This is a great report from Mckinsey & Company on Analytics and competing in a data driven world. At the moment, location based data is realizing 50-60% of it’s value driven primarily by smart phone usage and applications while the following industries are all realizing less than 40%:
% Value Realized From Data & Analytics
- Location Based Data ~ 50-60%
- US Retail ~ 30-40%
- Manufacturing ~ 20-30%
- Public ~ 10-20%
With the exception of Location Based Data, many organizations across various industries have an uphill battle integrating and developing data driven cultures. (click link below to read full article).
Here are the Top 3 Reasons why companies aren’t yet realizing value from data and analytics:
- Lack Of Analytical Talent
- Siloed organizational structures
- Plain Skepticism of the real value
Regarding the issue of analytical talent, I believe it’s available and sometimes even already exists in many companies but they are simply unsure of how to identify the key characteristics and/or channel it’s use. One thing I know for sure is that Google, Amazon and Facebook dominate their industries because of data and analytics and have access to the same talent pool as many other organizations.
Companies that are siloed will always have difficulty successfully implementing programs that require participation from multiple groups within the organization and stand permanently challenged at being successful as the competitive landscape changes and data becomes more widely utilized. And that I can say about skepticism is…..no risk, no reward!
Finally, here are 2 keys to success as identified by Mckinsey & Company:
a) Incorporate data & analytics into the company’s strategic vision
b) Develop business processes around infrastructure and talent
The above are simple, but powerful mechanisms to changing corporate culture around data and anlaytics. Once incorporated, companies can begin to seriously unlock the value of their data and perhaps create new channels and raise the competitive landscape.
I’m a freelancer and sometimes utilize the UPWORK platform for contract jobs. I recently experienced a scammer on the platform working to get my personal information to most likely steal my identity.
The perpetrator responded to my proposal and requested I communicate to his Gmail account. We connected on Google Hangouts and started a text conversation which was supposed to be a 15-20 interview. In the midst of job performance and character questions came a question about my bank name and subsequently a request for my full name, address, dob, email and phone number. This quickly raised my suspicions about his intentions and I ended the session and blocked his account.
Be extremely careful when dealing with people of the internet, even if they are offering a job. And more importantly, know what questions cannot be asked during an interview.
Here are 4 tips for avoiding scammers on the platform:
1. Communication – don’t respond or communicate outside of the platform. There’s video, chat and messaging built-in to the platform.
2. Personal Information – guard it with your life….no one needs your DOB, Email, Phone, Address and Bank Account to make payment. It’s as simple as using Paypal which requires on an Email.
3. Verify – confirm that Upwork has verified the employer and that they’ve done business before.
4. Report Them – be sure to alert the administrators if you feel someone is trying to scam or engage in fraudulent activity.
Internet scammers are extremely savvy and constantly look for ways to exploit innocent people. They explore victims on everything from Social, Emails and Dating sites to Freelance applications. Once they have gained your trust, they will ask you for money, gifts or your banking/credit card details. Always consider the possibility that the approach may be a scam, particularly if the warning signs listed above appear.
Last year retailer Canada Goose decided to take business online in addition to it’s current wholesale and brick and mortar strategy. This is good news for them and probably not a moment too soon!
In the article (click here) the message is that they hope to close a 15-point margin gap between its rivals by selling online. This is all well and good, but here are some other points to consider:
> Shipping Costs – customers will be willing to pay a limited amount for shipping. This is one of the reasons Amazon’s model is so effective….low cost delivery! They’ll need to run plenty of testing in this area to see what works.
> Return Policy – do research in this area to understand the impact of potential returns on the business. Implement a good policy and watch closely as it could weigh on margin and feed negative publicity on social sites.
> Social Sharing – evaluate how this can be incorporated into the new website, if possible, so that existing customers “word of mouth” can help do the selling. In this process, and with the right tools, they could also find brand ambassadors to push the message in new markets.
> Analytics – some investment must go to both E-commerce and Consumer analytics so they can quickly see how the online customer differs from Wholesale and Brick and Mortar customers. There will without a doubt be distinctions in the products customers chose and their shopping habits, not to mention that there could be big demographic swings. Analytics will get them on top of these issues so adjustments can be made quickly.
> Automation – there’s usually not much marketing automation required in a brick and mortar or wholesale business. But for E-commerce, it can make a significant difference in conversion as they evaluate the sales funnel.
This an exciting time for Canada Goose as they bring their business forward and onto the digital landscape. Making sure that shipping and returns, analytics and automation and social are all given the proper review and investment will be the key to their success.
Top 5 Data Hygiene Issues
CRM Systems are becoming increasingly more important in today’s information and digital age. Companies rely on them to help provide the Who, What, When and Where of sales, marketing and communication. But without good and clean data, it would be challenging to for Marketers to find their answers and effectively drive engagement.
In my experience, roughly 15-20% of CRM Database records go bad each year. And here are the Top 5 reasons:
1) Movers – people have physically changed address and have not provided forwarding information.
