Marketing Boot Camp: Path to Purchase

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Path to Purchase: Navigating the Changing Consumer Landscape

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THIRD Engage

Path to Purchase: What does it all mean?

The journey a consumer takes to purchase a product, service or brand.

Old Path to Purchase:

Research Visit Store Purchase

New Landscape to Purchase:

"Gone are the days of retailers only worrying about keeping up with their competitors. Today, the key to winning at retail is keeping up with your customers," said Rodney Mason, GVP of Marketing at Blackhawk Engagement Solutions, an international incentives and engagement company.

What is the

Prevalent Internet

?

Smart Phones

Laptops

Desktops

Tablets 71%

66% 50%

41%

Peak Time 4 pm 9 pm

37% shop at work

58% shop at home while watching TV

Shopping List

Showrooming

Resource: Blackhawk Engagement Solutions Where Its At Report

Free Webinar Tomorrow August 26 from 11 am 12 pm

BLAH

BLAH

BLAH BLAH

B BLAH

BLAH

How Do You Break Through

The Noise?

Deliver the Right Message At the Right Point in the Consumers

Journey

Web TV

Mobile

F&F

Radio

Resources

Measure What Matters Most Report by Google

Where Its At: A Connected Shoppers Study by Blackhawk

Thank you!

I would love to sit down with you and help drive your business to the top!

Introduction 3

Methodology 4

State of Mind 6

Connected Shopping 7

Emerging Shopping 8

Mobile Price Match 10

BOPIS 12

Social Media 13

Loyalty Programs 14

Digital Promotion Delivery 15

Competitive Pricing 16

The Verticals 17

Appliances 18

AutomotiveProducts 18

Clothing 19

Electronics 19

Entertainment 20

Furniture 21

Groceries&ConsumerProducts 21

HomeImprovement&Hardware 22

OfficeSupplies 22

PetProducts 23

SportingGoods 23

SubscriptionServices 24

Toys 24

CONTENTS BES | WHERE ITS AT | 1

TABLE OF CONTENTS

INTRODUCTION BES | WHERE ITS AT | 3

CONNECTING AT THE CROSSROADS

Your customers are always on the move. They are looking for quicker, easier and more targeted deals that respond to their shopping styles. Theyre harnessing connected technologies to simplify and optimize their shopping paths. With all this activity, how can you make sure your path crosses theirs?

By charting where your customers are now and where theyre going the ways they pre-shop discover and filter, the devices they use and their influence along the multiple paths to purchase, and the many ways those paths can be disrupted youll uncover dynamic messaging streams, product offerings and promotional offers. Youll get closer to your customers by making their shopping easier, on their own terms.

Thats why we commissioned this national study of 2,608 respondents to uncover their engagement and shopping behaviors across 13 leading retail categories. Through all of these variables, we have insights for mapping clear paths to effectively go to market.

Gone are the days when your main worry was keeping up with your competitors. Today, as this study clearly shows, the key to winning at retail is keeping up with your customers. By anticipating where theyll land as they explore new shopping territories, you can position your business directly in front of your underserved customers and ahead of your competition.

Through this research and other insights generated by working with you, were able to build a grounded understanding of the market. From there, we can deliver the right strategies and incentives that grow topline and baseline sales, while improving your margins and long-term fiscal health.

If youre a retailer and want to be more effective in the market, partnering with us will bring you deeper, more specific insights from our studies. We also conduct custom research to help you identify your unique challenges and opportunities. By comparing them to the national benchmark data provided in this study, we can help you identify key strategies for growing your business.

Please reach out with your questions and comments, and let us know if youd like to receive more information about our services.

Now, lets go find your customers.

Good shopping,

Rodney Mason GVP, Marketing Blackhawk Engagement Solutions [email protected]

2 | WHERE ITS AT | BES INTRODUCTION

Blackhawk Engagement Solutions conducted this national study in April 2015 to identify how and where consumers are using connected technologies to discover, filter and shop. The results reflect the responses of 2,608 adults, representing the general US population.

ETHNICITY

1% American Indian or Alaskan Native

5% Asian or Pacific Islander

11%Black or African American

18%Hispanic or Latino

65%White or Caucasian

HOUSEHOLD INCOME

19%

DONTTELLANYONE,BUTASUBSTANTIALAMOUNTOFSHOPPINGTAKESPLACEATWORK.

