Stop competing against yourself for your own customers
Does your organization have multiple teams running separate campaigns to reach the same customer? You're not alone. Contributor Victor Wong explains how you can cut back on the inefficiencies and put the customer first.
What do telecom, financial services and CPG (consumer packaged goods) have in common?
Besides spending some of the highest amounts on digital marketing, the companies in these verticals all sell multiple product lines to the same person. Through data management platforms and identity resolution solutions, they’re now beginning to realize that, in many cases, their multiple product marketing teams have all been paying to reach the same customer.
Today, brands in these industries will often run separate marketing campaigns for each product line and designate distinct media budgets by department. This is a relic of how companies operate in silos, with separate P&Ls (profit and loss statements) due to mergers and acquisitions having separate accounting software in the past, or just accountability structures.
For a bank, if wealth management has an acquisition target for the year, it will spend whatever it takes to reach that target, even if investment and brokerage departments are simultaneously trying to get the same existing customer to trade more with them. This not only creates inefficiencies as far as redundant or decentralized expertise and talent, but it leads to bidding up media for the same target customer — leading to more costs overall.
A CMO of one of the biggest banks in the world recently lamented to me that they have groups fighting over the same customer and bombarding a person with multiple offers a day from different groups. Every product group in this legacy structure would talk about “their” customer, when in fact, it’s the company’s customer.
This bank has now made it clear that there is one owner of the customer — the company. In effect, the bank has stopped competing with itself. Why does that matter? Capping universal frequency and delivering the right product and offer has led to higher customer acquisition and not just lower costs through centralization. This achievement gets the bank closer to its goals.
Companies like this bank have growth targets. They have strategic priorities. In the digital age, they can now optimize companywide for those targets, and the CMO can move from running a loose confederacy of aligned teams to a strong federal system with a leader ruling across product lines.
Creating a customer budget
Savvy companies are increasingly choosing how to prioritize their marketing spend as they accumulate knowledge of the customer thanks to CRM (customer relationship management) and DMP (data management platform) technologies that establish a 360-degree view of customers.
If you know what a customer is worth today in each product line, you can decide as a company how to target your buyer and then personalize which product to offer first.
Telecom firms have been among the earliest to adopt this strategy. They recognize that a large percentage of the country is already a customer so they must be smarter about spending their marketing dollars to reach prospects and upsell current customers.
When a third of the country is buying one product from you already, you need to make sure you aren’t already wasting 33 percent of your budget sending an acquisition message to an existing customer of a certain product.
So, companies now consolidate their media spend across all product lines and create essentially a “customer budget” instead of a “media budget” where they decide how much they’ll spend to get new customers, upsell existing ones and let consumers know about new functionalities or announcements.
These pioneering companies implement customer journey and off-site personalization strategies where they prioritize which products get marketed first, what gets shown if a customer isn’t converting for that product or what product to show if a consumer already has the product. These companies achieve targeted messaging without overpaying for hyper-targeted or overbidded media.
Financial services with their credit cards, loans, checking and investment products are close followers in this trend. CPG — with their multiple daily use products and e-commerce operations increasingly selling the full portfolio — are next in this adoption curve. Travel platforms selling upgrades, activities, hotels and airfare are getting there.
Eventually, every sector will have a customer budget and customer marketing, and we’ll stop thinking of marketing products first and start thinking of marketing to customers first.
Opinions expressed in this article are those of the guest author and not necessarily MarTech Today. Staff authors are listed here.