2) Deceased – some will have lost their lives over the year.
3) New Accounts – some will have created new accounts with updated information.
4) Data Entry Errors – sales people, data entry clerks and even the customer can enter bad info.
5) Missing Data – some records will be partially entered at POS (Point-Of-Sale) for many reasons.
CRM users use the term “course data” to describe information that is broken and inaccurate. And we use the term “data scrubbing” as the process for evaluating data for inaccuracies and subsequently cleaning it. Companies that fail to identify course data and scrub it will find their marketing costs rising and campaign effectiveness dwindling.
A large mail house, CRM Vendor or your Technical team can help with data hygiene. And, it may actually require some input from all 3 in order to get the job done properly. As well, I wouldn’t be surprised if some Big Data companies also provide data scrubbing services (see data cleansing cycle below).
No matter who does the job, it’s important to be sure the cleansed data flows into connected systems such as Email, Ecommerce, SMS and the like…..where ever there are marketing touch-points. Failure to make this connection will cause the issues to be further perpetuated. I should also note that any address information should be standardized in the “cleansing” process so that it’s consistent with the USPS and ensure delivery.
Having bad data in your CRM and related systems can cause the following issues:
a) Undelivered Mail – each bad address in your mail file will cost you postage, printing and paper.
b) Reduced Engagement – missing name, suffix and or salutation information will reduce your ability to personalize marketing messages and thus grab the customer’s attention.
c) Erroneous Segmentation & Targeting – partial records can impact customer segmentation, especially if it causes multiple records to be created for a single customer. Sales can be scattered across multiple accounts.
All of the above issues will substantially impact customer engagement, conversion and campaign ROI. This can be a perpetual campaign if scrubbing systems aren’t setup and maintained on a regular basis.
Oftentimes company divisions are misaligned on Marketing Metrics which could put many of the customer driving programs in jeopardy. In fact, it is quite common for the Sales and Marketing departments to have very different ideas about performance metrics than the Finance department.
Marketing’s typical and key metrics are usually as follows:
- ROAS – meaning return on Advertising Spend and calculated as Sales/Advertising Spend
- Impressions – number of people exposed to advertising media
- Click Thru Rate (CTR) – percentage of media viewers who clicked on media or Clicks/Ad Sends
- Conversion Rate (CVR) – percentage of media recipients who placed an order or Orders/Clicks
- Lift – meaning sales or conversion rate above the standard or control group
- Cost Per Impression (CPI) – media cost per impression or ad displayed
- Cost Per (M) Impression (CPM) – media cost per one thousand impressions or ads displayed
- Cost Per Acquisition (CPA) – media costs per customer acquired
- Cost Per Click (CPC) – media costs paid for each click on the advertisement
What becomes clear and predominate in Marketing Metrics is a measure of Cost. Most often Marketers are beholden to a limited budget on which to drive traffic and sales. And the key to managing the budget is to be sure spend is generally customary and reasonable to acquire each new customer or order.
On the other hand, Finance and Accounting departments are primarily concerned with Sales growth and Return on Investment (ROI) as they are charged with being the custodian for all money spent in the company to earn sales.
Finance – Higher Returns VS Marketing – Low Acquisition Cost
This difference in objective I call “The Great Divide” as it can polarize the company where these departments are concerned. With all marketing metrics being considered, if Finance cannot translate sales driven by marketing spend to ROI, it may jeopardize any further spend on those activities and oftentimes can lead to cutbacks.
So what does it take to bridge the “The Great Divide”? Incrementality! Amongst other measures, Marketers must endeavor to calculate the incremental components of their efforts. Whether it be sales, conversion, orders or customers it must be understood how $1 of marketing spend delivers on any other unit of measure which is the basis for ROI analysis. This would help develop a much cleaner path to understanding for Finance and help support Marketing’s position on spend and budgets.
The new wave of CRM Tools live in the cloud with applications such as Salesforce.com, SugarCRM, SAP, Microsoft Dynamics and Oracle CRM.
And as a matter of fact, in 2015 Gartner ranked the Top 5 CRM companies by spend with Salesforce.com topping the list:
But with the complexities of integration, adoption and skilled resources, many CRM applications
can go only partially utilized which may cause investment and usage to drop. Furthermore, the core strength of a CRM application is, and should be, customer data management which may leave some desire for things like reporting and analysis.
With that said, I’ve used a few CRM applications and reviewed many over many years of working in Marketing and in all cases there was a need to utilize other tools to put the finishing touches on reporting and analysis. For instance, some of the older applications lacked in Dashboarding whereby all key customer and business metrics are summarized on one page.
For those of you who can understand some of the challenges of out-of-the-box CRM applications like dynamic reporting, dashboards, calculated metrics, matching logic or sharing, here are some practical tools I’ve used over the years to get projects across the finish line.
• Microsoft Excel – very powerful when it comes to calculating metrics, matching and pivoting data.
