Memo to: CEO
Date: Q1 2015
Subject: Annual Strategic Direction
As discussed, our plans to reduce our dependence on flyers by 35% this year will require some big changes. Yes, we need to think differently about how we use consumer information. We also need to look at how we’re currently doing cross platform planning and measurement.
Here are the steps underway:
STEP 1: Develop media ROI reporting
To plan, allocate and measure our media spend, we need to see the true lift (and cost) of each communication—by channel, and by campaign mix. To this end, we’re building an enterprise-wide customer database that will provide us with robust ROI reporting capability.
Media ROI Reporting will help us make fact-based decisions regarding budget allocation, media mix and weight—for ALL of our online and offline communications (not just flyers!). And better media planning will generate efficiencies that will fund other, more effective, media campaigns.
Data supported decision-making and consumer feedback will replace the gut and historical methods we use today. Within two years, robust Media ROI Reporting will:
- Show us exactly how to grow the business profitably
- Help us support ongoing Customer Acquisition and Retention initiatives
- Be used across the enterprise to facilitate market analysis, real estate planning, product allocation, and even human resources
STEP 2: Make infrastructure and process changes
It’s important we use customer data mining and consumer feedback that we gather in #1 above — BEFORE we go ahead and reduce flyer distribution across the country. Why?
Well, it ends up the four variables we’ve been using all this time do NOT actually define our customer base very well. For example:
- Our data mining shows we have about six different customer segments across the county, two more than the four we’re currently measuring.
- And when you take into account other segment variations (like Urban, Rural, Regional and Ethnicity), we actually have 14 customer profiles
- Add to these 14 customer profiles the geographic and financial data we’ve gathered — and now we have every household’s media preferences ranked, mapped and valued.
With these insights in mind, I propose we first reduce flyer distribution in all unprofitable or declining households—but still send one to anyone who wants one. The real objective, of course, is to move the best customers to a 1:1 platform using direct mail and email.
To better understand our testing direction, have a quick look at the trade area map examples below. What they show is a “before & after” view of a Flyer trade area. The second map shows the TA, with a balanced mix of ranked customers and prospects broken down into sections for testing. Households from each quartile are getting Direct Mail or Addressed Flyers, Traditional Distributed Flyers and Email.
STEP 3: Leverage customer insights to radio/TV broadcast planning
About six months ago, I shared the “new” 14 customer profiles with our Broadcast Agency, along with the media preference data for each profile. The results were remarkable. OOH shifted by almost 50%. And the TV and Radio buys changed significantly too.
Up to this point, we had invested millions of media dollars based on a small survey sample of 50,000 Canadians—many of whom did not even share our basic four customer data variables. By applying data mined from hundreds of thousands of our OWN customers, well, the OOH says it all.
STEP 4: Create internal synergies
Everyone—from our Marketing people to our Agency partners—will need to enter campaign results into the customer database, using standardized measurement criteria. We’ve all got to work from the same customer database. In fact, the multiple customer data silos that exist today MUST come down in favour of ‘one silo for all’. With everyone fighting to keep their budget up and their jobs in place, we need to ensure staff reviews speak to compliance, innovation, collaboration and channel performance.
STEP 5: Measure cross platform
As you know, our biggest challenges are measuring sales conversion, ROI and transaction response, based on our current use of flyers, direct mail, email and social media.
Two tools have helped get us closer to a clearer, comparative analysis. Over the last six months, these tools have generated over 100%+ response increases, together with a series of process improvements and cost efficiencies. The tools we’re using are:
Tool #1: Postal Code
The six-digit postal code is a common link between customer segment location, third party data, many forms of consumer communication, and online and offline sales. It’s also how we’re able to segment customer and prospects target by market. The postal code helps us accurately test a range of communication by single store trade, or by market area.
Tool #2: Tracking Methodology
Tracking the impact and value of media (especially social media) is very challenging and we cannot keep creating and supporting new platforms, apps and associated communication all year long, allocating precious resources to populate social media’s constant need for content. We have to prioritize and do what we need to do to guarantee we’re talking to the right customers and prospects. Combining consumer profile information with segmentation in all aspects of Social Media and Mobile will keep us better focused until the measurement model is perfected.
We now have a testing and tracking tool that links online/offline media response to objective (e.g. trial versus average purchase increase). We can now:
- Pre-test response using online media (in some cases by customer segment)
- Measure response by market smaller geographic areas and overlay variables (e.g., competitive activity, weather conditions)
- Get the right offers to the right customers and prospective customers (even the lapsed ones)
- Stop hitting customers and prospects with duplicated (and sometimes triplicated) communications monthly
- Eliminate wasted advertising spending
- Stop ‘over rewarding’ good customers with trial offers etc.
In conclusion, we are poised to make significant gains in revenue per media ad dollar and improve the way we analyze markets and plan communication this year. We are modernizing the way we do media planning. All I need is the go ahead and we will have all these plans into execution within 60 days and provide progress report bi-monthly.
This article originally appeared in the June 2015 issue of Direct Marketing with the title: “It’s 2015. Does your media plan mind your own business?”
*The subsequent articles in this media optimization series will cover planning, execution and measurement in more detail and include actual case study results where available. Read part two here. For more information, please visit customerlink-mis.com .
Alec Paterson is the managing director at CustomerLink which has been operating in Canada and the U.S. for over 20 years. The company started with a heavy focus on measurement for every form of print communication and has expanded into most forms of media and consumer communication. To date they have measured over six billion consumer transactions and have evolved to become media and consumer data specialists, software developers, supply chain managers and consultants to some of the country’s largest retail organizations and media groups.
Lynne Hoppen has more than 25 years of experience “making the complex simple” for Fortune 500 companies, not-for-profits and government agencies. From launching an employee program to creating a national ad campaign from the ground up, Lynne’s specialty is building emotional connections to brands. Lynne is co-founder and editor-in-chief at Hope & Hoppen Design + Communications, a newly branded Toronto-based marketing agency.