Metrics are worthless if not used correctly. Lifetime values, driving repeat customers, physical vs digital channels – data points can make or break digital marketing strategies, and they must be fully understood to be fully unlocked by startups and corporations alike.
This has been a major point of discussion this month in New York City. The Lead Innovation Summit brought together more than 1000 brands and retailers, digital natives, tech start-ups, investors, dealmakers, analysts, creatives, academics and media over two days. Let’s unpack the biggest takeaways from the summit and how they need to be integrated today for a better tomorrow.
Why retailers continue to misuse customer data
In 2019, you would think that most top-tier brands would have their omnichannel strategy figured out, but surprisingly, that’s not necessarily the case. I met with an executive at one of these top tier brands at the Lead Innovation Summit who sheepishly admitted to me that, in fact, they had not yet unified their brick and mortar POS and e-commerce system.
This means that if you want to know the value of a customer in this organization, you have to run two separate reports from two separate systems and pull out a calculator. This to me is the most obvious mistake when it comes to customer data; when determining customer value, it doesn’t matter if they’ve shopped online or in-store. Commerce is commerce. If you need a calculator to understand your customer’s value, you’re doing it wrong.
Why metrics matter
It’s a given that you need to combine e-commerce and POS data to properly understand a customer’s value. But understanding a customer’s value is the tip of the iceberg: every touchpoint with the customer whether digital or physical needs to be informed by it. Let’s say you’re a brand with 10 stores in major markets and a strong online presence. You have a customer visiting you from out of town at your flagship store in New York City. This customer doesn’t live near one of your physical stores and in the past year has done about 90% of their shopping with you online.
In terms of total dollar spend, this customer is in your top 10% of all customers. If you were “doing it right” you’d have your New York City staff equipped with the customer’s history across all stores and online and the store would use this data to drive a better experience for the customer. Not only should they understand this is a customer who needs special attention, but they should also be able to make recommendations for product that aligns with the customer’s historical preferences. Having access to the customer value across all channels is table stakes, but being able to go just a little deeper will help you drive experiences in the store that will create a customer for life.
Why omnichannel retailers must treat every customer the same
So, you’ve aligned customer data across online and offline channels and you’re using that data to drive a better experience in-store. But you also need to be driving a great experience online as well. In the same way, a store salesperson would recommend products based on your historical preferences from all channels, your e-commerce site should do the same. If you have a “recommended products” feature on your site, it should be informed by more than just online purchase history.
That 90/10 sales split of online/offline can go the other way and your e-commerce system should know your customers, as well as your stores, do. In addition to targeted recommendations, customers also expect unification of the following: they want to be able to access stock availability across the enterprise. If you don’t have the product in your warehouse but have it in stores, they want to buy online and pick up or ship from store.
Customers want unified gift card and loyalty programs. And they want unified promotions and couponing. The unification of offline and in-store customer data goes beyond just understanding the customer’s value. There are many inputs that help drive strong and consistent customer experience.
But the biggest mistake…
From a marketing perspective, the biggest mistake that continues to persist is not segmenting customers properly. This applies to both the experience of shopping your site as well as the email marketing program. The online experience and emails your customers receive should be tailored.
From a technology perspective, this a solved problem. If your customer has never bought denim from you but has purchased many tops and dresses, don’t send them an email promoting a new denim line. If your customer is a sale shopper, don’t overload their inbox with new arrivals. If you demonstrate in your marketing communications that you understand your customer, it will drive sales.
Companies today must realize that the game has changed. They need to focus on the unification of e-commerce and in-store data, unlocking this data to drive better customer experiences, seamless online and offline experiences and proper segmentation of customer data. Each of these elements is critical to know not only what moves the needle, but why.