• Microsoft Access – a heavy duty data manipulator with the power of sql & macros for quickness.
• SPSS Statistics – my go to statistical package for various types of modeling and data analysis.
• Google Sheets – incredible resource for sharing spreadsheet data across internal/external users.
• Zoho Reports – quick and easy Dashboard builder. All you do is Table Format data and voila!
Excel and Access come with most work system configurations and IBM SPSS is relatively affordable. As well, licenses for each can easily be purchased for home based and small business use. Each respective application allows the end user to take control of the work process by having flexibility over how things get done.
In my past blog articles I’ve defined what I believe CRM entails and why companies need this department. The business landscape is changing a rapid pace these days and it’s important to understand what skills are required to be the an expert at CRM.
To be the ultimate CRM person, one has to posses many qualities and be functionally cross-trained in many of the following areas:
• Customer Service
• Marketing (Content, Digital & Social)
Customer Service
– This is a key touch-point in the customer journey.
– Understanding customer pain points or wow factors helps improve acquisition and retention efforts.
– Learn behavior and how to put the customer at the forefront of your work.
Sales
– Knowing how “Call-To-Actions” work and getting into the drivers of conversion.
– Learning customer emotions helps in crafting talk tracks improving sales.
– Gaining comfort in this area will help in driving acquisition and retention.
Marketing
– The 4’s are obvious here – Product, Place, Price and Promotion.
– Be involved in the creative process to learn how analytics and the 4 P’s come to life in messaging.
– Digital and Social can deliver tons more impressions and content than traditional Retail stores.
Analytics
– Drives decision making by systematic number crunching on sales & marketing activity.
– Reports, Pivot Tables, Charts, Dashboards & Info-Graphs build data patterns & crystallize thoughts.
– Modeling will help with driving predictive marketing and what-if scenarios.
Project Management
– Be prepared for new platforms, system integrations and business intelligence endeavors with IT.
Programming
– It helps to know SQL, R or Python when working with Big Data.
Story Telling
– A good story will bring everything to life and help less technical folks understand your work.
When well versed in the above areas you will become the “Guru” able to develop segmentation and scoring systems, programmatic marketing programs, contact strategy, optimization plans and help improve overall marketing systems & operations leading to improved return on dollars invested.
In doing some recent pro-bono consulting work for a technology company, I reviewed their CRM product. Overall, it was quite comprehensive in tracking leads, orders, customers, invoices and the like. But the one thing it was missing was Key Performance Indicators (KPIs) at the Customer and Associate level.
Aside from having a system to track leads, customers and associates plus the processes leading to acquisition, it’s extremely important to understand how the business is performing at key intervals. CRM Platforms must incorporate customer and associate based Key Performance Indicators (KPIs) to help distinguish between good and bad performing assets.
Here are some basic examples of the KPIs required:
- Lifetime Value (LTV) – 3 Year Customer Spend
- Average Dollar Sale (ADS) – Total Sales/Total Customers
- Transactions Per Customer (TPC) – Total Transactions/Total Customers
- Units Per Customer (UPC) – Total Units/Total Customers
- Units Per Transaction (UPT) – Total Units/Total Transactions
- Sales Per Associate – Total Sales/# of Sales Associates
- Average Age (customer) – Average number of years customer is on file
- Average Tenure (associate) – Average number of years associate is on file
- Cost Per Acquisition (CPA) – Total Advertising Costs/Total Acquired Customers
- Return On Advertising Spend (ROAS) – Total Sales/Total Advertising Spend
- % New Customers – Total First Transaction Customers/Total Customers For Period
- % Existing Customers – Total 2+ Transaction Customers/Total Customers For Period
- % Lapsed Customers – Total Customers on File With No Transaction/Total Customers For Period
- # Of Prospects – Total New To File Members With No Transaction
All of the above can be broken down at the category level and used to separate customers and sales associates into Good, Better and Best buckets. Metrics can also be developed based on whatever widget categories are being sold. These figures will help management understand what is driving performance and craft a strategy around business improvement.
I wanted to touch on this topic in hopes of making the CRM picture more clear to those in business and marketing who may not understand it’s power.
CRM systems and processes allow companies to cultivate relationships with it’s consumers which ultimately leads to LOYALTY. Here are some key areas to help explain where impact is made:
a) Lead Generation – allows companies to catalog people interested in it’s products or services.
b) Customer Service – having a full view of customers actions and activities helps improve service.
c) Marketing – knowing how customers want & consume information improves reach & contact.
d) Sales – combining all of the above with purchasing behavior can lead to increased overall sales.
And within each of the above key areas lies a multitude of tool-sets and processes that help to drive each. Some examples include database input and maintenance, segmentation and targeting, surveys, attribution, statistical analysis and modeling, optimization and behavioral analysis.
Focusing in on any of the above key areas and utilizing the tool sets and/or processes could easily generate a 5-10% or more lift in sales. And these sales increments can be multiplied over as you look to improve performance in each particular area.