HOWDOYOULEARNABOUTPRODUCTS,SPECIALSALESANDSHOPPINGNEWS?

47% TV

36% Friends and family/Retail websites/Social media (tie)

31% Amazon

27% Google

26% Ads on the web

13% Radio

6% Other

The smartphone is the most prevalent internet-connected device, with the laptop not far behind. That means youre never further away from your customers than they are from their devices, at home or at work.

SHOPPING ANYWHERE AND EVERYWHERE

Despite major reductions in fuel costs, often a prominent line item in household expenditures, there is still significant sensitivity to price and spending. Its a safe assumption that if fuel prices were higher, the majority of customers would be hypersensitive to price and spending. Right now, theyre just cautious.

19% sometimes

WHATHASTHEGREATESTEFFECTONYOURPURCHASINGBEHAVIOR?

PRICE SENSITIVITY SHOPPING POWER

711 a.m. 9 p.m.2 a.m.11 a.m.4 p.m. 49 p.m.

14%

48%

28%

10%

CONNECTED SHOPPING BES | WHERE ITS AT | 76 | WHERE ITS AT | BES STATE OF MIND

SHOPPING ANYWHERE AND EVERYWHERE

PROCEEDING WITH CAUTION, NOT CONFIDENCE

71% Smartphone

66% Laptop

50% Desktop computer

43% Tablet

WHICHDEVICESDOYOUOWNANDUSEDAILY?

Eveninghoursarethepeakonlineshoppingperiod,butworkhoursstillaccountforasizeableportion.

62%regularlyseek

outandsignupfordigitally

deliveredspecial

promotions.

ShopathomewhilewatchingTV.58%admit to shopping at work.37%

18% often(27% often, 31% sometimes)

TVWATCHINGANDINTERNETSHOPPINGARECLOSELYCONNECTED.

1 PRICE

$

2 QUALITY 3 BRAND 4 STORE 5 AVAILABILITY

47%More

sensitive to price

than last year

57%Shopping

power has not

improved since last

year

29%Shopping power has decreased vs. last year

49%Same sensitivity to price as last year

34%have mobile wallet apps.

20%would stop carrying a

traditional wallet entirely if mobile payments

and IDs were accepted everywhere.

54%of shoppers would likely

use a mobile wallet over a traditional wallet

if it were accepted everywhere.

Mobile has changed how customers compare prices and shop online and in-store. For example, Google recently instituted a new ranking algorithm that demotes websites that arent mobile friendly. Already the most prominent connected device, the smartphone is on its way to becoming the primary tool for shopping.

A telling sign of the times: The traditional wallet is diminishing in use as customers rely more on plastic, recurring and mobile payments.

SMARTPHONES: THE GPS FOR SHOPPING

WALLETS MAKE WAY FOR MOBILE

63%would consider

receiving offers on their smartphones based on where

they are in-store.

59%would consider allowing

retailers to know where they are in-store in exchange for exclusive values and savings.

40%use smartphone cameras

to demo, share and compare products they

find in-store.

2OUTOF5CARRYLESSTHAN$20INATRADITIONALWALLET.

39%

As noted, shoppers are cautious, and price is the leading factor in purchase decisions. Customers are buying competitor products on their smartphones while standing in your store. With these as givens, its imperative that you have sound price-match strategies.

Our extensive research has found that $5 in savings on a $50 product can tip the scales in favor of an online competitor. The majority of consumers will buy at a physical store that matches online prices with price-match rebates.

Retailers can be competitive in the market while preserving margins through post-purchase incentives that offer the right rewards and drive more transactions.

Surprisingly, retailers that issue their own gift cards for price matching have lower take rates, because consumers dont value those offers as much as cash. Using a validated post-purchase redemption process offers additional economic benefits.

Despite the ready adoption of online purchases and growing payment app use, shoppers still strongly prefer plastic rewards over eCodes.

If offered a post-purchase

incentive, which reward would

you prefer?

67%$25 prepaid debit

card accepted almost everywhere

10 | WHERE ITS AT | BES MOBILE PRICE MATCH MOBILE PRICE MATCH BES | WHERE ITS AT | 11

Responses may not total 100% due to rounding.

2outof3peoplewouldchooseaprepaidcard,evenifthegiftcardofferedanadditional$5.66% $25 prepaid debit card accepted almost everywhere34% $30 gift card for store where you made purchase

ALTHOUGHPLASTICREWARDSSTILLDOMINATE,VIRTUALREWARDSSHOWGREATERACCEPTANCEATLOWERDENOMINATIONS.

