For the last few decades retailers have understood the need to know their customers. In one way or another, we have embraced this concept. Some of us are doing more email segmentation, others are doing display ad targeting and yet others are doing on-site messaging.
As we dive deeper into trying to understand and engage our customers, a typhoon of advanced needs has been created and a deluge of vendors are claiming to have all the answers.
Amidst the rain and wind were critical concepts, like the importance of big data, the role of machine learning and the value that omnichannel marketing would drive. While in the storm we chose our battles when we could, it’s certainly hard to win in gale force winds.
The good news is that grey skies clear up in 2014. The tidal surge is retreating leaving a new value laden practice, powered through the convergence of technologies from the past decade. This is the year of automated customer intelligence which has the potential to change our industry.
Our Understanding is New
We have all heard the promise to deliver the right message, with the right offer, to the right person, at the right time, through the right channel. This chatter started in the late 90’s and continues to this day. Marketers let vendors own that concept, despite the fact no one was truly delivering on the promise.
So what does it take to deliver? Let’s talk about the right offer. To truly know, marketers need to understand who a customer is to their business. This includes historical value, predicted lifetime value, attrition risk and knowing what channels the person engages with regularly and occasionally.
When talking about the right message, data gets even more complex. It may factor in all of the above plus recent behavioral activity, allowing us to not simply understand who, but what visitors have recently experienced through website, mobile sites, apps and even our marketing messages.
This requires large volumes of transactional and behavioral data (big data and CRM), it implies predictive analytics and machine learning and it implies delivering the message consistently across digital communications channels (omnichannel). Looking across your customer universe, it’s an incredible amount of data, but the pieces are in place already.
Bring on Big Data
What makes big data powerful? The truly innovative piece to this puzzle is contextualizing every piece of data, be it behavioral, purchases, returns, demographics or applied learning. What contextualization means is that each piece of info stored in your big data solution is known and expected. It’s what makes the data actionable for our next step.
Machine Learning Capabilities
When you have a large collection of complex questions being asked and answered based on customer data, you are building a machine that automates insight and understanding. One of the most basic questions is, “how engaged is a specific customer currently compared to the past?” When the system arrives at an answer and stores it, it has learned something.
Some vendors are focused primarily on machine learning and they are taking the technology even deeper. They are building vast libraries of machine learning and enabling more complex questions to be asked and answered, such as, “who, out of all my customers, is most likely to leave my brand and are they important to save?” Still, all the machine learning in the world won’t be helpful if you can’t act on the information.
While it’s true definition has been debated, omnichannel marketing is the topic of conversation these days and it has been for a while. Omnichannel marketing has to do with understanding and acting on the information customers provide throughout any channel— display ad, email, onsite messaging, print, social and more.
Omnichannel marketing also demands the various marketing channels be aware of one another and actually working together. The process involves automated channel selection combined with message/offer progression. Both of these practices are based on additional machine learning created to understand when/if it makes sense to escalate the message and/or offer while also identifying the marketing channel that will have the highest probability of getting the desired response at the most effective cost.
The Time is Now
The technologies we’ve discussed are all available, it just depends on how the marketers chooses to solve the CI opportunity. A new breed of solutions provider, building and blending technologies into customer intelligence platforms, will be the approach for some retailers.
Regardless, it’s important to note that while there is no single all-encompassing solution yet, it’s time to start traveling the road. The power of customer intelligence is destabilizing in most markets, impacting the way in which we attract, engage and retain our most desirable and profitable in the customers. You are either beginning to bask in the sunshine, or you will be stuck in the storm.
Angel Morales is the co-founder and chief innovation officer of Smarter Remarketer.