in the first 24 months since inception) was one of the main causes of loss of customer value.

Lapsing early was found more amongst people recruited via outbound direct marketing channels than through more self-driven channels such as inbound to web. It was also correlated with the sum assured and the monthly premium. However direct recruiting is cheaper and higher premiums bring more commission.

The relationship between lapsing early and age was non-linear, with both younger and older people lapsing more than those in the middle.

As well as different recruitment channels having different costs per acquisition they also attract different age groups and sums assured.

Approach

So with so many factors at work how did we set about finding the best marketing tactics to deliver the highest return on recruitment marketing spend?

  1. We discovered that lapses in the first six months are very reliable predictors of the propensity to lapse within 24 months for every customer group (we got an R² of 0.99 when fitting our predicted curve to the observed data); this meant that we did not have to wait for 24months worth of history before making a prediction of lapse rates.
  2. The customer groups we were using were defined by a combination of age range, sum assured, and channel.
  3. We used a combination of known lapse experience with predicted to build the overall expectation not only of overall lapse rates but also when lapses would occur.
  4. The net customer value metric we used was the commission income up to 24 months after probability of lapse minus the cost of recruitment from the channel used.
  5. Hence for each customer group we could predict the net customer value; we also knew the historic number of policies being sold in each group and hence we could calculate their overall value.
  6. The net customer value by customer group ranged from -£1X to +£5X. This enabled our client to focus their marketing on areas where the net contribution was positive, customer numbers were substantial, and the required age groups could be targeted.

In conclusion

The focus for this client’s marketing turned away from broad brush channels like daytime TV towards direct marketing approaches. This switch made a very substantial difference to returns but with two caveats. First many direct marketing channels have a finite capacity, and second all recruitment channels suffer from saturation; in other words, the greater your spend in them, the worse the return.

However we strongly recommend that when looking at the effectiveness of different marketing tactics that you take a multivariate approach; that is allow the full effect of all factors on net customer value to be taken into account.


UniFida logo

UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Our data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed, and our ambition is to help our clients stay empowered and ahead in this challenging environment.


Customer Value Analysis

Furniture Retailer Explores Customer Value


The Situation

An upmarket UK furniture retailer uses customer value analysis to determine whom to recruit and how best to cross-sell.

The Client’s Business Goals

Initially the client, who had historically mainly monitored store and product performance, just wanted to understand the longer term value of customers.

We proposed extending the brief to looking at the characteristics of high and low value customers, and also the typical customer journey in terms of second and subsequent purchases so as to inform crm activity.

Our Solution

  • Step one was to assemble customer level records from very detailed transactional history, and in particular to join together multiple transactions into one sale when they were closely linked in time
  • Step two was then to count longer term value by recruitment time period (the data going back almost ten years)
  • We then matched the customer data to external demographic and lifestyle data in order to see if there were any characteristics that differentiated high from low value customers, or whether that was influenced by the store they used to make their first order
  • Next we looked the time between first and any subsequent orders
  • And finally we looked at patterns in the sequence of purchases to see, for example for all purchasers of product category A, what were their most likely subsequent purchase categories

Key Benefits

  • An initial and surprising finding was that it was not possible to differentiate high from low value customers by their demographics or lifestyle; however there was a major scale difference between high and low value customers at first order, which was not challenged by subsequent orders. This enabled the client to focus from the start on cross selling and retaining those with initial high value purchases
  • Our next discovery was that nearly all second orders came in the first year since first order, except for a small number of people buying replacement covers for sofas and chairs after a few years. This implied that follow up CRM activity needed to be initiated immediately after first order, and that it was not productive after the first year had elapsed.
  • The third key benefit was that the analysis showed clearly what to cross-sell; we were able to find very distinct patterns in the types of product purchased at second order compared to first order.

UniFida logo

UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Our data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed, and our ambition is to help our clients stay empowered and ahead in this challenging environment.


What’s indispensable for your marketing data ecosystem?

What should be the ‘condicio sine qua non’ of all marketing data ecosystems?


The answer is very obvious, but very often overlooked; a marketing data hub or customer data platform that joins together all the front end and back end data.

Underpinning virtually all the multitude of martech applications there is the ever-present need for a solid data hub into which, and off which, they can all feed.

For instance, take website personalisation; it clearly doesn’t make sense to focus the nature and content of a tailored customer experience based just on their recent browsing, when you could also know if that individual was a loyal and steady customer or someone who was only cruising for sale offers.

Or how can you respond to a subject access request under GDPR if your email service provider and order processing system are not in some way linked around individual customer identities.

So what are the key elements in a customer data hub?

  • A means of joining together every data item that relates to an individual using all possible match-keys from cookie IDs to postal addresses
  • Persistent ingestion and storage from all on-line and off-line sources of every item of data from individual transactions to inbound or outbound contacts without summarisation or concatenation
  • Accessibility to other systems both for ingestion and exportation of data that is relevant for that application

There is also the critical organisational element; the data hub is far more likely to be successful, and to provide value, if it is owned and manged by marketeers who get the reason for having it.

This doesn’t mean that the development of a data hub is simple and not needing to be built in collaboration with IT experts. Data is also often untidy or in need of modification like miss-spelt addresses.

There is also a plethora of potential data sources to be fed into the hub, such as:

  • Order processing systems (e.g. for order read donation for charities, and policies for insurers)
  • Website browsers
  • Call center contacts
  • Email service providers
  • Third party data sources like lifestyle overlays or prospect lists
  • Identity resolution tables such as gone-aways
  • Loyalty card applications
  • Appointment booking systems

to name but a few we have encountered.

And then the hub once fed has to drive an ever-growing array of marketing tools. At a very high level these tools either support insights or actions. Typical examples include:

  • Dashboards and data visualisation
  • Digital personalisation
  • Email service providers
  • Campaign selections and response analysis
  • Contact centres
  • DMPs for digital media targetingCustomer research

Our view is that marketeers who plan their technology eco-systems without first planning a customer data hub are giving themselves an ever-growing problem. On the other hand, get the data hub right, and there is no limit to what can grow out of it.


UniFida logo

UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Our data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed, and our ambition is to help our clients stay empowered and ahead in this challenging environment.