Data is becoming an evermore vital ingredient for effectively communicating with your customers: the more that you know about each individual - from who they are (demographic data) to what they’re interested in (browsing data) to what they buy (transactional data) - the more relevant you can make the messages you send them.
While online retailers can easily get access to individual data sources, tying everything together into a single profile of each customer (commonly known as a ‘single customer view’) is an altogether more difficult task.
This blog post will cover some of the marketing mistakes that occur when online retailers don’t have a single customer view.
1) Making incorrect assumptions about lapsed customers
Being able to spot customers who haven’t shopped in a while and create campaigns aimed at pulling them back from the brink is an important element of customer lifecycle marketing.
Having a single customer view that incorporates a number of different data points is important in identifying who falls into this lapsed/lapsing group.
Using transactional data alone to decide this (i.e. thinking a customer is disengaged just because they aren’t making orders) could result in you sending the wrong message at the wrong time.
Enriching this with other forms of customer data - for instance whether someone has opened or clicked on your emails (marketing interaction data), or they’ve been spotted on site (browsing data) - can help you create a more effective, targeted strategy.
For example, sending a ‘we miss you - here, have [x]% off!!’ email to someone who has been actively engaging with your emails and browsing your site is perhaps not the most relevant message you could be sending them. In this case, using their browsing data (perhaps paired with an incentive) to send new arrivals from a category they browsed or even send them a personal email from customer service to ask them what they're looking for may be what’s needed to get them across the line.
2) Mis-identifying your best customers
In line with the 80:20 rule set out by our good friend Vilfredo Pareto (roughly, at least), your best customers are responsible for a disproportionate amount of the revenue you make. As a result, it’s more than worth your while identifying who these guys are, and pulling out all the stops to get them to stick around and keep spending.
We won’t go into specific strategies for retaining hero customers here (if that’s what you’re after check out this blog post) but ultimately, any such strategy relies on being able to correctly identify your best customers in the first place. And there are several factors relating to having a single view of customers that play an important role in determining whether a customer is truly a ‘hero’ or not.
Most retailers identify hero customers using total revenue, or historic lifetime value. But what if the customer in question is a stickler for buying two sizes and always returning one? What if you’re refunding most of the money they spend with you?
If this is the case then perhaps this customer isn’t quite as heroic as you first thought (especially if you’re the one taking care of the shipping costs).
Without a unified customer view that incorporates returns data, you could be rolling out the celebrity treatment for a customer who isn’t actually that valuable to your business at all.
Letting your best customers fall through the net
On the other side of the fence, lacking a unified customer profile can cause you to fail to identify your best customers. Two key problematic areas are:
- In-store purchases: Syncing up online and offline data is notoriously challenging for online retailers with bricks and mortar stores (some solutions to the issue here). Nonetheless, when a customer’s lifetime value fails to take into account offline purchase data, you may not be getting a full picture of who your best customers truly are, and be marketing to them in a way that retains them.
- Guest checkout purchases: If someone who has an account (or later goes on to create an account) uses a guest checkout, this data may not be amalgamated into their customer profile, meaning you could overlook them as a hero customer.
3) Not sending contextual ‘welcome’ messages
Everyone has that one person who they’ve met countless times in the past, but who each time introduces themselves as though it’s the first time they’ve met you. It’s awkward, right?
Without a single customer view, your brand could be committing the same faux pas.
For instance, someone may have been a loyal offline customer for years, and be making their first online purchase. Or they may have created an account and made several purchases but only just decided to sign up for your newsletter. Or vice versa, they may have been receiving your newsletter for years and only just made a purchase.
Many brands would treat these people in the same way that they treat customers who are completely new - they probably launch a welcome email or series of emails aimed at introducing them to the brand, telling the story of the company, maybe even offering a hefty incentive to make a ‘first purchase’.
By treating all new signups the same, online retailers are wasting a valuable opportunity to send customers contextual, relevant messages at a time when they’re particularly engaged. They’re also potentially eating into their margins by offering incentives to people who don’t necessarily need to be incentivised.
Having a single customer view enables online retailers to automatically trigger the most relevant ‘welcome’ messages based on their past contact with the brand.
4) Not being able to identify your best customers based on channel of first visit
We’ve already established that knowing who your best customers are and tailoring your communication with them is very important.
Knowing where these customers came from is also very valuable information indeed, as it means that you can double down on channels that are likely to deliver you more of these hero customers.
Again, this requires the amalgamation of a number of data points into a single customer view - in this case transactional data (which will help you identify your best customers) and visit data (which will tell you where they came from).
As customer tolerance of irrelevant marketing messages gets ever lower, being able to send messages that catch them at the right moment with content that they’re interested in is the key to getting ahead.
Amalgamating as much data from as many touch points as possible into a unified profile of each customer is the only way of ensuring that relevancy is achieved - and relying on a single source can run you into trouble.