Traditionally, the worlds of customer relationship management (CRM) and media buying have been almost entirely separate—each with its own unique data, techniques, tools and specialized expertise. However, recent trends in the data and technology landscape have caused a blurring of lines between these two areas of competency. In particular, the increasing use by media buyers of programmatic (or automated buying techniques) as well as data and tools that selectively target individuals rather than generalized demographic or behavioral targets, bears strong resemblance to methods that have been long established among CRM practitioners. It is natural to conclude that these two core facets of the marketing ecosystem may finally be in the process of coming together, and the emergence of CRM targeting may prove to be an important bridge that facilitates this integration.

The fundamental purpose of CRM is the intelligent orchestration and management of the customer experience to maximize customer engagement, loyalty and value. Over the years, CRM programs have made significant strides in achieving integrated, multichannel customer engagement as the number of touch points connected to individual-level customer intelligence has expanded. These advances have significantly enhanced the effectiveness of CRM programs in driving increased sales and generally resulted in a better customer experience. Nevertheless, CRM programs tend to remain confined to a discreet set of brand-owned direct and interactive touch points.

From the perspective of the CRM practitioner, being relegated to a narrow set of outbound and inbound channels represents a fundamental barrier to proactively reaching out to stimulate interest and activity among mid-cycle customers, as well for reconnecting with customers whose engagement has waned or lapsed. Standard practice has been to send email to such individuals; however, for customers who are truly disengaged or with whom the product is not top-of-mind, the performance of email communications tends to be very low. In fact, many CRM programs are experiencing a decline in email engagement rates—particularly among the Millennial generation. Additionally, there is the challenge of re-contacting anonymous customers because direct mail and email is not even an option for reaching them. For these reasons, CRM marketers need additional tools and channels for proactively engaging certain types of customers. The extension of database-driven customer dialog into the digital environments in which they live is a natural next step in the evolution of the CRM practice and the emergence of programmatic advertising platforms and retargeting tools has created a gateway for this evolutionary step.

CRM retargeting is an emerging capability that has grown out of the practice of site retargeting and represents the point at which CRM practice has met with the world of programmatic advertising. Site retargeting is a commonly applied strategy whereby display ads are programmatically served to recent visitors to a brand’s website or other brand assets. As consumers, most of us have experienced site retargeting firsthand when a casual website visit appeared to trigger a multi-week barrage of display ads from that very website. The offspring of site retargeting, CRM retargeting, is similar in that it involves the serving of display ads to select individuals; however, the selection of those individuals is driven by intelligence from a customer database. In other words, using retargeting technologies and services, online ad messages can be targeted and personalized with the same rigorous level of customer intelligence as email and direct mail communications.

Similar to other targeted or personalized communications, the CRM retargeting process starts with the customer database by selecting a universe of customers for communication and assignment of supporting information and scores to specify which customers should receive which content, creative version, offers, etc. The resulting file is then extracted and transferred to a specialized intermediary where it is matched (or onboarded) and converted to anonymous online segments. The resulting onboarded file can then be deployed through any of the major ad networks or social media platforms to serve the customers contained with the display ads assigned to them.

As a capability, the buzz around CRM retargeting has been quickly gaining steam. It aligns well with the need of CRM marketers to proactively and intelligently engage customers through a broader set of channels and it has shown promise among early adopters. It is, nonetheless, a relatively new practice and most CRM programs are either gearing-up for initial experimentation or are actively engaged in the testing and learning phase of its application.

For those gearing up for initial experimentation and development, it is critical to enter the process with a clear strategic vision that articulates exactly how this new capability will not only impact key performance indicator metrics (KPIs), but also how it will enhance the value of the program to the customer. One key question is how and when to apply it. Tactically speaking, the capability potentially opens a new channel for re-engaging lapsed customers and defectors. At a more strategic level, the capability potentially offers an opportunity to extend and enrich the overall consumer dialog. Regardless of those specific goals and objectives, it is essential that CRM marketers bear in mind that effective management of the overall customer experience remains the foundational driver of program success. Therefore, it’s vital the team responsible for developing, testing and establishing the practice of CRM retargeting understand how the capability is intended to enhance (or at least not harm) the customer experience and the rules of engagement are clearly defined.

The nature of the customer dialog enabled by CRM retargeting is fundamentally different than the communication driven by traditional site retargeting. The objective of site retargeting is typically to drive sales conversions among consumers who are actively researching or considering a purchase. As such, timeliness and frequency of ad impressions tend to be critical drivers of campaign performance. The key difference lies in the fact that messages delivered via CRM retargeting are being delivered to a customer with an existing relationship with the company or brand, and that customer likely has a higher level of expectation regarding the nature, frequency and timing of such of communications.

There is also a sense of trust that is a vital aspect of customer engagement with a CRM program that is potentially jeopardized if the consumer perceives inappropriate use of anything they consider to be personal information, or if they feel annoyed with excessive frequency or communications they find overly intrusive or overbearing

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. One potential aspect of concern is triggering the “creepiness” senses of the customer—creating the perception that one is being stalked or engaged in a manner that is overly familiar in the form of a display advertisement. Consumers experience display advertisements in environments they perceive as somewhat public; an overly personalized tone or reference to specific purchase history or profile information are obvious ways these negative senses can be triggered.

For CRM practitioners venturing into the use of CRM retargeting, it’s also important to understand and appropriately leverage the unique dynamics of online media. For this reason it is typically best to work with the organization’s media department and agencies. Such experts can be extremely helpful in identifying the types of sites and environments that align best with CRM messaging objectives. Additionally, there may be significant cost benefits to integrating with the brand’s general media buys.

Optimizing the number of times an individual customer is served a particular message is another important aspect of CRM retargeting. In a relationship context, excessive frequency behind a certain message is a bad thing; however, more than a single exposure is probably necessary. There really isn’t a firm number of impressions that qualifies as appropriate, it may depend on a number of factors—e.g. the customer’s tenure, the subject matter, the nature or value of an offer, etc. For display advertising, a single exposure is suboptimal for achieving response—this dynamic stands in stark contrast to the email and direct mail dynamics that CRM practitioners are accustomed to. Understanding and optimizing message frequency should be a key objective for the test and learn phase of retargeting applications.

In addition to optimizing frequency, there is much to learn. Aggressive testing, learning, refinement and optimization should be the primary objective of the initial year of CRM retargeting applications. Ultimately, CRM retargeting should result in improved engagement rates, customer value and customer retention; however, dialing in to the optimal targeting, timing and communications strategies takes significant trial and error, not to mention time and investment. But, of course, testing, refinement and optimization is core to the mindset and skill set of CRM practitioners.

Serving as the senior vice president of analytics for Targetbase since 2008, Bill Cole is an experienced analytics leader, strategist and innovator with a 20-year track-record of driving better marketing decisions, performance and results.

This article originally appeared in the January 2016 issue of Direct Marketing.

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