PERCENTAGETHATWOULDACCEPTANECODEIFITWERETHEONLYOPTION:

80% $25 eCode for $100 purchase

71% $50 for $200 purchase

65% $100 for $400 purchase

62% $300 for $1,200 purchase

PEOPLE PREFER PLASTIC PREPAID

26%$25 Amazon

gift card

6%Gift card for store where you made

purchase

2%$25 Google Play

or iTunes gift card

Forthefollowingrewards,wouldyoupreferaplasticprepaidcardoradigitalprepaideCode?

REWARD PLASTIC DIGITAL

$25 67% 33%

$50 69% 31%

$100 74% 26%

$300 74% 26%

With social media saturating the world, its surprising how underutilized it is for real-time price promotions, especially because its the main reason consumers follow brands online.

CONSUMERS ARE FOLLOWING THE SOCIAL MEDIA PATH

Buy Online, Pickup In Store (BOPIS) has perks for both retailers and shoppers. It reduces shipping costs and gets customers in-store where they can purchase more. Plus, it provides faster access to merchandise for greater customer convenience.

FASTER THAN FAST

Amazon is also testing same-day and one-hour delivery in select markets for its Prime customers.

12 | WHERE ITS AT | BES BOPIS SOCIAL MEDIA BES | WHERE ITS AT | 13

86%would consider buying online and picking up in store to save $10 on a $50 item.

78%would consider buying online and picking up in store to receive an item 3

days earlier.

45%have purchased online

and picked up in store in the last 6 months.

WHYDOYOUFOLLOWBRANDSONSOCIALMEDIA?

53% Values and savings

28% News and trends

17% Promotions and sweepstakes

2% Other

66%would consider

using Amazon Dash.

32%would pay $8 to have an item delivered to their home the same day they purchased it.

of those who follow brands regularly use social media special promotions.68%

15% Daily

20% Weekly

33% Monthly

32% A few times a year

89% of those who follow brands on social media want special offers from those brands.

42% have used special promotions they find on social media.

40% follow brands on social media.

24

$10 3 DAYSEARLIER

AMAZONDASHISANEWSERVICETHATLETSSHOPPERSPURCHASEGROCERYANDCLEANINGPRODUCTSWITHTHEPUSHOFABUTTONLOCATEDWHERETHEPRODUCTSARESTOREDATHOME.

EMAILSTILLDOMINATESINDIGITALPROMOTIONDELIVERY,BUTSOCIALISGAININGTRACTION.

Despite industry investment and broad shopper use, loyalty programs are simply not perceived as providing much value or savings. Grocery stores are the only retail vertical where loyalty rewards are equally dispersed. Outside of grocery, only the very best customers typically receive significant value.

For this reason, only a small percentage of consumers value loyalty programs as a differentiator.

MAPPING THE LIMITS OF LOYALTY

WHILEIN-STORE,HAVEYOUEVEREXPERIENCEDAPROBLEMTRYINGTOREDEEMANOFFERRECEIVEDONYOURSMARTPHONE?IFSO,HOWWASTHEOFFERDELIVERED?

WHICHDEVICEDOYOUUSEMOSTOFTENTORECEIVEANDREDEEMEMAILANDSOCIALPROMOTIONS?

80%

80% Email

8% Other

7% Text

5% Phone app

14 | WHERE ITS AT | BES LOYALTY PROGRAMS DIGITAL PROMOTION DELIVERY BES | WHERE ITS AT | 15

SOCIAL GAINING ON EMAIL

WHICHTYPESOFPROMOTIONALOFFERSDOYOUUSE?

73% Email

42% Social media

37% Text

36% Shopping apps

CONNECTINGIN-STOREANDONLINEPROMOTIONSISIMPERFECT.SMARTERPOINTOFSALETECHNOLOGIESAREENTERINGTHEMARKET,BUTUNTILTHEYPROVE

THEMSELVES,DIFFICULTIESWITHMOBILEOFFERSWILLBECOMMON.

OFCUSTOMERSRECEIVELOYALTYOFFERSVIAEMAIL.

Only 15% believe loyalty programs provide the most savings.

73% belong to loyalty programs.

62% of those who belong are happy with their loyalty program.

88% of shoppers who receive email promotions use the offers.

44% often44% sometimes

70% of shoppers who receive socialmedia promotions use the offers.


37% Problem with text!35%Problem with email!27%Problem with app!

62% COMPUTER 27% PHONE 10% TABLET 1% OTHER

88% of shoppers who receive text promotions use the offers.


87% of shoppers who receive app promotions use the offers.


ALL ROADS LEAD TO SALESRebates and validated rewards offer shoppers greater value for redeeming post-purchase, give deal-seekers best in-market prices and preserve margins. Shoppers are using technology to seek out rebates, and to quickly redeem them through digital experiences.

68%said rebates are an

attractive offer in-store.

65%said rebates are an attractive offer when shopping online.

57%said they want to

redeem rebates via smartphone.

16 | WHERE ITS AT | BES COMPETITIVE PRICING VERTICALS BES | WHERE ITS AT | 17

Now, lets look at 13 retail verticals and the incentives-to-purchase price elasticity by category.

Rebates and other post-purchase validated rewards offer lower in-market prices than instant discounts, thanks to reduced redemption rates.15% Loyalty

WHEREDOSHOPPERSFINDTHEGREATESTVALUE?It may be a high-tech digital world, but nothing beats a good old-fashioned sale.

51% Sales

26% Coupons

8% Other

ELECTRONICSAUTOMOTIVE PRODUCTS

CLOTHINGAPPLIANCES

18 | WHERE ITS AT | BES VERTICALS VERTICALS BES | WHERE ITS AT | 19

Top 3 sources for comparing prices

62% Retail websites

52% In-store displays

39% Google

37% Amazon

33% Print ads

27% TV/Radio (tie)

27% Value shopper sites (tie)

10% Social media

9% Mobile apps

6% Billboards

Youre buying a washer and dryer for $800. Which reward would you prefer?

58% $150 REBATE42% $100instantdiscount


64% Retail websites


41% Amazon

36% Google

30% Print ads

25% Value shopper sites

22% TV/Radio

14% Social media

11% Mobile apps

4% Billboards

Youre buying $200 worth of clothes. Which reward would you prefer?



59% Retail websites


43% Google

41% Amazon

29% Print ads

28% TV/Radio


14% Social media

10% Mobile apps

5% Billboards

Youre buying 4 tires for $500. Which reward would you prefer?



61% Retail websites


46% Amazon

40% Google

29% Print ads


25% TV/Radio

11% Social media

8% Mobile apps

5% Billboards

Youre buying a $600 smart TV. Which reward would you prefer?


48% USE THEIR SMARTPHONES TO COMPARE PRICES.





GROCERIES & CONSUMER PRODUCTS

FURNITUREENTERTAINMENT


53% Amazon

51% Retail websites

43% Google (tie)

43% In-store displays (tie)

28% TV/Radio

26% Print ads


15% Social media

13% Mobile apps

7% Billboards

Youre buying a $30 DVD/Blu-ray/download. Which reward would you prefer?


Youre buying a $100 iTunes or Google Play gift card. Which reward would you prefer?



61% Retail websites


37% Google

36% Print ads

31% Amazon


25% TV/Radio

9% Social media

8% Mobile apps

6% Billboards

Youre buying a $500 set of table and chairs. Which reward would you prefer?




54% Print ads

47% Retail websites


26% TV/Radio

25% Google

19% Amazon

15% Mobile apps

10% Social media

6% Billboards

Youre buying 10 grocery items. Which reward would you prefer?

59% $15 REBATE41% $7.50instantdiscount

Youre buying a $55 video game. Which reward would you prefer?

65% $15 REBATE35% $7.50instantdiscount





OFFICE SUPPLIES SPORTING GOODS

PET PRODUCTSHOME IMPROVEMENT & HARDWARE


58% Retail websites


40% Amazon

37% Google

36% Print ads


25% TV/Radio

10% Mobile apps

9% Social media

7% Billboards

Youre buying $100 worth of home improvement items. Which reward would you prefer?


Youre buying $60 worth of tools. Which reward would you prefer?

64% $15 rebate36% $8instantdiscount


57% Retail websites


44% Amazon

37% Print ads

33% Google


23% TV/Radio

10% Mobile apps (tie)

10% Social media (tie)

7% Billboards

Youre buying $50 worth of office supplies. Which reward would you prefer?




55% Retail websites (tie)

44% Amazon

35% Google

34% Print ads

25% TV/Radio


12% Social media

9% Mobile apps

7% Billboards

Youre buying $90 worth of sporting goods. Which reward would you prefer?




53% Retail websites

38% Print ads

36% Amazon

33% Google

27% TV/Radio


11% Mobile apps

10% Social media

7% Billboards

Youre buying $40 worth of pet products. Which reward would you prefer?






SUBSCRIPTION SERVICES

TOYS

24 | WHERE ITS AT | BES VERTICALS


52% Retail websites

45% Google

39% Print ads

34% Amazon

31% TV/Radio



19% Social media

13% Mobile apps

8% Billboards

Youre buying a one-year home subscription service (e.g., security alarm, lawn care, pest control, etc.). Which reward would you prefer?

62% $110 REBATE38% $80billcredit


53% Retail websites

51% Amazon (tie)


37% Google

32% Print ads

25% TV/Radio


11% Social media (tie)

11% Mobile apps (tie)

7% Billboards

Youre buying $40 worth of toys. Which reward would you prefer?




Blackhawk Engagement Solutions is a leading global provider of customized incentive and engagement solutions for consumer promotions, employee rewards and recognition, and indirect sales channel management programs. Blackhawk Engagement Solutions is a strategic partner with many of the worlds leading brands and a thought leader that provides game-changing engagement solutions. Through innovative products, services and technology, Blackhawk Engagement Solutions inspires actions that impact results.

Blackhawk Engagement Solutions, headquartered in Lewisville, Texas, is a division of Blackhawk Network.

bhengagement.com

Rodney Mason GVP, Marketing [email protected] 972.538.7336

2015 Blackhawk Engagement Solutions, Inc. All rights reserved.

MEASURE WHAT

MATTERS MOST

A marketers guide to improving outcomes by focusing on your best customers and

the critical moments in their journey

t 2thinkwithgoogle.com

IntroductionIts no secret that it takes many marketing touchpoints to connect with a customer, find

a quality lead or make a sale. But how do you know the right message to deliver at each

point in that journey? How do you ensure that your investments are working and that

youre not wasting money and resourcesor worse, alienating your customers?

Todays customer journey includes many touchpoints each one is an opportunity

Better measurement is the answer. Its the key to understanding and making the most of these interconnected touchpoints, but its not always top of mind when building

marketing campaigns. Lay your measurement foundation firstbefore you dive into the creative workand you can achieve more with marketing. In this brief guide well look at four crucial tenets of measurement-focused marketing:

choosing the right metrics, focusing on your best customers, valuing the whole journey

and proving impact. Collectively, these points show how better measurement can

improve campaign effectiveness, help you get the credit you deserve for your programs

and, most importantly, ensure a better return on investment for all of your marketing.

Align metrics with real business objectives

Put customers before transactions

Improve performance by giving credit where its due

Show the incremental effect of your investments

Focus on the Right Metrics

1 32 4Value Your Best Customers

Attribute Value Across the Journey

Prove Marketing Impact


Focus on the right metrics

The best marketers set themselves up for success by identifying clear metrics they

want to effect before launching a campaign. Yet how do you define the right metrics?

Many marketers focus first on high-level campaign objectives such as creating brand

awareness, generating leads or driving in-store sales. But when it comes to evaluating the

success of their campaigns, they resort to measuring lower-tier, proxy key performance

indicators (KPIs). Lets look at the KPIs for a hypothetical auto manufacturer:

For each of these marketing objectives, familiar metrics exist. Yet many of these

familiar metrics were designed at a time when it was hard, if not impossible, to measure all touchpoints. Today, with advances in analytics, its possible to better align your metrics with your core business goals. If your companys biggest goal is to increase profits, then your marketing metrics should show how your

campaign contributed to profits.

For example, if your marketing goal is to generate online leads, it may seem natural to focus on lowering the previous quarters cost per acquisition (CPA). But what if by lowering your CPA, you also lower the quality or volume of leads and thereby

1

Some Typical KPIs and How Theyre Measured

Marketing Objective

Marketing Channels

KPIs (Key Performance Indicators)

Measurement Tools

Create brand awareness

TV Video Social Display/Rich media

GRPs Brand lift Video/Rich media engagement

TV viewership Consumer panels Web analytics Brand surveys

Generate online leads

Paid and organic search Display Online referrals Website content

Number of leads CPA ROAS

Conversion tracking Web analytics CRM

Drive customers to store

Mobile web and apps Email Print Radio

In-store visits Number of purchases Purchase value

Mobile app analytics CRM Transaction data


reduce revenues and add other costs? Perhaps in this case you should create a new

metric: Cost per high-quality acquisition.

Another common pitfall is using metrics without context. Suppose your colleague has

just launched a new video, and she sends around a proud email touting 20,000 views.

How do you know whether 20,000 is a good number of views? One way to answer this

question is by looking at benchmarks for similar videos launched by your company or

other comparable companies. You can also look back at the creative brief. If you launched

the video to create awareness among new potential customers, but the majority of

these views came from your existing customers, then the video missed the mark. Your

colleagues metrics should reveal information about how many new customers view (and engage with) the video rather than the number of views alone.

Well-designed metrics often cross departments within an organization. Over time, one customer may see and be influenced by many different marketing programs from the same company. So if your #1 overall objective is profit, then your return on

investment should be measured based on the sum of all marketing inputs, not just the direct-response campaign a customer saw right before making a purchase.

Breaking down organizational silos can be a painful and highly political process, but its

worth the trouble for organizations that stick with it. Peoples salaries and bonuses may

be tied to legacy metrics, so if you want to switch to new (more strategic!) KPIs, you may

need to also consider new incentive structures for your sales and marketing teams.

Its vital to find a champion, ideally a senior-level manager, who can help make teams

Online Leads

Entire Customer Journey

Increase in Profits

Brand Awareness

In-Store Sales

Break down team silos to reflect the true customer journey


jointly accountable. Simple strategies include making sure that different marketing groups

sit near each other at work, or creating monthly cross-team meetings to share goals and

metrics. Some companies also create internal good for the business reporting tools

that dont impact the official financials but allow separate teams to view shared marketing

impact. Even better, restructure the organization so that your brand team, your digital

team and your store team all report to the same personoften the CMO. That person

should be responsible for providing a unified view of marketing achievements, tying these

back to the broader business goals.

And keep in mind that excellent KPIs are useful only if you have reliable data to keep track

of your results. Make sure you have the right analytics and measurement tools for both online and offline channels, to collect clean and accurate data that will let your entire

team glean insights about your performance. Strive to bring your data and reporting

together to deliver one single source of truth for your entire organizationthe more

youre able to share data and metrics, the better youll be able to respond to the needs of todays customer.

Key performance indicators (KPIs) that measure the success of a single touchpoint fail to inform eBusiness executives of the impact of consumer engagement across multiple touchpoints. Additionally, department, team and individual goals aligned to a single touchpoint ultimately fail to drive cross-touchpoint thinking and behavior in employees. This siloed approach hinders the shift to a digital business.Martin Gill, VP, principal analyst in Forrester report1

Have I selected relevant metrics and benchmarks to measure marketing success?

Do my marketing metrics align with business goals such as revenues and profits?

How can we break down silos and make teams jointly accountable?

Do I have the right measurement tools on hand?

ESSENTIAL QUESTIONS FOCUS ON THE RIGHT METRICS

1 Forrester Research, Inc., Define New Metrics For Digital Business Success, March 26, 2014.


Value your best customers

While you consider what to measure, youll also want to think about who you should be measuring.

Its understandable to want to increase store and website visits with coupons or

promotions, but what if those customers end up costing you more money than they

bring in and then never return? When the incentives are geared solely around short-

term sales and CPA, its tempting to buy cheap placements and keywords for ads and

promotions. However, doing so can lead to short-lived customers and success.

The shift from conversion to customer-centric marketing means a change in thinking. And it begins with getting to know the customer.

Neil Hoyne, When It Comes to Attribution, Customers Count Read the article >>

Instead of measuring transactions alone, model the lifetime value (LTV) you derive from

your customers. For example, you may discover that 20% of your customers are driving

80% of your profits. By focusing on getting to know those best customers (the whales)as well as how you acquired them and how you can find and retain more

like themyou can cut costs and increase revenues.

Quick Tips for Customer-Centric Measurement

Really know your customers

Distinguish the whales from the wasted energy

Find and retain more whales

Deepen your understanding of your customer base:

Who are they?

Where did they come from?

How long do they stay with you?

How much have they spent over time?

How much have they cost?

Centralize your analytics to attain this holistic view of customers.

Use your CRM system and website analytics to segment your customer base.

Look for segments of customers who completed high-value purchase.

Identify segments of customers who purchased repeatedly (look for multiple and high-value sales).

Find segments that perform desired behaviors on your website.

Determine which segments are not performing well.

Identify which (combination of) marketing channels and keywords helped you acquire your best customers; then double down on those.

Use marketing tools to find more potential customers who closely resemble your best existing customers.

Use technologies like personalization and remarketing to strengthen relationships and drive long-term value.

Reduce waste by decreasing marketing spend on customer segments that are not performing well.

Read more tips on developing strong customer relationships through tailored experiences in the Secrets of the Math Minds >>

2


AccuWeather is using better customer data so we can start to market on an individual basis rather than focusing on a traditional market segment like we do now. Its really exciting to build experiencesreally personalized weather solutionsfor our users rather than for general segments of users.Steve Mummey, director browser products, AccuWeather.com

As you get to know your customers better, remember that the customer journey is continually evolving. People are spending more time online, especially on mobile, but advertising spend hasnt kept up. Now consider that the 25-year-old consumers of tomorrow are the 15-year-olds of today, and more than 75% of todays teens already

shop online.2 (And you know how much those teens use mobile.) Channel use is changing fast, and measurement is the best way to see where your customers are headed.

ESSENTIAL QUESTIONS

How much do I really know about my customers? Have I defined customer clearly?

How do I acquire more customers who resemble my best existing customers?

Do my advertising investments align with my strategy to reach and win the whales?

VALUE YOUR BEST CUSTOMERS

2 June 2014 BI Intelligence e-commerce demographics report / Piper Jaffray Spring 2014 Taking Stock With Teens.


Attribute value across the journey

How do you know whats working in your marketing and whats not? Start by identifying

the role of each touchpoint along the customers journey. (If youre not sure how different

channels influence the purchase decision, our Customer Journey to Online Purchase tool can show you industry benchmarks.)

Once you have a handle on what the customer journey looks like, marketing attribution

can help you to optimize your digital campaigns. Marketing attribution, broadly speaking,

means dividing up the value of an online sale (or conversion) and distributing fractions of that value across the different touchpoints that led to the sale, from a display ad seen

last month to a search ad clicked this morning.

To get the most out of attribution, be sure to pair it with flexible marketing tools (and

incorporate offline channels via marketing mix modeling). That way, you can adjust your

investments and messaging to better connect with your customers.

Distribute credit to multiple touchpoints along the path to purchase

Dont forget that you also need to appropriately value each touchpoint within a single

channel. For example, if youre using online display ads, interest-based targeting is more

of an upper-funnel activity than remarketing; and for paid search ads, generic keywords

help you engage with more new customers than do brand keywords (which tend to

convert more existing customers).

3

Email Organic Search

Display Social

? ? ? ? $100


Attribution can be done with spreadsheets, rules-based modeling software or even

sophisticated data-driven algorithms. Whatever attribution method you choose for your

business, make sure you continue to adapt and measure results so you can see what

really works for your business. Thats the way to get the most out of your measurements

and your marketing.

Get to know the conversion path for your business. Ask yourself the following

questions:

Whats the time frame for a typical conversion? Hours? Days? Weeks?

Which channels influence your customers? Are you measuring them all?

Do you understand the role that each channel plays in moving your customers to make purchase decisions?

Qualify the seriousness of your attribution problem: Start by contrasting your

standard model (often a last-click model) with other models (such as data-driven

attribution). Note the deviation. If there is little deviation, the problem is probably not serious. If theres a lot of deviation, you may have a larger attribution challenge (and opportunity).

Dont let organizational silos stand in your way: Make sure your attribution work

spans all of the marketing channels your customers are likely to encounter.

Consider offline channels and pathways and their interactions with your online

media. Dont think of attribution as digital only.

Take advantage of cross-channel efficiencies. For example, use display creatives to drive customers to low-cost keywords.

Cross-device attribution can be a technological challenge, but dont let that stop

you. Use a mobile multiplier or other estimation techniques to account for the

role that mobile plays. (You can use our Full Value of Mobile Calculator for this.)

Find more tips in the Definitive Guide to Data-Driven Attribution >>

Six Tips for Better Attribution


Keep in mind that attribution by its very nature is backward-looking. If you havent

historically used a certain channel (say, a new social network), then attribution cant tell

you how well that channel is going to work in your new campaign. It can, however, provide

directional guidance (by examining the past performance of other social networks youve

used, for example). And it can help you optimize as you go. At its best, attribution helps

you to understand how different marketing channels are influencing your customers so

that you can adapt not just your investments but also your messaging strategy.

Attribution modeling changes everything. Were spending our money more efficiently than we were before. We know what were getting for it.Joe Meier, vice president business development, Baby Supermall

ESSENTIAL QUESTIONS

Am I measuring and valuing all of my customer touchpoints, both within channels and across channels?

What does the full customer journey to conversion look like for my business?

Am I applying attribution results to improve my investment decisions as well as my customer messaging?

ATTRIBUTE VALUE ACROSS CHANNELS


CarPhone Warehouse uses geo-experimentation to prove how mobile influences in-store sales. See how >>

Prove marketing impact

The right metrics, the best customers, the full purchase journeyeach of these is crucial

to smart measurement. Yet perhaps more important than any of these is proving marketing impact. What you really want to understand is what happened only because of a given marketing spend change (and would not have happened without it). Beyond

helping you invest more wisely, proof of incremental effectiveness can also help change

perceptions among senior executives, taking marketing from a cost center to a revenue driver.

To show incremental impact, youll need to switch from correlative measurement to

causal measurement. Correlation can be useful, but it wont convince your CFO that the

marketing department is fattening the bottom line. Take Joe, a hypothetical SEM manager.

After applying attribution tools, Joe sees that his remarketing campaign is a key driver of

conversions. But is it really remarketing at work, or is Joe simply showing ads to a subset

of customers who would have converted anyway?

To show causation, you have to experiment. Well-designed experiments are controlled

and statistically robust, with a clear test group that sees the content youre investigating

and a control group that doesnt. One way of achieving this is through randomized

geographic testing: for instance, turning display ads on in some regions and off in others.

(See Measuring Ad Effectiveness Using Geo Experiments for more details.)

A big advantage of this type of experimentation is that it can evaluate marketing impact

across all devices. It also can solve one of the attribution challenges we described above:

estimating the potential performance of a new and untried marketing channel.

4


Geographic testing, of course, isnt the only available experimentation tool. Experimentation

can also be used to optimize ad campaigns or website content. Whatever type of testing

youre doing, it should be ongoing and iterative. Test one thing at a time, based on a very

specific question and hypothesis, and add the findings into your strategy. Then move on to the next test.

To get a feel for the types of hypotheses you should be testing, keep up to date on industry trends and consumer studies, such as new holiday shopping behavior, the impact of digital on in-store sales or how brand marketing is changing thanks to mobile video and search ads. Use what you learn to validate your own investment plans.

Positive Testing Cycle

Observe current behavior and

metrics

Test different programs

Implement change

repeat!


Using controlled incrementality measurement provides a competitive edge for HomeAway. Not only do we know what works and what doesnt, but we can also apply the measurement knowledge over and over, comfortably extending our business footprint using more and more channels.Will Lin, vice president global online marketing, HomeAway

Am I relying on correlations, or can I base my decisions on measured causal impact?

Do I know the incremental value of each of my media investments?

How can I incorporate experimentation to prove the value of my marketing, including new channels?

ESSENTIAL QUESTIONS PROVE MARKETING IMPACT


Dont wait until after youve run your campaign to think about measurement. Establish your

measurement-focused marketing strategy before you spend that first dollar. Heres a recap of how to do it:

Focus on your true business objectives Make sure your KPIs are in line with the real problems that youre trying to solve. Dont let

organizational silos stop you from measuring what matters most.

Measure customers, not just transactions Measure long-term customer value instead of pure revenue, and look at which channels

bring you your best customers. Youll develop stronger, more profitable relationships and

avoid wasting money and effort on customers who cost more than theyre worth.

Attribute value across the whole customer journey Understand what your customer journey looks like, and think holistically about your

marketing. Attribute credit to various marketing touchpoints to uncover insights and

opportunities that will help you invest more wisely.

Prove the incremental impact of your marketing spend Identify vital channels and new opportunitiesthen experiment to prove the value

of your efforts (and stop whats not working). Make experimentation a regular part of

marketing cycles: keep testing and keep improving.

Checklist: Measure what matters most

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Marketing Boot Camp: Path to Purchase

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